Recent extension of the Bush tax cuts President Barack Obama’s plan to cut payroll taxes for a year could provide big savings for many working Americans, but Washington elite believe Social Security advocates anxiety jeopardizing the retirement program’s finances.
This is part of a package of tax cuts and extended unemployment benefits that Obama caved in negotiated with GOP leaders. The payroll tax cuts would slash workers’ share of Social Security taxes starting in 2011. Americans making $50,000 in earned wages would get a $1,000 tax cut, while those making $100,000 would get a $2,000 tax cut.
This forces the government to borrow billions of dollars to make Social Security work. Social Security has been in place and working for years. Advocates and congressional members worry that borrowing money to finance Social Security could force the mandated program to compete with other federal programs for limited funds that potentially could get cut. Here we go again, more government intervention and overspending.
According to Representative Earl Pomeroy, Democrat North Dakota “Social Security taxes “ought to be held untouchable”. Pomeroy the chairman of the House Ways and Means subcommittee on Social Security also stated “when you start to signal that the (Social Security) tax levels are negotiable, you end up in long-term trouble.
President Obama’s administration state that “a payroll tax cut is an efficient way to stimulate the economy by immediately increasing take home pay for about 155 million workers”. Both the Democrats and Republicans agree. Payroll tax part of the Bush tax cuts compromise by Obama was in the works over the last two years.
Some Democratic lawmakers have draw backs at the plan because it favors the rich not creating jobs for the middle class and overall economic growth.
The payroll tax cut would provide relief to any worker earning a wage replacing Obama’s “Making Work Pay tax credit”, which increased workers’ paychecks since the president took office. The tax credit requires the Treasury Department to link Social Security with other government programs, which would have to be borrowed as aging baby boomers retire, which could lead to future benefit cuts.
Reports are that Social Security will pay out more in benefits than it collects in payroll taxes provided there are no changes. “Social Security’s trust funds will run out of money by 2037, according to the trustees who oversee the program”. Congress earlier this year offered to raise the retirement age in order to save money. Social Security was setup as a self-funded social program for worker contributions for retirement since 1935. The program has always been successfully until congressional parties are looking for solutions to offset the trillion dollar deficit, attempting to defund our retirement benefits. The government attempt to over leverage our retirement funds.