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View Diary: The White House Shows its Hand and the Republicans Fold (195 comments)

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  •  Still concerned about SS payroll tax reduction (4+ / 0-)

    This is the first mention I've seen about extending the SS payroll tax holiday another year.  I was hoping that was one aspect of the fiscal curb that would be left in place.

    Each year we extend these reduced payroll taxes, the lifespan of SS solvency is reduced.

    All the more reason to go full speed over the fiscal curb, I say...

    •  The payroll tax cut is the most progressive cut (4+ / 0-)

      there is.
        It benefits even the poorest workers and that benefit extends up to only $110,000.
         And the cost of the cut is coming from general revenues, not the trust fund.
         Also, putting (or keeping) money in the pockets of the poor and the middle class has more stimulative benefit than any other tax cut.
         Finally, the R's have a lot of trouble in trying to end a tax cut, or as they see it, raising taxes on the middle class.

         The object here, and in the stimulative spending included is to add some steam to the economic recovery.

      "We the People of the United States...." -U.S. Constitution

      by elwior on Wed Dec 12, 2012 at 03:50:19 PM PST

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      •  Funding SS from general revenues undermines (6+ / 0-)

        the notion that SS is not a driver of the deficit.  It lends firepower to those who want to reduce benefits or weaken it in other ways.

        I've hated this ever since it was implemented, and am worried that after letting it be in place for 2 years going on 3, it will be very hard to re-establish proper funding for SS down the line.

        My one hope is that when SS funding is finally addressed, that the door is open to negotiating a higher income cap.  For example, maybe trade half of the tax reduction for a 50% increase in the cap.  I'd take 5% on the first 165,000 in income over 6% on the first 110,000 any day (and that's coming from somebody who's over the existing cap today).

        •  I prefer to think of it as Earned Income Credit (2+ / 0-)
          Recommended by:
          elwior, Leap Year

          for EVERYONE.  In no way does it undermine that SS is not a driver of the deficit.  Now, if Obama really wants to have honest budgeting, with the wars now included - take all the trust funds out of the budget and report each individually.  This would then reveal for all to see that the deficit is driven by the US military industrial complex and Reagen tax cuts.

          "There is no barrier of people's acceptance. The only barrier is the media. Remember what people cannot see or hear, they cannot think about." - liner notes of Soft Cell's 'The Art of Falling Apart'.

          by dugjxn on Wed Dec 12, 2012 at 04:09:17 PM PST

          [ Parent ]

        •  There's two different sides to this. (3+ / 0-)
          Recommended by:
          democrattotheend, elwior, rosarugosa

          For decades the revenue collected through payroll tax exceeded the benefit payments and the surpluses were borrowed and used for other things.  The Social Security Trust Fund has bonds that it owns like any investor that lends to the US government.  

          In the decades ahead the benefit payments may exceed revenue as the baby boomers retire.  The $2.6 trillion (and growing) balance in the Social Security Trust Fund account would supplement revenue to cover benefits paid.  The bonds it holds would have to be redeemed gradually over time.  

          I wrote another piece recently about a paragraph I found in Ryan's budget where he seemed to imply that redemption of the bonds would depend on the ability of the government to borrow or tax in the future.  He doesn't get to decide that and it irresponsible for him to speculate about it in a document that he wanted the House to pass as a budget resolution (and which it did pass.)  

          The payroll tax reduction is a vehicle for the General Fund to begin repaying what it owes to Social Security.  It also prevents Congress from having access to the surplus amount they'd otherwise borrow and spend.  It's not the borrowing and spending that's objectionable.  It's the involvement of Republicans who aren't trustworthy.

          "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

          by leftreborn on Wed Dec 12, 2012 at 05:03:08 PM PST

          [ Parent ]

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