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

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  •  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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