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Posted by madfloridian in General Discussion
Fri Jul 01st 2011, 10:19 PM
Obama talked of "sacred cows" in his press conference. Then he talked of "payroll tax cuts." Perhaps he considers Social Security a "sacred cow."

I know I do think of it that way, but not in the rather sarcastic way the president referred to it. I consider Social Security sacred, period. I always thought Democrats did as well.

Payroll tax cuts rob the poor to feed the rich

Washington's long-term nostrums all involve preserving the status quo for the Wall Street class. Cutting Social Security and Medicare? That's on the table. Rolling back tax benefits for the wealthy? That's not.

Make no mistake: This is a bipartisan effort. It started back in December, when President Obama capitulated to the GOP on a budget deal by cutting the payroll tax, which funds Social Security. Advocates for the program pointed out then the shortcomings of this approach: It was targeted inefficiently and unfairly, skewing to the upper middle class and hurting lower-income families in comparison with the Making Work Pay tax credit it replaced.

Even more troubling, it blew a hole in the financing mechanism for Social Security by reducing payroll tax revenue by roughly $110 billion for the year. It was plain then, as it is now, that once you've cut a tax, it's ever harder to restore it.

..."We were assured that the payroll tax cut negotiated in December would be a one-time, temporary step. No danger that Social Security could be permanently impaired, or so the assurances came. It's now six months later. More economic stimulus is obviously needed, and the payroll tax is on the table again. (Surprise!)

This time the talk is of extending the one-time-only cut for workers, whose FICA deductions dropped to 4.2% from 6.2% of covered pay, and throwing in a similar break for employers, who also pay 6.2% of covered payroll. The talk comes against the backdrop of a signal from the big retirement lobby group AARP that it would accept certain changes in Social Security, including benefit cuts. (AARP backed off, but only a bit, when its policy shift was divulged publicly Friday.)

If you keep cutting the payroll tax on Social Security, it will damage the program not just for future generations but for those presently on the program.

Now Obama is apparently considering extending payroll tax cuts. In fact it was at the news conference this week that President Obama reiterated his possible support for continued payroll tax cuts.

Transcript of Obama's new conference

"Democrats have to accept some painful spending cuts that hurt some of our constituencies and we may not like. And we’ve shown a willingness to do that for the greater good. To say, look, there are some things that are good programs that are nice to have; we can’t afford them right now.

So the question is, if everybody else is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction
, then I think it would be hard for the Republicans to stand there and say that the tax break for corporate jets is sufficiently important that we’re not willing to come to the table and get a deal done.

It truly sounds as if he is referring to Social Security as a sacred cow since it followed his statement about how Democrats may have to accept painful spending cuts that hurt "our constituencies."

Obama talked in the press conference of accepting further "payroll tax cuts."

"I will say that precisely because tough votes in Congress are often avoided, that it may make sense to also deal with something like a payroll tax cut at the same time — because it does have budget implications and the American people need to know that we’re focused on jobs and not just on deficit reduction, even though, as I said, deficit reduction helps to serve the job agenda. I think they want to have some confidence that we’ve got a plan that’s helping right now.

But I don’t think it should be a complicating factor — because if Mitch McConnell and John Boehner came to me and said, all right, we’re ready to make a deal, here’s a balanced approach to debt and deficit reduction, but we want to argue about payroll tax cuts later, they’re not set to expire until the end of this year — if that was a situation that they presented, then I think we would have a serious conversation about that. I would not discount that completely."

....And these folks are counting on us. They desperately want to believe that their leadership is thinking about them and not playing games. And I think that if all the leadership here in Washington has the faces and the stories of those families in mind, then we will solve this debt limit issue; we will put in place steps like a payroll tax cut and infrastructure development; we’ll continue to fund education; we’ll hold true to our commitment to our seniors."

More on this topic has been discussed by Obama before. It's a very bad idea, and it will affect seniors already on Social Security because they are cutting back on the funding come in. It's a first step in cutting payments and having to raise the retirement age.

I agree with the National Committee to Preserve Social Security and Medicare on this issue.

"This 2 percent payroll tax cut is the beginning of the end of Social Security as we know it," said the National Committee to Preserve Social Security and Medicare, which is led by former Rep. Barbara B. Kennelly, D-Conn. "Worker contributions have successfully funded the program for 75 years and that critical linkage between contributions and benefits is what keeps Social Security a self-funded program."

Payroll Tax Cut Worries Social Security Advocates

The mention of sacred cows yesterday in the speech angered me. In fact referring to any programs that help the people of this country as "sacred cows" is rather snide. Social Security is not a "sacred cow", it is a program that is an integral part of the lives of seniors.

It is truly sacred, and the president is wrong to consider further payroll tax cuts.
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