That was the headline on today's (8/22/11) Nation and World Briefs section in The Denver Post. Let's get up to speed. As part of the onerous deal Obama made with Republicans on spending and extending the Bush era tax cuts, both parties agreed to cut the 6.2% payroll tax dedicated to Social Security to 4.2%. Obama wants to extend that cut for another year. If it is not extended, the payroll tax will go back up to 6.2% on January 1.
The GOP now wants to do away with that cut. That's right. This is the same GOP who was willing to let our country default rather than raise taxes in any form. I seem to remember John Boehner and Mitch McConnel both saying that doing away with cuts that were at one time understood to be temporary were in fact tax raises and they would never hold still for a hike in taxes. In the Iowa debate when the Republican hopefuls were asked if they would be willing to agree to legislation that would address the deficit by employing both spending cuts and raising revenue through tax hikes at a ratio of ten to one, cuts to revenues, they all said no.
Representative Jeb Hensarling of Texas, a member of the GOP leadership said, "It's always a net positive to let taxpayers keep more of what they earn. But not all tax relief is created equal for the purposes of helping to get the economy moving again."
Boy, you can say that again. Apparently, the GOP position is that giving cuts to the wealthy boosts the economy while giving giving cuts to the working class does not.
Yeah, I know that the wealthy are the "job creators" and if we ease off on their taxes they will start hiring people left and right and our economy will be back on track. Just look how well all those tax cuts worked during the Bush Era. Job creation then, compared to job creation during Bush I and Clinton, both of whom raised taxes, was basically stagnant. So was economic growth, except for the banking sector. Personally, if I had put what little money I had under my mattress instead of investing it for those eight years I would be better off today.
And yeah, I know that Social Security is careening toward insolvency. At least that is what Republican profits* of doom would have me believe. They use a strange accounting however. Presidents, both Democratic and Republican, have historically dipped into Social Security reserves to bail out the country during wars and recessions. They all claimed that practice was ok because, after all, it is all ONE budget. Of course, when those raids on the reserve are not repaid and the reserve starts shrinking in the face of larger demands, Social Security no longer seems to be part of that ONE budget and those reserve raiders start alerting the country about the insolvency of the program that they helped create. If it really is all ONE budget, then Social Security is in no more danger of failing than the rest of the country. Am I missing something here?
So it seems to me that there is a little hypocrisy at work here. Isn't allowing the payroll tax cut to expire raising taxes in the same sense that letting the Bush tax cuts expire is?
If I ran the circus, I would agree to let the cuts expire if the Republicans would agree to take that 6.2% out of all earned income. As it is right now, the payroll tax stops for any reported income over $106,000 give or take a few thousand. If you remember, the highly touted deal between Republican icon Ronald Reagan and Democratic icon Tip O'Neal to raise the payroll tax "saved" Social Security, but it did it on the backs of the poor and middle class. It had almost no effect on the wealthy.
Republicans would say that my rant here only serves to foment class warfare. From my vantage point this is no war; it is a massacre.
*I think my spelling error here is quite appropriate given the circumstances, so I will let it stand.
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