Obama: Congress should work through Christmas to extend Social Security revenue cuts

By | December 3, 2011

President Obama announced a 17-day long vacation to Hawaii for the holidays while almost simultaneously telling Congress to keep working through the break to pass an extension of the current Social Security revenue cut.

Obama has been pushing for Congress to extend the Social Security revenue cut and increase the length of time Americans can be given unemployment insurance – which is currently at almost 2 years. Republicans have counter-offered to do so if the increased spending and reduced revenue can be offset by spending cuts.

The president said, “Both parties came together to cut payroll taxes for the typical middle-class family by about $1,000, but that tax cut is set to expire at the end of this month.” To keep that from happening Congress will need to pass legislation to extend the cut. “We’re going to keep pushing Congress to make this happen,” Obama said. “They shouldn’t go home for the holidays until they get this done.”

Congressional Republicans are concerned that the cuts, if not offset, will continue to drain Social Security of the revenue needed to keep the program going. House Republicans have rebuffed the 2% revenue hit to Social Security saying that it could cost as much as $120 billion to the programs balance sheets[1].

The payroll tax that has been cut directly affects Social Security. The tax cut that Obama wants extended is a direct 2% cut to the  Social Security portion of payroll taxes.

Friday morning, House Speaker John Boehner and GOP leaders proposed a legislative package to their members. The bill contained an extension of unemployment benefits, a one year extension of the Social Security revenue cut, a 2-3 year pay freeze for all federal employees – including Congress, language to make it easier for the Keystone XL pipeline to get approved and a directive to the EPA to hold off on boiler/incinerator regulations.

The federal pay freeze is expected to save almost $100 billion but those savings would be to the overall deficit. It would not replace the missing revenue that Social Security would receive had Obama not demanded the payroll tax cuts be extended.

The current Social Security revenue cut has had little effect on the economy and jobs. As the cut is only to the employee’s share of the Social Security tax, employers have seen no reduction in tax liability. There is also historical proof that such short-term, temporary cuts don’t stimulate the economy – at all

..economic theory and the experience with tax rebates in 2001 and 2008 tell us that people are strongly inclined to save temporary increases in income. People only increase their spending when they perceive an increase in their permanent income.[2]

While the President has demanded the extension of the Social Security revenue cut, his leadership on the issue is questionable. While telling Congress to work through the holidays if necessary – Obama is planning a lavish, 17-day holiday vacation to Hawaii – after having been there just two weeks ago.

Sources:
[1] Businessweek – http://www.businessweek.com/ap/financialnews/D9RCGFU81.htm
[2] NYT Economix Blog – http://economix.blogs.nytimes.com/2011/08/30/the-case-against-a-payroll-tax-cut/

Conservative Daily News allows a great deal of latitude in the topics contributors choose and their approaches to the content. We believe that citizens have a voice - one that should be heard above the mass media. Readers will likely not agree with every contributor or every post, but find reasons to think about the topic and respond with comments. We value differing opinions as well as those that agree. Opinions of contributors are their own and do not necessarily reflect those of CDN, Anomalous Media or staff. Click here if you'd like to write for CDN.
Put This Story in your Circles and Share with your Friends

0 thoughts on “Obama: Congress should work through Christmas to extend Social Security revenue cuts

  1. WillofLa

    We should not play this same game over and over again with the damn Socialist Democrats that if you don’t agree with us you don’t get to go on vacation until you do agree with us. Last year we were forced to watch that bastard Harry Reid keep the Senate until 11:00 Christmas Eve on some stupid bill that did nothing but hurt us even more, while Obama went off to enjoy some pagen ceremony . I strongly suggest that every Republican go home when they are supposed to go home because here we are again with the exact same thing staring us in the face that we had right after the election last November where we had the unemployment extension and the budget increase that Boehner caved in on, just like he will on this.

    I have contacted to my two representative that they abolish the so-called Super Committee. I’ll be damned if I am going to sit by idlely and allow Obama to use the Super Committee because he will not talk to the Republican controlled Congress whose responsibility to do what the Super Committee is doing. The Constitution is very clear that no other entity will take the place of the Congress when it comes to their duty. And Boehner went right along with the Socialist Democrats in setting up a committee to do what the Congress was supposed to do. But see Obama is like a spoiled kid who won’t eat his vegetables and sits and folds his arms and says, “no!”. No, he won’t negotiate with anyone other than Socialists and Communists disguised as Progressives and are called Democrats. He hates Republican’s who amoung their numbers are conservatives who believe that Obama is not a natural born citizen, has committed numerous crimes while in office, has disobeyed many of our fixed laws, and has over ridden the Constitution by way of Presidential Directives, or Executive Orders many, many times. And what makes him maddest is he knows we all know and aren’t afraid to tell everyone about it in our rallies, and on the internet.

    Obama should be forced to stay if he makes everyone else stay. But you see where he’s going to be on Christmas day don’t you? The White House is going to be cold and lonely on Christmas morning. Something that shouldn’t be.