Tag Archives: Payroll tax cuts
President Barack Obama on Friday pledged an aggressive push to pass an extension to the payroll tax cut for U.S. workers, saying lawmakers must not leave for their holiday break without taking action on it.
“We need to get this done. And I expect that it’s going to get done before Congress leaves. Otherwise, Congress may not be leaving and we can all spend Christmas here together.”
Since Senate Majority Leader Harry Reid has refused to acknowledge the fact that we can not keep on piling on national debt and taxing job creators in the current recession by blocking any chance at bi-partisan payroll tax/unemployment extensions,
Barack Obama had better be ready to turn in his Hawaiian shirts and suntan oil for snow boots and ear muffs. It is high time to call Obama’s bluff and force him to actually come to the table and act as President in working with Congress to resolve the current payroll tax extension dilemma. Then again, that wouldn’t allow Obama the Grinch to run his campaign against a do-nothing Congress would it? While Obama channels the Harry Truman campaign of 1948, DC remains in a leaderless deadlock. We the people look forward to seeing Barack Obama working on Christmas eve in Washington DC, instead of hobnobbing around with prostitute-soliciting lifelong friends such as Robert Titcomb in Hawaii:
“The president’s fourball at the Mamala Bay Golf Course includes his long-time friend Robert “Bobby” Titcomb who was arrested and plead no contest in May to soliciting a prostitute, Marvin Nicholson, and White House advance man Pete Selfridge,”
Barack Obama is not fooling the informed public about the payroll tax extension debate, especially those who may have read this article. We the people look forward to seeing this Grinch in an empty suit posing as the President of The United States of America standing up in Congress telling them how he took them away from their families at Christmas time. After Barack Obama leads Congress towards passing the payroll tax holiday extension, he then would be free to take Mr. Titcomb on a tour of the Chicago Steam bath he grew so fond of to celebrate the New Year. Birds of a feather and all that.
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.
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.
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.
 Businessweek – http://www.businessweek.com/ap/financialnews/D9RCGFU81.htm
 NYT Economix Blog – http://economix.blogs.nytimes.com/2011/08/30/the-case-against-a-payroll-tax-cut/
On Thursday, Dec.1st the battle to extend the payroll tax holiday and unemployment insurance benefits reached new heights in the Senate, as not only did Republicans battle Democrats, but both parties saw raging fights within their own ranks over how to pay for the extensions, along with whether the tax holiday should even be extended at all. In the end, once again, nothing was accomplished.
The Senate Republican bill won only 20 votes, less than half the GOP conference. The Democratic bill also went down in flames, 51-49, failing to muster the 60 votes needed for passage. The debates included back and forth rhetoric on whether the tax holiday actually has ever created jobs or improved the economy, the fact that the Democrat’s bill was weakening Seniors Social Security programs by lessening revenues. Here is a common sense question that will never be asked in the elitist halls of Congress during these debates: Why not give the holiday tax break to all of America’s workers by cutting federal payroll taxes, instead of SSI payroll taxes? (fica) That way you give the workers more money in their pocket, while at the same time keep funds coming into an already under-funded SSI program.
The Truth: Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent. In addition, Senate Republican leaders would go after “millionaires and billionaires,” not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. ← These facts are basically being ignored in the media today.
Fact: The Congressional Budget Office said the Republican bill would reduce federal deficits by $111 billion, mainly because of the pay freeze and the reduction in the federal work force.
Senate Democratic leaders want a deeper temporary reduction in Social Security payroll taxes. They would provide payroll tax relief to employers as well as employees. And they would offset the cost with a 3.25 percent surtax on modified adjusted gross income in excess of $1 million. Once again, instead of working with Republicans to get our out- of – control spending under control, Liberal Democrats in the Senate want to grow government by taxing Americans more. Spend, spend spend is all these tyrants want to do, with no regards to fiscal sanity in any way shape or form. Here are a few quotes from the Senate payroll tax debate yesterday, that may surprise some of our readers:
After House Speaker Boehner alluded to the benefits of the tax holiday as, “I don’t think there’s any question that the payroll tax relief, in fact, helps the economy. You’re allowing more Americans, frankly, every working American, to keep more of their money in their pocket,” the Speaker added. “Frankly, that’s a good thing.”
To which, Senator Orin Hatch then responded, “If they could show me a lot of increases in jobs or something, that’s a different matter,” Sen. Orrin Hatch of Utah, the ranking Republican on the Finance Committee, said Wednesday. “But I don’t think they’ve been able to show that.”
Then we have a strong statement from Senate Democrat Joe Manchin: “Letting Americans believe that we don’t have to pay for Social Security is wrong. It is dead wrong,” Manchin said. “And I will not vote for it. Period. Under any condition.” Finally, common sense rears it’s long-forgotten head up in the Senate!
And finally, Senator Mark Krik (R – Ill) threw in another dose of reality: “I don’t think seniors should be based on a ‘trust us’ policy, that we’ll pay you back,” Kirk added. “And I would actually say even the political vote is to vote against this so that you’re for Social Security.”
Today, the House is supposed to come out with their own version of the tax holiday and unemployment benefits extension bill. The vicious cycle of the irresponsible debt-spending versus a fiscally responsible government-political-battle rages on with exactly no Presidential leadership anywhere to be found. Barack Obama is too busy waging class warfare in campaign fund-raising speeches on the taxpayers dime for the 70th time in 2011,… to actually concern himself with doing his job as President of the United States.
2012 just can’t get here fast enough!