Rep. Jeffrey M. Landry (R-La.) last week introduced H.R. 3551, the Social Security Preservation Through Individual Choice Enhancement Act, also known as SSPICE.
Landry’s measure would allow workers to decide each year whether to receive the tax break, which would reduce the payroll tax rate from 6.2 percent to 4.2 percent for employees.
The catch: Workers deciding to take the tax holiday for a given year would have their Social Security retirement age extended by one month — an amount of time that Landry’s office describes as “equal to the decrease in payments the individual will make to Social Security as a result of opting in to the holiday.”
“The payroll tax holiday is a difficult issue for Congress because it forces us to choose between allowing Americans to continue to keep more of their hard-earn money or providing for the continued life of Social Security. . . . By allowing Americans to decide if they want to extend the payroll tax holiday, the SSPICE Act will allow the American public to more actively share in the decisions that will affect this country for decades to come and will force Congress to stop kicking the can down the road,” Landry said in a statement.
If Congress does not move to extend it, the current payroll tax holiday is set to expire Dec. 31. Congressional Democrats and the White House have been pushing for an extension of the tax cut; GOP leaders have backed an extension, but last week a fissure among rank-and-file members was revealed when a majority of Senate Republicans voted against their party’s payroll-tax proposal.
Some Republicans who voted against extending the payroll tax holiday argued that the tax cut threatens the solvency of Social Security and breaks down the “firewall” between the program’s trust fund and the government’s general fund; those lawmakers would probably remain opposed to Landry’s plan, as would members of Congress who have spoken out against increasing the Social Security retirement age.