Republicans who are looking for reasons not to support Obama’s push to extend the payroll tax cut have hit on a new one: It poses a grave threat to the Social Security Trust Fund. Here, for instance, is GOP Senator Mark Kirk making that case:
“The White House has redefined this as the payroll tax deduction. It’s not the payroll tax deduction — it’s contributions to Social Security. And when the American people hear that we have legislation moving forward to cut contributions to Social Security and drive the trust fund into the red, I think opposition would be fairly overwhelming.”
Normally, a reduction in the payroll tax would indeed reduce contributions to the Social Security trust fund, but last year’s bill specifically made up for this loss from the general fund. The trust fund got every penny it normally would have, and all the proposals on the table this year do the same.
What changes here isn’t the solvency of the trust fund. What changes is where the money comes from. Payroll taxes mainly come from the middle and working classes. The general fund is supported by income taxes, which mainly come from the well-off and the rich. So, generally speaking, a payroll tax cut that’s compensated for by transfers from the general fund reduces the taxes of the middle and working classes and raises the taxes of the well-off and the rich.
If Republicans object to this — and they do — they should say so. But it’s long past time to stop pretending that this has anything to do with the trust fund, and long past time for the media to stop passing along this claim unchallenged.
While Kevin’s post is well argued, I think he’s missing the real point of Senator Kirk’s argument. When Kirk said that voters would oppose the Obama/Dem proposal once they heard that it would drive the Trust Fund into the red, he didn’t necessarily mean he intends to change voters’ minds by informing them of something that’s true. Rather, Kirk seems to have meant that once voters were told this, regardless of whether it’s true or not, they would object to it.
Indeed, many Republicans and conservatives are doing exactly this — they are telling voters that the payroll tax cut extension would deplete the Trust Fund without telling them that this money is replenished. And in the process, they’re posing as the real defenders of Social Security.
Rush Limbaugh, for instance, recently told listeners that “extending the payroll tax cut depletes the Social Security trust fund,” and that this proves that Obama and Dems are the ones who want to kick seniors out of their houses. Meanwhile, House Republicans have claimed that the Dems’ payroll tax cut extension proposals proves Dems are the ones threatening Social Security. As GOP Rep. Tom Reed put it: “We keep getting blamed for trying to destroy Social security, yet we are standing up for it.”
So, yes, Senator Kirk may be right: If voters are told this, they very well may object. But that won’t mean what they’re being told has any basis in reality.
UPDATE: Links fixed.