The Senate yesterday shelved a proposal by Sen. Daniel Patrick Moynihan (D-N.Y.) to cut Social Security payroll tax rates after Republicans succeeded in blocking consideration of the measure on grounds it violated congressional rules against budget-busting.
The Senate voted 54 to 44 in favor of the waiving the rules, falling short of the 60 votes needed to consider a bill that exceeds revenue or spending limits. The vote apparently doomed the proposal for this year.
Scuttled along with Moynihan's proposal were amendments to repeal the current limitation on earnings by Social Security recipients and to increase payments to Social Security beneficiaries born between 1917 and 1926, the so-called "notch babies" for whom benefits were reduced in a 1977 formula change.
Altogether, the proposals would have cost nearly $170 billion over five years, threatening to put a big hole in the five-year, $500 billion deficit-reduction package that Congress is attempting to pass before it adjourns this month. Election-year politics appeared to play as big a role as budget considerations in the outcome, as Republicans scrambled to find a way to scuttle the measure without having to vote directly against it.
Moynihan created a stir late last year when he proposed the Social Security tax rollback as a way of eliminating huge surpluses in the retirement trust fund that he said were being used to mask the true size of the federal budget deficit.
In a modified version of the proposal, Moynihan recommended scaling back the payroll tax for Social Security, exclusive of Medicare, from 6.2 percent to 5.1 percent over the next six years. For the same period, he proposed to increase the amount of wages subject to the tax, raising the wage level to $85,500 by 1996 instead of $70,500.
In invoking budget rules to block consideration of the proposal, Sen. Ted Stevens (R-Alaska) contended that proposing such a tax rollback without saying how it would be paid for amounted to "demagoguery." Either the Social Security trust fund would be undermined or other taxes would have to be increased, he argued.
Claiming a moral victory because a majority of the Senate indicated approval of his proposal, Moynihan vowed to bring it up for a vote every year until it passes.
Sens. Paul S. Sarbanes (D-Md.) and Barbara A. Mikulski (D-Md.) voted to waive the budget rules to allow consideration of the bill, while Sens. Charles S. Robb (D-Va.) and John W. Warner (R-Va.) voted against doing so.