Great news: Deal struck on extending temporary tax cut that hasn’t boosted the economy at all

posted at 11:00 am on February 16, 2012 by Ed Morrissey

Yeah, I know I’m supposed to feel all warm and fuzzy about the fact that Democrats and Republicans didn’t play this out to the 11th hour, like they do with every other dispute these days.  We’re supposed to cheer because the system worked and it produced a bipartisan result in a year that will see precious few of them.  Too bad that it sucks money out of an already-ailing trust fund while delivering none of the economic impact promised when we tried it last year:

Congressional negotiators resolved all differences on an agreement to extend the payroll tax cut and unemployment benefits while avoiding a fee cut for Medicare doctors for the rest of the year, leaving only technical issues to sort out.

“It’s good for the country. It’s very good for the country,” Montana’s Max Baucus, the Democratic chairman of the Senate Finance Committee, said early Thursday in announcing the deal.

But resolving those technical issues and getting the necessary signatures required to finalize the conference report was expected to take through at least Thursday.

“For the good of the country”?  Really?  It’s more for the good of incumbents who stepped into a trap in December 201o when they first proposed the supposed stimulus of the payroll-tax holiday.  The extra $40 $20 a week average ended up providing such a big stimulus that most people never even noticed it, and the American economy growth rate managed to drop from 2010 to 2011.  The only reason Congress was in such a rush to work in bipartisan fashion to extend this temporary, ineffective flop was to avoid having the other party accusing them of hiking taxes on the middle class in an election year.

Chuck Blahous calls the spectacle a lesson on how not to make public policy, and gives seven detailed reasons why.  He concludes:

The political dynamic surrounding the payroll tax cut has now evolved in such a way that neither party wants to be blamed for its expiration, so it will likely be extended even though it has now become almost a perfect storm of policy mistakes. Its ultra-temporary nature undoes virtually all of the positive stimulus impact claimed for it, while the adverse effects include high policy uncertainty, undercutting budget transparency, increased fiscal pressure, and lasting damage to Social Security’s financial and political foundation, this last of which may well prove irreparable.

Our public policy process is ever an imperfect one, necessarily producing messy outcomes because of the compromises necessary between conflicting perspectives. But even by these standards, it is rare for policy makers to inflict as much damage as is being done with the payroll tax cut. If lawmakers cannot muster the will to terminate it now, one must hope that they are able to do so before it goes on too much longer.

We need to end the temporary tax gimmicks, especially those that have nothing to do with long-term investment, and instead reform tax codes permanently and reduce regulation so that investors can price risk effectively.  Programs like the payroll-tax “holiday” make the investing environment worse by introducing far too much instability and uncertainty into those calculations, as well as accelerating the fiscal time bombs in our entitlement programs.  That’s why this is more of a headdesk moment than a celebratory event.

Update: Joe R e-mails me to note that the $40 figure is actually per two-week pay period.  It’s $20 a week.  I’ve fixed it above.


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The extra $40 a week average ended up providing such a big stimulus that most people never even noticed it, and the American economy growth rate managed to drop from 2010 to 2011.

And by summer, $40 dollars will put 1/4 tank of gas in your car.

portlandon on February 16, 2012 at 11:04 AM

Yeah, it just gave us a new mortgage tax. It will be implemented at 10 basis points, but the end of the year will be 50 basis. This tax is NEVER going away.

Oil Can on February 16, 2012 at 11:05 AM

I blame the GOP for being so weak in the past decade or two that they layed the groundwork for Dems to roll over us for the past six years on the theory that they are helping America.

GOP is the party of stupid.

BuckeyeSam on February 16, 2012 at 11:08 AM

I am trying to figure this out. Is the conservative movement now against tax reductions? That is, are we now a pro-tax movement?

AngusMc on February 16, 2012 at 11:09 AM

Who was the last Republican Speaker of the House who played hard ball and actually held the line and got conservatives anything good?

portlandon on February 16, 2012 at 11:10 AM

There is no trust fund.

kunegetikos on February 16, 2012 at 11:10 AM

Yaay! Bipartisanship! Wahoo!

Notorious GOP on February 16, 2012 at 11:11 AM

When it comes to protecting their fat, hairy, gold-plated asses both parties have an amazing ability to find common ground. This is an election year so the Congressional Howler Monkeys managed to come together in a pact of mutual protection from the unwashed hoi polloi pounding on the castle gates.

My dream is that the day will come when every single one of these jackwagons is running for their lives from an enormous mob of enraged Americans, scrambling toward the last evacuation helo. I want to see them scratching and clawing at one another to gain one of the few available seats while the unlucky are pulled screaming back into the crowd.

Bishop on February 16, 2012 at 11:11 AM

My understanding of this, which is the Zero Hedge interpretation, is that Republicans figured out that the government’s going to be out of cash by September and that doing this will accelerate the process.

That means Obama will have to push through another debt ceiling increase during the middle of his re-election campaign after claiming to have gotten enough of an increase last time to make it to 2013.

teke184 on February 16, 2012 at 11:12 AM

I just love politicians. They have done so much for the economy and jobs. The country would tip over like Guam if we didn’t have politicians keeping us afloat. I sent all my politicians a lovely valentine card and a box of chocolates. You know, life is like a box of chocolates.

they lie on February 16, 2012 at 11:12 AM

the payroll-tax “holiday” make the investing environment worse

Yeah, if it weren’t for that, American manufacturing would be flourishing and there would be jobs other than pizza delivery and hospital staff…

kunegetikos on February 16, 2012 at 11:13 AM

This is the congress that Romney supporters are trying to convince us will keep Romney in check.

besser tot als rot on February 16, 2012 at 11:14 AM

Gee … it almost appears like they’re buying the “do nothing congress” schtick and trying to fight that label than actually sticking to principles.

Whodda thunk?

Lost in Jersey on February 16, 2012 at 11:15 AM

This is the congress that Romney supporters are trying to convince us will keep Romney in check.

besser tot als rot on February 16, 2012 at 11:14 AM

ROFL

Now THAT is a great point. Concise and direct.

Bishop on February 16, 2012 at 11:16 AM

Any tax cut is better than no tax cut. I’m happy to have the extra $40 a month.

adamcr on February 16, 2012 at 11:16 AM

My understanding of this, which is the Zero Hedge interpretation, is that Republicans figured out that the government’s going to be out of cash by September and that doing this will accelerate the process.

teke184 on February 16, 2012 at 11:12 AM

I’d love to believe this is true, but I just don’t believe the pubs are that bright.

Lost in Jersey on February 16, 2012 at 11:18 AM

Romney is a good businessman…figure it out

tomas on February 16, 2012 at 11:18 AM

$40 doesn’t even buy $30.

docflash on February 16, 2012 at 11:18 AM

besser tots, that is damn funny…and sadly true. Good job.

DanMan on February 16, 2012 at 11:21 AM

Any tax cut is better than no tax cut. I’m happy to have the extra $40 a month.

adamcr on February 16, 2012 at 11:16 AM

Unfortunately, cutting payroll taxes makes our broke Social Security and Medicare system even broker. That $40 dollars will either be borrowed or taken from someone else to make up for it.

darwin on February 16, 2012 at 11:21 AM

Well I guess that I didn’t mind it because it said, 10 months. That takes us to election. We have to beat Obama first and then fix everyting. Because right now I believe its better not to be whacked about the head by Dems saying Repubs want to raise middle class taxes. If we don’t win 2012 we won’t get any entitlment reform and that is what it will really take to protect Social Security.

magicbeans on February 16, 2012 at 11:23 AM

Great news: Deal struck on extending temporary tax cut Bush tax cuts that hasn’t boosted the economy at all

Just apply the same statistics.

kunegetikos on February 16, 2012 at 11:27 AM

Something I would be curious to know, but haven’t seen…Does the reduction in the amount individuals are paying in to social security have any impact on the amount of expected retirement benefits? Monthly checks are based on what you have paid in to the system, yes?

Larr
USN-RET

Larr on February 16, 2012 at 11:27 AM

Is Congressional approval still in double digits..?

d1carter on February 16, 2012 at 11:27 AM

Yeah, just give Barry what he wants…he’s obviously got an edge in the election year politics category.

bill glass on February 16, 2012 at 11:30 AM

My understanding of this, which is the Zero Hedge interpretation, is that Republicans figured out that the government’s going to be out of cash by September and that doing this will accelerate the process.

teke184 on February 16, 2012 at 11:12 AM

That’s my understanding as well.

Rather than letting the media paint them as “meanies” for doing the right thing, just give the Dems more rope to hang themselves.

I hope it works.

Droopy on February 16, 2012 at 11:33 AM

My dream is that the day will come when every single one of these jackwagons is running for their lives from an enormous mob of enraged Americans, scrambling toward the last evacuation helo. I want to see them scratching and clawing at one another to gain one of the few available seats while the unlucky are pulled screaming back into the crowd.

Dang. That’s a great visual. And one that I wholeheartedly support…

Battlecruiser-operational on February 16, 2012 at 11:33 AM

The sooner we can collapse, the sooner we can rebuild. There is no political will to do what is necessary, and Obama’s window of time to do it and become ‘historic’ has passed.

HopeHeFails on February 16, 2012 at 11:34 AM

Thanks for nothing! GOP leadership stinks – on ice. It’s a nationwide disease as well. Need to elect more Tea Party folk (Your name here _____) in 2012, 2014, 2016, etc. etc. etc.

Bob in VA on February 16, 2012 at 11:34 AM

I am trying to figure this out. Is the conservative movement now against tax reductions? That is, are we now a pro-tax movement?

AngusMc on February 16, 2012 at 11:09 AM

Any tax cut is better than no tax cut. I’m happy to have the extra $40 a month.

adamcr on February 16, 2012 at 11:16 AM

Here are two people that have no idea what the difference is between a payroll tax, and actual tax reductions such as income or capital gains. The extra $40/month working folks are enjoying is money NOT going into the Social Security account. Your kids and grandkids will ask you why you thought it was necessary to further gut Social Security for this asinine “holiday gift”.

Rovin on February 16, 2012 at 11:35 AM

Something I would be curious to know, but haven’t seen…Does the reduction in the amount individuals are paying in to social security have any impact on the amount of expected retirement benefits? Monthly checks are based on what you have paid in to the system, yes?

Larr
USN-RET

Larr on February 16, 2012 at 11:27 AM

“Your benefit payment is based on how much you earned during your working career. Higher lifetime earnings result in higher benefits”.

darwin on February 16, 2012 at 11:37 AM

I am trying to figure this out. Is the conservative movement now against tax reductions? That is, are we now a pro-tax movement?

AngusMc on February 16, 2012 at 11:09 AM

No, but it’s not really a conservative tenet to raid already bankrupt entitlement programs, which is really the only way SS is funded. At least if you’re going to raid it, offset the costs somewhere else. They only able to get Democrats to partially do that.

Whatever. This wasn’t the hill to die on, and it removes one of Obama’s key talking points.

The Count on February 16, 2012 at 11:38 AM

Unfortunately, cutting payroll taxes makes our broke Social Security and Medicare system even broker. That $40 dollars will either be borrowed or taken from someone else to make up for it.

Works for me. I wish it would go broke tomorrow. I have paid over $100,000 into it over the years and am now finally getting some back. I’ve written off EVER getting my money back or evening getting a check, so this small percentage is better than nothing.

Of course I’ll end up bending over and paying more somewhere else, but for now I will enjoy it.

Robert Jensen on February 16, 2012 at 11:38 AM

Democrats raid the SS Fund and stupid Republicans go along. Never should have gone along with this in the first place. The 2010 election meant nothing to the Washington Republicans. This party has stabbed conservatives in the back since Reagan left office. If Gore had won in 2000 we would be better off now. Bush brought us Obama. I always moan when someone states that Bush was a Conservative. He was a Christian Socialist. Hey – how about we run someone who has a problem with contraception. F them all.

kozmo on February 16, 2012 at 11:41 AM

My understanding of this, which is the Zero Hedge interpretation, is that Republicans figured out that the government’s going to be out of cash by September and that doing this will accelerate the process.

teke184 on February 16, 2012 at 11:12 AM

You got a link? I’m interested to read.

The Count on February 16, 2012 at 11:42 AM

Works for me. I wish it would go broke tomorrow. I have paid over $100,000 into it over the years and am now finally getting some back. I’ve written off EVER getting my money back or evening getting a check, so this small percentage is better than nothing.

Of course I’ll end up bending over and paying more somewhere else, but for now I will enjoy it.

Robert Jensen on February 16, 2012 at 11:38 AM

The point is they’re raising taxes on businesses and creating user fees to make up for it. You’re paying for it, you just don’t know it.

darwin on February 16, 2012 at 11:42 AM

Never underestimate the intelligence of 52% of Americans.

~(Ä)~

Karl Magnus on February 16, 2012 at 11:43 AM

Personally, the “tax cut” via SS payments is a good thing. I want to break that system so that serious reform will come sooner than later. Such reform should include dropping employer participation. If SS is to exist, all payments should be visible to the payer, meaning that if it is a 15% tax, the employee should see and feel the bite. Better yet, it needs to be phased out until only private contributions remain. But not until those already depending on it get taken care of.

AH_C on February 16, 2012 at 11:43 AM

Never underover-estimate the intelligence of 52% of Americans.

;-

Karl Magnus on February 16, 2012 at 11:44 AM

I am trying to figure this out. Is the conservative movement now against tax reductions? That is, are we now a pro-tax movement?

AngusMc on February 16, 2012 at 11:09 AM

Only against tax reductions when they are not exclusively for rich people. Trickle down and what not.

sob0728 on February 16, 2012 at 11:44 AM

The Bush tax cuts didn’t do anything to improve the economy either but i am yet to see a repug who was against it.

Uppereastside on February 16, 2012 at 11:48 AM

Only against tax reductions when they are not exclusively for rich people. Trickle down and what not.

sob0728 on February 16, 2012 at 11:44 AM

What? Feel free to expand.

darwin on February 16, 2012 at 11:48 AM

The Bush tax cuts didn’t do anything to improve the economy either but i am yet to see a repug who was against it.

Uppereastside on February 16, 2012 at 11:48 AM

Your evidence for that is what?

darwin on February 16, 2012 at 11:49 AM

Give me my money now *and later!!*

SouthernGent on February 16, 2012 at 11:51 AM

Only against tax reductions when they are not exclusively for rich people. Trickle down and what not.

sob0728 on February 16, 2012 at 11:44 AM

If the Bush tax cuts were for the rich, how come the lowest income earners got the biggest rate reduction? You guys are a bunch of liars.

The Count on February 16, 2012 at 11:54 AM

The Bush tax cuts didn’t do anything to improve the economy either but i am yet to see a repug who was against it.

Uppereastside on February 16, 2012 at 11:48 AM

How about 6 years of full employment, jagoff?

The Count on February 16, 2012 at 11:55 AM

Bishop on February 16, 2012 at 11:11 AM

A warm, fuzzy and pleasing vision!

marinetbryant on February 16, 2012 at 11:55 AM

If the Bush tax cuts were for the rich, how come the lowest income earners got the biggest rate reduction? You guys are a bunch of liars.

The Count on February 16, 2012 at 11:54 AM

Plus, the top 50% of earners pay all the taxes. The bottom 50% pay nothing. You’re right, they’re filthy liars.

darwin on February 16, 2012 at 11:55 AM

You got a link? I’m interested to read.

The Count on February 16, 2012 at 11:42 AM

http://www.zerohedge.com/news/uh-marriner-eccles-we-have-problem-obama-predicts-he-will-breach-debt-ceiling-two-months-electi

If indeed the $160 billion in new debt is added, the US may not even last to September before Tim Geithner is forced to start plundering G-fund and other retirement accounts. It also means that two months of America in a debt ceiling breach situation will deal a dramatic blow to Obama’s reelection chances as the last thing the US population will want is a replay of last summer.

teke184 on February 16, 2012 at 12:04 PM

Well, the payroll tax cut didn’t stimulate much of anything in Illinois, because our state legislature sopped it all up by raising the state income tax rate by the same amount. Despite this, they still can’t figure out how to balance the budget.

Bill Roper on February 16, 2012 at 12:12 PM

The politicians will not begin to act rationally until the markets force a return to sanity.

As for the economy, there were three good reports today: first time unemployment claims dropped (unexpectedly) to the lowest level in 4 years – and more importantly the 4-week average continued to decline; wholesale inflation remained in check; and housing starts jumped in January (probably due to the mild winter). This on the heels of very strong manufacturing report yesterday (“The manufacturing sector is on a tear” – Paul Ashworth, Capital Economics) which was followed by a stronger than expected report from the Philly Fed Index today. The markets are shaking off Greek worries and rallying.

It is now very clear that the US economic engine is revving up. Dow 13K soon.

TouchdownBuddha on February 16, 2012 at 12:18 PM

Wait a minute.   Isn’t this an extension to the extension to the extension of the ‘Bush’ tax cuts that the Repubs wanted and Dems did not but were forced to accept last election cycle (2010)?

The extensions were not intended to help the ecnomy – they were to not harm the economy further.   Obambi does that all by himself.

And how have they managed to turn the discussion completely around?

TerryW on February 16, 2012 at 12:19 PM

It is now very clear that the US economic engine is revving up. Dow 13K soon.

TouchdownBuddha on February 16, 2012 at 12:18 PM

It’s going to stall out when gas prices spike due to inflation and an inevitable Iranian crisis.

teke184 on February 16, 2012 at 12:23 PM

besser tot als rot on February 16, 2012 at 11:14 AM

Yup, true in a funny/sad way.

Throw all the bums out, starting with that flop-eared dork zer0bama.

MisterElephant on February 16, 2012 at 12:24 PM

We are voting repub in November. If they get the WH, Senate & House and don’t do some very significant “conservative” changes in the first 6 – 8 months, we are never voting for them again. All we ever see is cave, cave, and more cave. Enough is enough. We will have been lied to for the last time. We will vote for someone other that a dem or repub.

johnny reb on February 16, 2012 at 12:36 PM

The payroll tax cut was brilliant politics on the Democrats’ part, give the devil his due. When we tried to do the right thing before and pay for it with cuts, we had our clock cleaned politically.

Common sense is a political loser when it involves taking money out of people’s pockets. It doesn’t matter how it got there in the first place.

Those who whine about the GOP caving offer no plan of their own that might have had success this time around. If we tried to fight again, we would lose again, period. This is hardly the hill we want to die on.

Adjoran on February 16, 2012 at 12:37 PM

Well we need that ‘tax break’ now Ed. It will help pay for the rising fuel costs.

GarandFan on February 16, 2012 at 12:51 PM

“For the good of the country”? Really? It’s more for the good of incumbents who stepped into a trap in December 2010…

In fact, most economists agree that the payroll tax cut significantly boosted demand:
http://www.usatoday.com/money/economy/story/2011-09-09/obama-jobs-plan-economists/50336434/1

Do you really want to start arguing against the economic benefits of putting more cash into employee’s wallets, especially for the significant number who don’t have much discretionary spending power?

bayam on February 16, 2012 at 12:58 PM

We really need to quit with the $40 per week. The deal is a 2% reduction in FICA. For that to come to $40 per week you have to make $2000 per week – over $100k per year. Obummer is trying to make this sound like more than it is by saying $40 per paycheck assuming checks every 2 weeks. He assumed, correctly, that it would be mis-interpreted and it would sound like more than it is.

FoByFo on February 16, 2012 at 1:02 PM

In fact, most economists agree that the payroll tax cut significantly boosted demand:
http://www.usatoday.com/money/economy/story/2011-09-09/obama-jobs-plan-economists/50336434/1

Do you really want to start arguing against the economic benefits of putting more cash into employee’s wallets, especially for the significant number who don’t have much discretionary spending power?

bayam on February 16, 2012 at 12:58 PM

That’s a prediction from liberal economists on a bill that never happened, you freaking moron.

Chuck Schick on February 16, 2012 at 1:07 PM

In fact, most economists agree that the payroll tax cut significantly boosted demand:

bayam on February 16, 2012 at 12:58 PM

By most you of course mean six.

Lost in Jersey on February 16, 2012 at 1:13 PM

In fact, most economists agree that the payroll tax cut significantly boosted demand:

Do you really want to start arguing against the economic benefits of putting more cash into employee’s wallets, especially for the significant number who don’t have much discretionary spending power?

bayam on February 16, 2012 at 12:58 PM

Well, if $40 dollars does that … imagine what a tax rate cut across the board would do!

darwin on February 16, 2012 at 1:18 PM

If the GOP goal is to ensure they don’t get new members or any that left the party to return than they are succeeding beyond their wildest dreams. If not they might want to rethink doing things like this.

JeffinSac on February 16, 2012 at 1:46 PM

The $1.8 trillion figure was included in a December 2008 memo authored by Christina Romer (the incoming head of the Council of Economic Advisers) and obtained by Scheiber in the course of researching his book.

“When Romer showed [Larry] Summers her $1.8 trillion figure late in the week before the memo was due, he dismissed it as impractical. So Romer spent the next few days coming up with a reasonable compromise: roughly $1.2 trillion,” Scheiber writes.

As has now become the stuff of Obama administration lore, when the final document was ultimately laid out for the president, even the $1.2 trillion figure wasn’t included. Summers thought it was still politically impractical. Moreover, if Obama had proposed $1.2 trillion but only obtained $800 billion, it would have been categorized as a failure.

J_Crater on February 16, 2012 at 1:55 PM

Social Security’s bank account will go bust in 2022 — the first time the program’s combined trust funds will run a deficit, according to President Obama’s budget released Monday.

OBOZO can’t wait to get to the end of the lunatic-left d-cRAT socialists’ “Road to Hell” – i.e. Greece/california.

Please tell your clueless, ignorant friends (you know, the ones that swallow the lies and leftist propaganda from the soros-controlled d-cRAT stooges and puppets in the socialist media) the TRUTH that the payroll tax is the ONLY funding source for Social Security and that cutting the income from the tax without compensating spending cuts directly increases the national deficit and debt, as well as further bankrupting Social Security.

TeaPartyNation on February 16, 2012 at 2:11 PM

“It’s good for the country. It’s very good for the country,” Montana’s Max Baucus, the Democratic chairman of the Senate Finance Committee, said early Thursday in announcing the deal

So says the backer of the Obamacare legislation. After seeing him in action and reading all he did to get Obamacare passed, I’d send money to any Senator that would run against him. If you’ve seen Reid in action, then Baucus was just like that during all of those Senate Finance Committee Hearings.

This payroll reduction is exactly what would happen with Obamacare. It would not be repealed, it would be “amended” by bits & pieces. SS needs overhauled.

bluefox on February 16, 2012 at 2:13 PM

Decojonefied Rs deserve to be sent home, all of them.

The extension doesn’t even fill one of Obama’s hightened tax dollar tanks.

Schadenfreude on February 16, 2012 at 2:24 PM

Never underover-estimate the intelligence of 52% of Americans.

;-

Karl Magnus on February 16, 2012 at 11:44 AM

+1

burserker on February 16, 2012 at 2:30 PM

GOP is the party of stupid.

BuckeyeSam on February 16, 2012 at 11:08 AM

That is unfair.

To stupid people.

angryed on February 16, 2012 at 2:43 PM

We really need to quit with the $40 per week. The deal is a 2% reduction in FICA. For that to come to $40 per week you have to make $2000 per week – over $100k per year. Obummer is trying to make this sound like more than it is by saying $40 per paycheck assuming checks every 2 weeks. He assumed, correctly, that it would be mis-interpreted and it would sound like more than it is.

FoByFo on February 16, 2012 at 1:02 PM

Exactly. You need to be making at least $106,800 to save $40 per week. Avg salary in the US is closer to $50k/yr, which equals closer to $20 per week.

Personally, I’m glad they passed this again – the sooner we put a stake thru the heart of SS, the better. Unfortunately, they laid it on the backs of new mortgagees.

mdenis39 on February 16, 2012 at 3:14 PM

Never underover-estimate the intelligence of 52% of Americans.

If this is a reference to the 2008 election, at least get the % correct.

As for people whining about the Social Security trust fund…stop. Makes you look foolish. There is no trust fund. It currently has zero dollars in it. The payroll tax is just another tax like the income tax. Cutting it is a good idea on principle.

AngusMc on February 16, 2012 at 3:38 PM

As for people whining about the Social Security trust fund…stop. Makes you look foolish. There is no trust fund. It currently has zero dollars in it. The payroll tax is just another tax like the income tax. Cutting it is a good idea on principle.

AngusMc on February 16, 2012 at 3:38 PM

Yes and no.

Yes, there is no trust fund. But SS isn’t just another tax. It is a tax that 100% of workers pay. Contrast that with regular income tax that only 53% of workers pay.

Everyone has skin in the game with regards to SS. Even if technically SS tax is no different than other income tax, at least everyone feels like they are part of SS. The goal of Obama is to do just what you suggest, make SS a welfare program that is paid for by only a few yet benefits everyone.

Right now if everyone’s paying 6.2% into SS, they have an interest in what happens, how SS is funded, etc. If SS tax is merged into general income tax, 53% (or more) will end up paying nothing and therefore won’t care about solvency because it’s not their problem, after all all you have to do is increase taxes on the rich and SS will be fine, right?

angryed on February 16, 2012 at 3:52 PM

RINO republicans are the true enemies of this country! They spout conservative talk to get elected, then switch back to RINO once in office. RINO’s are in bed with obama and the demorat party. We are doomed as a nation if this is allowed to continue………

vietvet68 on February 16, 2012 at 4:15 PM

When it comes to protecting their fat, hairy, gold-plated asses both parties have an amazing ability to find common ground. This is an election year so the Congressional Howler Monkeys managed to come together in a pact of mutual protection from the unwashed hoi polloi pounding on the castle gates.

My dream is that the day will come when every single one of these jackwagons is running for their lives from an enormous mob of enraged Americans, scrambling toward the last evacuation helo. I want to see them scratching and clawing at one another to gain one of the few available seats while the unlucky are pulled screaming back into the crowd.

Bishop on February 16, 2012 at 11:11 AM

Those that don’t make it on the helicopter…we get to tar and feather!

KOOLAID2 on February 16, 2012 at 5:41 PM

The extra $20 a week average ended up providing such a big stimulus that most people never even noticed it, and the American economy growth rate managed to drop from 2010 to 2011.

For those of you that still believe Oboobi when he says the SS payroll cut “averages” out to $40/semi-monthly, you’ve been had.

To get to that $40, you have to earn $49K. For all the folks that could use the break would be the low incomers. If you make $10/hr full-time, that equates to a $0.20/hr savings. IOW, in one week, you only get an extra $8/week. You won’t even see $40/month until you make $12.50/hr. And these are the people voting for Oboobi for saving them $40 every two weeks, even tho they can’t figure out where that $40 went.

But that’s OK, I still won’t vote for him as I pocket $178/month. And if they cut taxes from the employer side, I’ll gladly take that as well since I’m self-employed. 8)

Hopefully, the SS system will break sooner than later. It doesn’t need reform, it needs to be retired (phased out by the time the last of the 55 and over are dead and gone. The only thing that people should depend on is their own PSA.

AH_C on February 16, 2012 at 6:41 PM

We really need to quit with the $40 per week. The deal is a 2% reduction in FICA. For that to come to $40 per week you have to make $2000 per week – over $100k per year. Obummer is trying to make this sound like more than it is by saying $40 per paycheck assuming checks every 2 weeks. He assumed, correctly, that it would be mis-interpreted and it would sound like more than it is.

FoByFo on February 16, 2012 at 1:02 PM

Just for clarification, it is not 2% reduction in the FICA rate, but 2% taken off the 7.4% rate. IOW, it’s 2% off the gross salary up to $106,800 ceiling. For 2012, the ceiling was raised to $110,100.

http://biztaxlaw.about.com/od/glossarys/g/socialsecmax.htm

For 2011, you are right about having to make $2K+/wk. If Oboobi was actually out there saying it’s $40/week, that’s because the idiot was looking at his own paystub.

AH_C on February 16, 2012 at 6:49 PM

Do you really want to start arguing against the economic benefits of putting more cash into employee’s wallets, especially for the significant number who don’t have much discretionary spending power?

bayam on February 16, 2012 at 12:58 PM

So tell us how an extra 30 cents/hr working out for you? Keeping up with inflation? Wait till this Summer when prices will necessarily skyrocket.

Thank you Mr. President /crr6

AH_C on February 16, 2012 at 6:52 PM

I put mine in a savings account—which may help us get through the gas spike, since I can’t afford an Obama car (even with the gov $10,000 subsidy) and I live in an area that requires gas to get to work so I can pay for the roof over my devalued house and food approved by the government food police.

Why or why aren’t the Republican candidates TALKING about reality here? Gas prices will affect the price of food from the farm to the store. Gas prices will affect all torist industries. Gas prices will affect restaurants. Gas prices will mean people will freeze and old people will die in the summer heat.

Why aren’t Republicans running commercials with REAL people describing real budgeting problems and REAL children who can’t earn enough money to pay for rent and food and gas and insurance without a subsidy from their parents? Why aren’t they talking to REAL people who don’t know even one unemployed person who has found a decent job in the last two years. Not a one. And I live in the so-called “protected” area.

Portia46 on February 17, 2012 at 11:42 AM