Democrats Insisting Deficit Reduction Package Include New Spending And Continued Raid On Social Security

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Sometimes you get the feeling that “deficit reduction” really isn’t the goal for some of these people. Because if you’re trying to cut down on the gap between what the government spends and what the government gets in revenues, enacting spending is the last thing you’d want to do.

Unless you’re Democrats, it seems.

Senate Democrats, feeling confident from their net gain of two seats in last week’s election, say any deficit-reduction package negotiated in the coming weeks must include stimulus measures.

They have yet to decide which prime-the-pump measures to push, but are mulling options such as new infrastructure spending and an extension of the payroll tax holiday.

The extension of the payroll tax holiday would be particularly bad policy. It’s a 2% reduction in Social Security taxes. That’s a tiny amount of tax relief, and given the tax holiday’s temporary basis, the “stimulus” impact is almost non-existent.

People don’t change their economic behavior based on a tiny, temporary tax break.

Not to mention the fact that this represents a reduction in Social Security revenues. I’m no great lover of that social program, but it’s fiscal reality is clear. Social Security is in deficit, obligated to pay more in revenues than it receives in revenues, and has been for some time. The program has a trust fund, but it consists of nothing but US treasury bonds, meaning every time Social Security dips into the fund the US Treasury must make good on those bonds.

Adding to our overall national debt.

Continuing this “payroll tax holiday” means accelerating Social Security’s collapse for the sake of marginal economic stimulus, at best.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Mike Quinn

    Solving the social security problem is so simple. The rich do not pay a dime of social security tax on any dollar they earn over $110,000. If the original formula for the cap was used they would have to pay up to $180,000. If the rich paid on every dime they earned like everyone else the problem would be solved. The real problem is most of the simple minded Hoopleheads don’t know anything about this cap. Go down the street, grab a Hooplehead. Ask the Hooplehead if he knows the rich don’t have to pay social security tax on anything over 110k. The dolt will look dumbstruck. Social security is the biggest tax break immaginable for the rich. The rich automatically get a 7% and in many cases 14% tax break. The low information gang the Republicans feed on Fox and with Rush are clueless. If you doubt what I am saying interview a dinger today. There is no need to raise the retirement age. This is a problem invented of, by, and for Republicans. Of course good old Rob will bang the drum on this one. I would guess Rob is young enough to get bit in the ass by his own stupidity here. The Republicans want to force Rob to work until he is 70 before he can collect social security. If they succeed, Rob will look back on this day at age 70 and realize how he got take by the very rich he loves.

    • JW -American

      Why should you not have to work to age 70 before you collect? How long do you intend to live?

      What just because you have a 62 or 65th birthday, you get money from a Government that has to borrow it from another country to give it to you?

      SS was and always will be a Ponzi scheme, It cant work, and It will implode.

      Personal wealth, long term investments and acquired assets are what SHOULD carry you though your Golden Years, Retiring at 65 and living well though your 80’s on money derived from the public trough is just another form of Welfare.

      Dont give me this “I’ve payed in my whole working life…BS” Ya, how much? probably enough to pay for 5-10 years of SS, after that its WELFARE! Money taken with the threat of imprisonment for non payment from one to pay another.

      Yet another Socialist Plan, that can never pencil out without extracting more and more from those that work to give to those that don’t.

      Mark my words, 5-10 years from now, the youth in the streets will not be there protesting Big Companies, they will be protesting Healthy, Vacationing Baby Boomers, siphoning off more and more of their hard earned income.

      • http://sayanythingblog.com Rob

        Why should you not have to work to age 70 before you collect?

        That’s the problem with a ponzi scheme, which in the case of Social Security takes the form of a defined-benefits pension plan.

        The only way to keep it afloat is to either keep expanding the number of suckers you have paying in, or start cutting what you pay out to those at the top.

        Raising the retirement age, and messing around with inflation adjustments, are just that. Cutting benefits.

        The only way to address Social Security’s problems is to either take more from citizens, or pay out less. And no matter which you choose, eventually you’ll have the problem again. Because inevitably these schemes always end up in the same place.

        • Mike Quinn

          Are you guys simply afraid to address the issue of making the rich pay social security on every dollar they earn? Why do you avoid this obvious solution?

          • HG

            Because benefits are capped, idiot. Why should they pay for a retirement they will not receive?
            Why not require everyone, including public employees to pay in? Why is it only public employees can opt out?

        • Waski_the_Squirrel

          I want to know why I’m forced to pay into Social Security. I want the freedom to invest that money my way, and the responsibility to take care of myself if my plans fail. The government apparently thinks I’m too stupid to take care of my retirement.

      • Mike Quinn

        When the young figure out that the rich don’t pay in, they will go nuts.

        • HG

          The rich do pay in. Public employees can opt out and more often than not do opt out.
          You’re as stupid as Hannitized.

          • HG

            You may be as stupid as Hannitized, but at least you know when to shut up. Hannitized would double down on stupid. Congratulations.

    • HG

      It’s easier than that. Gov’t employees have their own PERS (public employees retirement system) and opt out of Social Security. Public employment accounts for somewhere around 50% of the labor force.

    • kevindf

      Little Lord Pomeroy and Gaylord Conrad grew up collecting SS checks all the way through the end of college. That’s why it’s broke.

    • Spartacus

      Just tell your congressmen to quit squandering the S.S. coffer on their pet projects.

    • Suzanne D.

      Actually, I would argue that most Republicans already know this. Only actual “wages” have Social Security and Medicare Tax taken out and yes, it is capped at $110,000 for SSI. Removing the caps for both SSI and Medicare would add approximately $248 billion to the party, but since our government currently spends $1.2 trillion more than in takes in, we’re still short about a trillion. Gov. Romney did suggest removing the caps, but realistically, high income earners will get more creative with their pay so as to avoid paying the extra $$. The real “hoopleheads” are those on the left who don’t realize that our economy is not a zero sum game. Every dollar the govt takes removes more than a dollar from our economy. Every dollar invested by the private sector (ie, not taken the govt), adds more than a dollar to our economy.

  • HG

    Did anyone really think democrats of all people would back up their deficit reduction words with action?
    Not me.

    • Mike Quinn

      Obama said he would immediately sign into law tax cuts for those earning under 250k and let the Bush tax cuts expire. That would raise 700 billion. Did you miss the news?

      • HG

        Not at all, but that is only 70b a year for 10 years. That barely makes a dent in the yearly budgeted spending. The deficit and the debt continues to increase drastically.

  • WOOF

    The deficit will be reduced by immigration.
    People are money.

    • HG

      You actually think that illegals are going to sign up to pay taxes when they already get the benefits of citizens without contributing a dime?

      The fact is the national debt is projected by Obama’s own budget figures to increase another 6t over the next ten years with the tax increases he wants. That is too much spending. Democrats aren’t serious about reducing the deficit or the debt.

    • http://ndgoon.blogspot.com Goon

      Wow, that’s a really bright statement.

  • http://ndgoon.blogspot.com Goon

    They want to collapse the system and put in it’s place a socialist utopia. George Soros is the one that is pushing this. Soros owns the democrats.

    • HG

      It’s hard to imagine that, but something isn’t right. This spending makes no sense whatsoever.

      • http://ndgoon.blogspot.com Goon

        They want to redistribute wealth, this is how they keep getting elected.

        • HG

          Keep this up and wealth will continue to diminish. That won’t help redistribution.

          • JustRuss

            Won’t help REdistribution, but will help with equality of distribution….everyone must suffer at the same level.

  • Harold

    Saw the number 1 neurosurgeon in the US on TV today. He said that anyone over 65 won’t get much treatment under Obama care other then end of life counseling. This surgeon by the way was African American. Didn’t elderly vote overwhelmingly for Obama? Democrats can rob Social SEcurity Trust Fund because they know that the care they are going to allow to this group will be inadequate and many elderly over 65 will die from this care they withhold those groups. Hence no need for Social Security so why not take the money out of it that is mean’t for those retiree’s?

  • Harold

    Why do people think $250,000 income a year is a sign a person is rich? With all the money first Bush and now Obama have printed $250,000 isn’t even a good living when you factor in inflation because of the Feds idea that printing dollars with nothing but China backing them makes people rich at $250,000. 20 years ago that might qualify you as being rich but not anymore.

    • JW -American

      20 years ago 250,000 would have bought you 16.6 new 15,000 dollar cars (nice Loaded Taurus or Chevy Impala, type cars) Now those same cars cost 24-35,000 so maybe you could by 7 or 8 of them. No to fill them with gas? big flipping change over 20 years..

  • JustRuss

    This is why I continue to push “Cuts First” over some agreement or combined plan.

    Make the cuts this year, raise taxes next year after we see the results. Every time we raise taxes in exchange for cuts, the cuts never happen.

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