Obama’s Payroll Tax Cut Is A Raid On Social Security

In FY2011, according to the CBO, the Social Security program ran a $46 billion deficit, meaning that the benefits paid out through the program exceeded the taxes (most payroll) paid into the program by that amount. That $46 billion was added to the national debt because the Social Security trust fund is nothing but Treasury bonds.

Every time Social Security dips into its trust fund the US Treasury must make good on those bonds by borrowing from other sources and adding to the debt.

That $46 billion was on top of the $121 billion in Social Security deficits caused by President Obama’s payroll tax cut. That money was also made up by additional borrowing by the US Treasury.

Today, President Obama demanded that we continue a payroll tax cut which reduces the revenues paid into Social Security:

The President actually had the temerity to chide Republicans for opposing this tax cut. While it’s pretty clear that Republicans will, in fact, end up backing some extension of this payroll tax cut, we should all pause for a moment and appreciate just how crazy this policy is.

We’re robbing money from a massive entitlement program that’s already broke to pay for temporary tax relief that has almost no stimulus impact on the economy.

We would be better off doing nothing.

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.

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  • http://www.tarheelred.com/ Pino

    The President actually had the temerity to chide Republicans for
    opposing this tax cut. While it’s pretty clear that Republicans will,
    in fact, end up backing some extension of this payroll tax cut, we should all pause for a moment and appreciate just how crazy this policy is.

    I think the Republicans are off base on this one.  We WANT tax cuts.  We are the party that claims the smaller the burden of government, the better off we all are.  The Democrats wanna shrink FICA.  We HAVE to take that deal.

    Look, I want Obama out of office as badly as everyone.  However, us disagreeing with every. single. policy. of his just ’cause he’s from the other tribe is dangerous.

    • http://ndgoon.blogspot.com Goon

      Raising taxes on the rich under the guise of giving people a FICA tax break is just another ploy to have the different classes at each other’s throats.

      • http://www.tarheelred.com/ Pino

        Raising taxes on the rich under the guise of giving people a
        FICA tax break is just another ploy to have the different classes at
        each other’s throats.

        Oh, THAT I agree with.

        I’m just saying that we want less burden of government.  And we should take it when we can get it.

      • http://nofreelunch.areavoices.com/ Kevin Flanagan

        Their real plan is to fund SS and Medicare from general revenues because government trust funds don’t exist. 

    • Cherz1967

      You are missing the point.  Obama is putting forth ideas he knows the Repbulicans will bristle against so he can claim they are doing nothing.  It is his only hope.  The nice thing is that only the drones and idiots who would vote for him anyway will believe it.  The rest of us see him for the rat he is.

  • $8194357

    His outrage must be because he thinks it would be raiding a Democrat slush fund…
    I thought we had the debt covered according to previous Democratic propaganda…You mean the money isnt there and Bernie Madoff has to get more folks on board to pay the ones he previously took money from? No..The beloved party that hangs it hat on being the “protector” of women, minorities,the working class and the elderly wouldn’t “lie” about SS being “BROKE”. would they?

  • sbark

    Isnt Obama basically trying to throw old people out on the street?  Let them starve?

    He is cutting the one funding item to this mystically SS Lock box the Left says is still there….FICA tax…..so there for he is defunding SS pure and simple…..

    he can talk all he wants to about tax on the super rich to funds these cuts…….but he has no intention of replacing the lost “ss lock box” money with the rich tax collected…….

    he is defunding SS but with plausible deniability……..or is he just in a hurry to have SS create a economic crisis within this election cycle?

    • $8194357

      The correct answer?…All of the above for 1000?

      • sbark

        the left is as predictable as an old milk cow coming home every nite…..like clockwork…….everything they do is plaugerized from the likes of K.Marx

  • Hal397

    Obamacare also cut $500 Billion from Medicare and increased taxes on prescription drugs and medical devices.

  • Thresherman

    Well, we all know that this is political posturing in order keep in step with their central theme of a do nothing GOP congress, never mind that the GOP is out number 2 to 1.  But the question should be, why do they want control of political leadership if they do not want to lead when they have it?

  • Lmlucier

    Rob’s piece is spot on. The SS trust fund needs to stand on it’s own. It is theoretically off budget.It is technically not a tax but insurance. That is why you cannot deduct it from your Income tax. Yet we pay taxes on 85% of the insurance when paid. That thanks to Dems. We should not be taxed on our FICA contribution if it is indeed already a tax.

  • http://nofreelunch.areavoices.com/ Kevin Flanagan

    Why does the ND media monopoly want to put Nanaw’s and Pappaw’s SS check at risk?
    “LEAFY SPURGE: To members of Congress on both sides of the political aisle who thus far have been unable to find a compromise in order to extend a payroll tax cut. The tax break will expire at the end of the year if Congress does not act, and that will cost the average American family about $1,000. The president wants to modify the cut so the savings would be about $1,500, but he wants to tax wealthy Americans to pay for it. Republicans in Congress want to extend the payroll tax cut, but they want to pay for it by cutting the federal payroll and some federal programs. The impasse was in the spotlight last week when the Senate rejected both Republican and Democratic versions of the extension. The value of the tax break to individuals, families and the overall economy is not in dispute. Yet, the representatives of the American people, who overwhelmingly like the payroll tax cut, can’t seem to get their act together. It is no wonder Congress has an approval rating of only 9 percent.”

  • 2hotel9

    “Obama’s Payroll Tax Cut Is A Raid On Social Security”  Yes, exactly, and as soon as Republicans vote for it he will screech effeminately that Republicans are raiding Social Security in order to give tax cuts to millionaires. Bet your a$$ on it, the speeches are already in the teleprompter.

  • Jimmy_Wildcat

    I thought tax cuts increased tax revenue? I’m confused.

    • http://sayanything.flywheelsites.com Rob

      It does, depending on the situation. Tax cuts don’t always increase revenue, but they don’t always reduce revenue either.

    • JustRuss

      Income tax cuts including capitol gains taxes do. FICA is the only source of income for SS, if you remove or reduce FICA you must find other sources of income. The Rich don’t really care either way about FICA because it is a small percentage of their total tax burden. FICA is the most regressive tax in the US hitting the poor and middle class where it hurts the most. But it is not FAIR to force the “rich” to pay for social security and require those people to pay nothing.

      Anyone who does call that fair is living in self delusion supported by indoctrination.

  • Jimmy_Wildcat

    To clarify, SS is paid from a specific SS tax.
    However, the tax savings are then reinvested in the economy, we see 30% growth in GDP, everyone’s salaries go up, and we ride pink unicorns to our pots of gold at the end of the tax cut rainbow…
    Because that’s how tax cuts work. Reagan said so.

    • Cherz1967

      Really Jimmy?  How uninformed are you.  Reagan said give tax cuts to the rich and they will invest their savings causing economic growth.  That is Reaganomics.  Obama says, take money from an already broke system and give it to people a couple dollars at a time so it has NO impact on the economy.  You’ll be wise to remember the tax cut has been in place for a year.  Wow look at all the growth.

      I knew Rob would get at least one liberal jack ass to defend Obama and write some bullshit about this post.
      Great job Rob.

    • http://sayanything.flywheelsites.com Rob

      Well, that’s certainly how liberals characterize Reagan’s position on tax cuts.

  • sbark

    Junk the Idea SS is a Insurance……..nothing further from it.   It is simply generational theft.

    With a Ins product when you purchase it you buy a specfic amount of potential loss…ie a 100k life Ins. policy.   Up thru the 70’s most of present retiries paid in a maximum of 600.00 PER YEAR to SS on their Tax return…………many now, after 40 SS pymt hikes get 200% of that per month.   Unsustainable,  but has bought many votes over the decades.

    Is it then a investment?……many reitires of that era are seeing a 2000% return on their money.  Typically a investment with that return would have risk attached to it………no so with SS…..the only risk is to future generations who already of 50 trillion of unfunded committments to their name without yet leaving high school.

    So what is it then?………its simply another item on the list of 100% dem’cat failures in social engineering……