As families across the nation prepare for time with loved ones at Christmas and throughout the holiday season, the President and Congress find themselves entangled in another mess. At issue is how to extend the payroll tax cut that was in place in 2011.
The U.S. Senate has approved a two-month extension, while Speaker of the House John Boehner and many members of the House would rather craft a one-year extension. Meanwhile, the current impasse has re-ignited a Washington blame game that we've all become much too familiar with this year.
Missing from the debate and political gamesmanship is a serious look at the mechanics of the proposed payroll tax extension and its potentially harmful effects on the stability of Social Security. Frankly, I am astonished at the lack of media attention given to this issue, giving the program's critical importance to so many Americans and its current fiscal challenges.
Payroll contributions are Social Security's traditional source of funding. A portion of an employee's paycheck is deducted to set aside money for the pension program available to all Americans at the end of their working careers. A reduction in the payroll contribution creates the need for Social Security to find funding elsewhere, subjecting the program to a general budgeting process in Washington that in recent years has been dysfunctional at best.
I have serious concerns about this seismic shift, undoing 75 years of public policy. I voted against the House bill to extend the deduction for another year for this reason. It was not an easy decision. I do not wish to see taxes increase for hardworking Americans, but I cannot in good conscience subject Social Security to the annual political budget process in Washington. Unhinging Social Security from the stabilizing funding stream of the payroll contribution will create longer-term vulnerabilities for the program, which already faces stiff challenges due to our nation's massive debt. A few national publications have voiced this concern. You can click here to view the Chicago Tribune's editorial, "Stop Cheating Social Security with payroll tax-cut."
There are other ways to provide tax relief to hardworking Americans. While I would prefer significant tax reform that removes complexities and loopholes available to those with an army of accountants and lawyers, making it possible to potentially lower rates, it would also be possible to offer tax rebates and credits to help during these difficult economic times. These options would be much preferable to altering payroll contributions to Social Security.
Washington must come to grips with its spending problem, and risk-taking with Social Security is not a step in the right direction. To help stabilize the nation's finances and improve the economy, we as lawmakers have a responsibility to take a longer view of policy changes, the effects of which will endure well after the next election season.