THE SOCIAL SECURITY TRUST FUND WON’T BE TOUCHED…. One of the unexpected elements of the tax policy deal is a reduction in the Social Security payroll tax, which will give workers another little boost in their paychecks for a couple of years.
There’s been some question about the lost revenue and where it will come from, so it’s worth pausing to clarify matters. Firedoglake’s Jane Hamsher was on PBS’s “Newshour” last night, articulating one of the key concerns about this policy on the left.
“Well, of particular concern to me — all the details haven’t come out tonight — are the 2 percent payroll tax cuts that is essentially being proposed.
“That’s been a Republican idea that they have been pushing for a long time in order to sort of starve the beast of the Social Security trust fund. It means that money will not be coming in to the trust fund, but benefits will still be paid out. Up until now, the trust fund has been solvent and it’s been able to pay out its own benefits.
“But, in this plan, they’re basically trying to reduce the solvency of the trust fund, because they couldn’t get a benefit cut through the Catfood Commission. They’re just not going to stop until they try.”
Jane acknowledged that all the details weren’t yet available when she appeared on the program, and I’m pleased to note that this concern has already been addressed. We learned overnight that “the loss to the Social Security trust fund would be covered by general revenue.”
In other words, the provision, if the deal is approved, won’t undermine Social Security solvency at all. Not one penny of the payroll tax cut would come from the trust fund.
This is not to say the Republican ideal of “starving the beast” is on hold; I don’t doubt that it remains a GOP goal that Democrats are going to have to fight. But when listing legitimate concerns about the tax policy agreement, this one doesn’t make the cut. For those of us looking out for Social Security, that’s good news.