Tag Archives: Payroll tax

Obama May Do Social Security Reform During Lame Duck Session, Senate Democrats Worry

Obama Social Security Reform

Many people realize that President Obama has had to cave in to Republicans on a few issues; for instance in order to get an emergency bill passed for unemployed workers or the  9/11 First Responders Health Care Bill.

However, this time if the POTUS does a quid pro quo with a promise to reform Social Security, the backlash will be loud and clear…

Huffington PostSam Stein

Concern is mounting among some Senate Democrats that President Barack Obama will make a deal with Senate Republicans during the lame-duck session that would result in changes to the benefit structure of Social Security.

One of the most progressive voices in the caucus, Sen. Bernie Sanders (I-VT), said he was heartened to hear Obama tell the AARP last week that he’d be open to raising the cap on income that’s taxed for purposes of paying into the Social Security trust fund. Sanders also applauded the president for taking off of the table any reform language that resulted in the “slashing” of benefits (several Social Security advocates, disagreeing with Sanders, said they were worried such language was counterproductive, as it opens the door for cuts that could be deemed minor).

But the Vermont Independent worried that all of this could be posturing for the lame-duck session immediately after the election, when lawmakers are expected to rush to find another “grand bargain” on tax and entitlement reform to stave off the so-called fiscal cliff.

“That’s exactly what’s going to happen,” Sanders said of Social Security being on the proverbial table, “Unless someone of us stops it — and a number of us are working very hard on this — that’s exactly what will happen. Everything being equal, unless we stop it, what will happen is there will be a quote-unquote grand bargain after the election in which the White House, some Democrats will sit down with Republicans, they will move to a chained CPI.”

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West Wing Week: 2/17/12 or “Go Big!”

The White House

This week, the President made a major announcement on preventive care, unveiled next year’s budget, pushed Congress to extend the payroll tax cut, awarded the National Medals of Arts & Humanities, met with China’s Vice President Xi, and traveled west to Wisconsin and California and the First Lady hit the road to promote her Let’s Move! Initiative.

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Why The GOP’s Payroll Tax Cut Cave Is An Even Bigger Deal Than You Think

TPMDC

The GOP’s accession to reality on the payroll tax cut is being cast as a key victory for Democrats and President Obama. Republicans caved, the payroll tax will almost certainly be renewed, and the economy won’t take a tough hit just as the recovery’s beginning to accelerate.

But it also reveals a flaw — a potentially huge flaw — in the conservative movement’s generational strategy to roll back the federal safety net.

These might sound like two wildly disparate issues, but they’re actually variations on a years-long theme. And the outcome of the payroll tax debacle bodes poorly for the GOP on the rest of their long-run goals.

Here’s why.

For years and years, conservative elites have rested their hopes of shrinking the federal government, including its most popular programs, on the theory that if they just “starve the beast” — keep taxes low until the budget comes under enough strain that those programs have to be slashed — then Democrats will ultimately fold, rather than touch off a fiscal crisis.

Republicans have scrimmaged with this strategy over the past year. The debt limit fight was premised on the Republicans’ threat that they’d put the country’s creditworthiness at risk to force Democrats to agree to spending cuts. And Democrats basically caved.

Fast forward to the end of 2011, Republicans used the looming expiration of the payroll tax cut to demand further cuts to government services.

“There’s no debate about whether these extensions ought to be paid for,” House Speaker John Boehner said in November.  But of course Republicans ruled out financing the payroll cut with a small tax on millionaires, and demanded they be paid for with spending cuts elsewhere in the budget.

When Democrats resisted, that strategy blew up in his face, the payroll tax cut nearly lapsed, and Republicans took a beating with the public.

So with the payroll tax cut set to lapse once again, the entire GOP leadership has backed off the demand that the policy be offset. Democrats weren’t going to let the GOP set the ground rules for that fight. And instead of entertaining the idea of even a small, temporary tax increase on wealthy people, Republican leaders have agreed to finance the payroll tax cut with yet more debt — over the strong objections of their own members.

Tax cuts, and benefit programs are different beasts, and that’s why Republicans have agreed to isolate the payroll holiday from other expiring provisions. But the key is that when Republicans recognized that the public was wise to them — that their tactics were putting a popular policy in jeopardy — they backed off.

The same dynamics govern the longer fight over programs like Medicare and Social Security. At some point in the months and years ahead, when policymakers are forced to weigh cuts and big reforms to those programs against higher taxes on the wealthy, Republicans will stand to own the consequences, if they push revenues off the table.

What Democrats have to do is remember how they won the fight over the payroll tax cut, and stick to the same playbook.

(Ed. Note: Emphasis are mine)

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Obama’s Jobs Speech To Congress – Full Video

The American Jobs Act

President Obama tells a joint session of Congress that it is time to end the political circus and pass the “American Jobs Act”.

“Those of us here tonight can’t solve all of our nation’s woes. Ultimately, our recovery will be driven not by Washington, but by our businesses and our workers. But we can help. We can make a difference. There are steps we can take right now to improve people’s lives.

“I am sending this Congress a plan that you should pass right away. It’s called the American Jobs Act. There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that’s been supported by both Democrats and Republicans — including many who sit here tonight. And everything in this bill will be paid for. Everything.

“The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working. It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and hire, there will be customers for their products and services. You should pass this jobs plan right away. “

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