A week ago, the payroll tax cut looked to be in pretty big trouble. A half-hour ago, the policy passed both chambers and headed for the White House.
Congress passed a $150 billion economic package Friday, extending for the rest of the year a payroll tax holiday for 160 million workers and unemployment benefits for millions of others.
On a 293-132 vote, a bipartisan House coalition supported the compromise plan to keep giving workers a small amount of extra cash with each paycheck while also providing a continued cushion for the unemployed.
Shortly afterward, the Senate voted 60 to 36 to approve the plan, which now goes to President Obama to be signed into law.
Here's the roll call for the 293-132 vote in the House. Note that 91 House Republicans broke ranks to oppose the bill -- that sounds like a lot, but it was fewer than expected -- while 41 House Democrats also rejected the agreement. It produced an unusual final tally: of the 293 "yea" votes, Dems narrowly outnumbered Republicans, 147 to 146.
It will almost certainly be the only major bill in this Congress that passes the GOP-led House with more Democratic votes than Republican votes. It also sends an unforeseen message to the GOP's far-right rank-and-file members: once in a while, when Boehner, Cantor & Co. really want something, they're prepared to rely on Dems, even if Tea Partiers don't like it.
The Senate vote proved to be even more interesting. Republican leaders knew the package had to pass today, but as of this morning, it looked like 60 votes were not yet in place. (Because the GOP filibusters literally every measure of any significance, it is no longer possible to pass legislation with "only" a majority of the Senate.)
So, Senate Republican leaders make a curious announcement mid-morning: there would be no filibuster of the payroll deal. The GOP opposed the package, but not enough to deny it an up-or-down vote.
In the end, it didn't matter -- it passed with 60 votes anyway. When the gavel came down, 30 Republicans and 6 Democrats opposed the bill.
President Obama will sign the package into law.
As for what's in the bill, here's a refresher for those just joining us:
* Payroll tax cut: The deal extends a 2% cut to the Social Security payroll tax, at a cost of about $100 billion, giving the typical American worker roughly $1,000 more in take-home pay this year. How will this be paid for? It won't be -- GOP leaders, in a concession that made the larger deal possible, agreed this week that the cost of the cut need not be offset at all. (An equivalent to the amount that would have been received from the payroll tax will be transferred into the Social Security trust fund from the general fund.)
* UI and the "doc fix": The other two major elements of the larger package were also approved, including an extension of unemployment benefits. As part of the compromise, however, Republicans were able to reduce maximum eligibility from 99 weeks to 73 weeks.
* Financing: To pay for the non-payroll provisions, lawmakers agreed to sell radio spectrum licenses, as well as forcing new federal workers to pay more into their government pensions. Dems gave up on the millionaire/billionaire surtax fairly early in the process.
* Extraneous measures: Republicans wanted new education requirements for beneficiaries, but didn't get them. The GOP is not leaving completely empty-handed, though -- states will be allowed to conduct drug tests on those who lost their jobs for failing a drug test (states can already do this) and must prevent welfare aid from being spent at casinos, liquor stores, or strip clubs (states have already done this).
Cutting through the clutter, the bottom line is pretty straightforward: Democrats and economists didn't want the economy to take a hit from an expiring payroll break, and once Republicans caved on the key point, a deal came together.
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Congratulations, we just successfully defunded Social Security by tens of billions of dollars.
read it again, idiot. the social security trust fund will still receive the full amount of money.
(An equivalent to the amount that would have been received from the payroll tax will be transferred into the Social Security trust fund from the general fund.)
Just to play along -you do know that social security is not part of the general fund right?You do realize SSI has a separate "premium" as you could see if you recieved a W-2.
You also do know that the population growth is rebounding which of course means more workers will be paying into the fund as the next generation ages towards retirement.
You do know what happened to 401s during the recent meltdown. You do know...Sorry I forgot it was you.
Oh my you got double barreled on this one.
I'm sure this post will be deleted by MSNBC and ban this person for a day due to conduct rules being broken. (believe it when I see it)
Nnnnnnnooooo.....As was pointed out above, "An equivalent to the amount that would have been received from the payroll tax will be transferred into the Social Security trust fund from the general fund." So. Social Security NOT defunded by tens of billions of dollars.
Now, there are plenty of ways to make up that payout from the general fund. A millionaire tax, for example. Repealing the Bush tax cuts, for another. Personally, I'm working on a government patent for a machine that converts concern trolling to electricity. So, thanks; you just saved Social Security!
(An equivalent to the amount that would have been received from the payroll tax will be transferred into the Social Security trust fund from the general fund.)
Just Bill, Steve and Brooklyn, That transfer is a joke. Remember the general fund already has Trillions in IOUs to the "trust fund" (what a joke that term is in this case). So do you really think the "transfer" will not be nothing more than another IOU? Granted it looks good on paper....and that's all it is - another paper IOU. Talk about drinking the Kool Aid.
And again anyone that does not follow lock step with everyone else here is a troll. How all encompassing the progressive mind is - "agree with me or we will call you a name".
Well Skippy, since I already addressed your concern about repaying the IOUs' from general fund (by, for example, rolling back the Bush tax cuts on top earners), and on top of ignoring that you accuse US of "drinking the Kool Aid," not to mention your snarky disdain for the "how all encompassing the progressive mind is," I'd say it follows pretty lock step that you, sir, are a troll. And not even a concern troll. Just a run of the mill conservative troll.
At least RobDon couched his one-liner with a fig leaf of concern for Social Security. Choosing the rightwing frame that the Payroll Tax Cut Will Kill Your Social Security gave him away, but you....You'se jest a troll, son. Not because you disagree with me, but because you use a false and easily debunked argument to do so.
Brooky,
Yes you addressed how hypothetically you would repay the tax cut, but that is not what happened now is it. They are just going to reduce the general fund - which is so rich in surplus cash :). I am not a conservative. I have voted third party in every election since 1976 and if you think calling someone a name like some grade schooler is a good comeback, then there really isn't much to talk about. Brooky son IF they did one of the options you pointed out (which I do like by the way) it would be another story. But they did not bring in any more $$ for this cut, so it is a moot point.
Oh and please explain how my argument is false. They did NOT take in extra cash for this cut - they just moved money from one pocket to another. And the one pocket they took the cash from has a 16 Trillion dollar hole in it.
A) I don't want anyone banned on my account. I'm a "big boy" and can take name calling. My feelings are not hurt easily. I think it weakens their argument, which in this case, is already non-existence.
B) From where will it be transferred? We have no money. We are trillions of dollars in debt. It is a bookkeeping gimmick. They are going to write and IOU on borrowed money.
HERE'S THE CHALLENGE: Please tell me where the $100 billion dollars is going to come from if it is just a simple "transfer." My bet is, you can not provide any evidence where it will come from or that it is even projected to be there.
See comment #4.2 for quotes from a Democrat Senator who agrees with the idiot.
Great quote from Harkin RobDon. I'm sure he will be called a troll here :-).
I especially like this line from Harkin's speech:
But he said now that Congress was going to pay for this cut with borrowed money from the general treasury funds, the best argument of the program's defenders was gone.
"With this bill, we can no longer say that. We can no longer say that Social Security doesn't contribute to the deficit," Harkin said.
Skip, I realize we are in the minority here. I'm hard headed at times. Not a very good communicator of my positions at times. And lots of other faults.
But it seems the vast majority of folks here only want to hear from those with whom they agree. They don't want to defend their position. They don't want to entertain an opposing view.
I like my ideas and beliefs to be challenged. I like a good strong conversation. There have been many things here that makes me look at things from a different perspective.
While there are some here who are very open and willing to the opposing view. Most are very dismissive. It seems they would rather pat each other on the back than deal with the possibility they may be mistaken. Or at least that has been my experience.
Skippy - As I said from the beginning, " there are plenty of ways to make up that payout from the general fund." And no, they did not make a provision for that right now. But using that as a foundation for claiming that they blew a hole in SS or can't repay it from the general fund is just foolish. It can be easily remedied (which, if you really did like the options I mentioned so much, you must have known already), which makes complaining about SS being defunded and the state of the general fund inherently dishonest. Or at least seriously uninformed. And while you may claim to not be a conservative, I've read your previous comments on other threads, and your disdain for Democrats and liberals is pretty clear, so.....to me, troll is as troll does. Given your positions and your pride over having voted for 3rd party candidates for almost 4 decades, I'm going to guess you're of the Libertarian variety?
RonDon - ignoring what I said in response to you does not make what I said cease to exist. Let's put aside for the moment that the US can borrow money right now with practically no interest whatsoever, making this THE ideal time to borrow. Jusrt ignore that for the sake of this dumb argument. Where will the money come from? Increased revenue. How do we increase revenue? Create jobs, even with government funds, which will pump more money into the economy, which will enable people to spend, which will bring in more revenue. Also, raising taxes on the historically low upper tax brackets increases revenue. For example, the Joint Committee on Taxation estimated that the "Buffett Rule" would raise anywhere from $400 - $500+ billion. Asked* and answered.
*I'm going to assume you weren't thinking the $100 billion was going to come out of the SS fund in one huge lump sum - and therefore have to be repaid all at once - because that would be bloody stupid.
My experience too RobDon. I do enjoy it when there is intelligent debate here. It does seem some here get very defensive when their point of view gets challenged.
Brooky,
I have voted Libertarian, Green and Citizens Party. I tend to be fiscally conservative and very liberal socially. I guess that would fall into the Libertarian grouping, but I am not a full blown Libertarian like that space cadet Ron Paul. And just because I may not agree with some progressive ideas, that does not mean I "disdain" them. Why would you want to only have people at this blog in agreement the vast majority of the time? A little spirited debate helps bring out all aspects of a topic. Otherwise this site will just become a cheerleading rally. At the pace that government works, surely you must know that this tax cut will go unfunded. I highly doubt that there are meetings or committees set up to discuss this bill any further. It is a done deal and it is unfunded. Yes it would be great if the taxed millionaires to pay for it or rolled back the Bush cuts, but you know it will not happen.
And if you call me a troll one more time, I will meet you by the swings after school :-).
Brooklyn Michael, I did not mean to ignore you. I thought you dismissed my statement.
Sense a Democratic Senator agreed with me I thought I was on fairly solid ground. But, let's put that aside.
Lets assume all your suggestions for making up the borrowed money are valid. Why not go ahead and put one in play? Why not say, "we are cutting 100 billion from SS revenue and we will compensate for it in this manner." Why not do that now instead of just listing hypothetical ways we "could" make up the difference? Why not make a commitment and a plan instead of having a few ideas and a wish? I don't understand the logic?
Speaking of patting each other on the back....
Look, you both made an overly simplistic, not fully-thought-out argument. As for Harkin, as much as I admire him, raising the payroll tax right now is not a good idea. Would I rather have had a way to pay for it (like the Buffett Rule) right now? Of course. That doesn't mean going all Chicken Little and adopting a rightwing frame is a good idea. If either of you had attempted a reasonably intelligent debate of opposing viewpoints - i.e. offering a way to repay the revenue instead of merely blasting this as "defund(ing) Social Security by tens of billions of dollars" - then we could have that talk. But ya didn't. One could say you (especially you, Skip) got defensive when your point of view was challenged.
Also too, Harkin's memory must be going, because this is not the first time surplus Social Security money has been borrowed and paid back with other revenue.
Harkin was proposing giving the same cut though another vehicle other than pulling SS revenue to do it. So, this is a false argument, your implication that the only way to allow the tax payer to keep $1,000 a year was through the SS tax.
I was only stating fact, albeit with an asterisk (*money will be replaced with borrowed money).
There were many who did not want to vote on the tax cut until an agreeable way to pay for it was in place. Are you now saying you are in agreement with them?
Well now, boys, THIS is more like it....
Skip - I'll temporarily retract my "disdainful" characterization of you. But we clearly have different levels of faith in government. You say you:
No - I don't know that. Both issues will come up in a year's time. The Bush tax cuts expire this year. We will likely hear about both of them multiple times between now and the election. I'm sympathetic to your aversion to robbing Peter to pay Paul, but until the economy is on more solid ground, I'd rather do that than give a sharp increase to a regressive tax, you tro....just kidding. ;-)
RonDon - Normally, agreeing with Sen. Harkin isn't a bad idea, but in this case, as I pointed out above, I think he's off the mark. I would point out that the Buffett Rule was proposed by Democrats as a way to fully fund the payroll tax cut extension, but Republicans flat out rejected it, and with the new GOP-imposed status quo of needing 60 votes to get anything through the Senate, that idea died. That was all pretty well covered in the news. Republicans wanted to pay for it by cutting (more) spending aimed at the lower and middle class, but that was a non-starter, and they knew they'd get hammered if the extension failed because of them. Now, I fully expect all of that - the payroll tax cut, the Buffett Rule and the GOP obstruction - to be a fairly major part of the summer and fall campaigns.
That doesn't mean going all Chicken Little and adopting a rightwing frame is a good idea. If either of you had attempted a reasonably intelligent debate of opposing viewpoints - i.e. offering a way to repay the revenue instead of merely blasting this as "defund(ing) Social Security by tens of billions of dollars" - then we could have that talk.
Brooklyn,
It is all good and fine to discuss ways to pay for it. But RobDon's original post and my responses were about what actually happened - not what if's. And we did have a small talk about your proposed ways to pay for it, but they are only your opinion(and mine since I agree with you). Do you honestly believe that they will revisit this specific cut and fund it after it takes effect? Highly doubtful. And all RobDon and I pointed out was the fact - not opinion or theory - that it passed with out a means to fund it. How you equate stating what actually happened with this bill a "rightwing framework" is a mystery to me. How was my point of view - that the bill was passed without funding (new revenues, not moved from the general fund) challenged? If it WAS funded, then yes, my view would be challanged. But is was not really funded. Moving money from the general fund which is operating on a deficit is not funding. The $100 Billion the general fund will transfer to SS will have to be borrowed.
Brooklyn,
I posted 1.20 above before I saw your last post. And I will agree to disagree on the finer points of the bill. And I DO hope you are right that the may revisit the funding aspect of this tax holiday. I do not have as much faith but.....:-).
Somehow, comment #2 (and it's sub-comments) got detached from this thread - Gah!
The 'Buffet Rule' is one possible answer, another would be to combine 'Earned Income' and 'Capital Gains' together to determine a person's Tax Bracket, and give everyone a 10% 'Investment Incentive' on the Capitol Gains portion - ie, if your Tax Bracket is 25%, you pay 25% on your Earned Income, and 10% less, or 15%, on your Capital Gains (Investment Income); If your Tax Bracket is 35%, you pay 35% on your Earned income, and 10% less, or 25%, on your Capital Gains (Investment Income). A 10% Tax Break on Capital Gains would still give people a major incentive to Invest their money, but would help to 'Equalize' tax rates, making them more equitable, and ensuring the the 'Very Wealthy' don't wind up paying so much less in taxes than the 'Average Taxpayer'.
Often, 'Small Businesses' actually only consist of Mr. and Mrs. 'Got-Bucks', their Lawyers, Accountants, and Investment Managers, all duly incorporated, for the sole purpose of reducing their Tax Liability and protecting assets - Which is not what most people think of, when they hear about "Small Businesses being hurt by these policies".
The more I read about the Social Security Trust Fund, and the US Budget in general, the more it seems like a 'Three Card Monty' scam:
"Try to keep your eyes on the cards, ladies and gentleman!" - HA!
This question is for Congress and the President: "Would you give a gift to a friend that cannot afford it and use their credit card to pay?" Isn't this basically what the government is doing?
Think about it, where do the billionaires (including Buffet) and corporations get their money? Selling goods and services to consumers? Consumers = Middle Class (Average American Taxpayer, you and me).
Now what do companies do with higher costs, especially when it's industry wide to all competition? Let's see, do they absorb the expense and decrease their bottom profit line? no..... Oh! They pass it on to the consumer in the form of increased prices!
Truth is: Any time the government gives away something "free", spends money it doesn't have, reduces contributions to our Social Security program, increases taxes on anyone, or implements tougher, expensive regulations, the bulk of the burden will be realized by the Middle Class 100% of the time.
This is YOUR money and future they are talking about! Wake up and fight for a better tomorrow!
RonDon,
Like the Republicans truly care about Social Security. If there was the concern, remove the upper income limit. It would cover the shortfall and MORE.
I'm curious if anyone knows the actual rules of the Senate. Mark Kirk, one of the Senators from Illinois, won't be back in the Senate for some time because of his stroke.
So is the rule 60 votes, or is it based on the number of bodies in the Senate at the time of the vote?
Shhh he must be in dreamland.
@Dogjudge,
Back in the "good old days" before rampant obstructionists and ideologues took over it used to be just "a simple majority" of the Senate that had to vote yea or nay! In today's world the reich demands no less than a 60 count to be the "majority".....Kinda like 98% of Catholic women take "birth control" - yet the Bishops & clergy of the church spoke before Congress (Issa specifically) to oppose it!
And only nine of them!
@RonDon - If you're really worried about the Social Security Trust Fund, either Totally Eliminate the "Social Security Wage Base", currently $110,100 (scheduled for 2012), or at least raise it to $250,000. Right now, a person earning $100 Million a year pays the same Social Security Taxes as someone earning $110,100 - NO Social Security taxes are collected on any earnings over that cut-off amount.
Also, Social Security Benefits should be Means Tested - I'm sorry, someone with assets over $1 Million (excepting the value of their primary residence), or receiving over $250,000 per year in other income (retirement pay, investment income, etc), should NOT be receiving a Social Security check; It's Insurance (OASDI = Old-Age, Survivors, and Disability INSURANCE). As an example, Ronald Reagan was receiving retirement pay as a former President of the Screen Actors Guild, retirement pay as a former Governor of California, over $100,000 per year retirement as a former President of the US, plus as much as $1 Million per speech, income from writing his autobiography and other books, investments, etc - He was a multimillionaire, and I do not begrudge him for that, but he (and Nancy) also received a Social Security Insurance check every month, which IS ridiculous! Warren Buffet, Bill Gates, Larry Ellison, Michael Dell, the Koch Brothers, Steve Ballmer, Carl Icahn, the family of Sam Walton family (Wal-Mart founder), etc, all Multi-BILLIONAIRES - Should they all be 'Entitled' to receive Social Security Insurance benefit checks?
The US Supreme Court has already ruled that it is NOT an 'Entitlement':
Also. since most of the Social Security Trust Fund is invested in US Bonds, the recent downgrading of our 'Credit Rating', brought on at least partially by Republican intransigence, did a great deal of harm to it!
My numbers may need 'tweaking', but 'fixing' the Social Security System to ensure it's long-term sustainability would be fairly simple, and easy to achieve.
Steve, when I went to the Senate website and counted Democrats voting 'no," I only found five. One Democrat was recorded as "not voting."
Which Democrats voted "NO?"
Cardin (MD), Harkin (IA), Mandin (WV), Mikulski (MD), Warner (VA), and Bernie Sanders (VT) who caucuses with the Democrats, but is an Independent.
Here are some quotes from one of those Democrats who agrees with my first post, for which I've been deemed an idiot.
source: http://www.huffingtonpost.com/2012/02/17/payroll-tax-cut-tom-harkin_n_1284334.html
Thank you for this tid bit. It may even cause some rethink on my part. It could be we once more have given the republicans too much for too little. Oh well maybe when the obstructionists are voted out of office this will be revised.