Congressman DeFazio: The tax deal "is a raw deal for seniors, taxpayers and working men and women"

[Better Believe It]

DEFAZIO SAYS PAYROLL TAX HOLIDAY WOULD TURN NEW DEAL INTO RAW DEAL
WASHINGTON, DC –

Rep. Peter DeFazio (D-Ore.) today participated in a press conference with Max Richtman, Executive Vice President of the National Committee to Preserve Social Security and Medicare (NCPSSM), and other members of Congress to warn that the Senate passed tax cut deal will jeopardize the bedrock of U.S. retirement: the Social Security program. The Senate passed tax cut package would divert $112 billion from the Social Security Trust Fund, with a reduction in the FICA tax under the guise of providing economic stimulus and creating jobs. However, the bill also mandates that the government borrow $112 billion, much of it would likely come from China, to payback the Trust Fund. This sets a dangerous precedent that opens Social Security up to attacks from those seeking to dismantle or privatize it, and is not the type of investment that will create jobs or put people back to work.

The following is DeFazio’s statement at today’s press conference.

“Today, the U.S. Senate voted to endorse the deal cut by President Obama and the Senate Republican Leader Mitch McConnell, I think it’s a bad deal. It will add $858 billion to our deficit over the next two years. This is done under the premise that these sorts of tax cuts, trickle down tax cuts -- on estates over $10 million, incomes over $250,000, and 100% expensing for wealthy corporations who are sitting on huge piles of cash -- are necessary to put Americans back to work. I think we could have taken many more effective measures at much less cost to put Americans back to work.

But, one of the worst aspects of this bill is that it will take $112 billion from the Social Security Trust Fund and require that we borrow money, probably from China, to replace that money to make Social Security whole. It’s the first time in 75 years, since President Roosevelt created Social Security that opponents of the program are poised to undo the New Deal and turn it into a raw deal for America’s seniors, the taxpayers and working men and women. At the end of 2011, the Republicans will insist on extending the payroll tax holiday because the expiration of the holiday would increase taxes on working people. And to pay for the extension, it’s likely they will demand cuts in Social Security benefits.

That’s not the kind of security the American people who are dependent upon Social Security, or who will be dependent upon Social Security, need. This is a raw deal for seniors, taxpayers and working men and women. This bill sets a dangerous precedent and I will oppose it."

http://www.defazio.house.gov/index.php?option=com_content&task=view&id=650


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THE NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY & MEDICARE
~ Trusted ~ Independent ~ Effective ~

December 15, 2010

NEWS RELEASE
Reps. Doggett, Chu, DeFazio, Deutch, Holt, and the
National Committee to Preserve Social Security and Medicare Call Payroll Tax Holiday Bad Break for Families

Washington—Today, U.S. Reps. Lloyd Doggett (D-TX), Peter DeFazio (D-OR), Ted Deutch (D-FL), Rush Holt (D-NJ) and Judy Chu (D-CA), along with Max Richtman, Executive Vice President of the National Committee to Preserve Social Security and Medicare, held a press conference during which they expressed concern over the Senate-passed tax cut deal’s impact on the bedrock of seniors’ retirement: Social Security. During the press conference, Rep. Doggett announced his plan to present an amendment to the Rules Committee to strike the payroll provision from the tax deal.

“Social Security’s dedicated funding base is jeopardized by this deal in an unprecedented way and there is a grave risk now that the retirement benefits of America’s workers will have to compete with our other priorities for a share of the general budget. It would result in Social Security being as dependent on annual Congressional action as public television or our National parks,” said Rep. Doggett.

He added: “The provision is also inequitable because, in many states, a substantial number of local and state employees do not participate in the Social Security system. They have no payroll taxes to cut and will receive no benefit from this portion of the deal.”

“Although the payroll tax cut is written as a one-year cut, there is a grave danger that it will not end up being a single year reduction but will be transformed into a permanent change in Social Security’s financing. The fact that it is included in a piece of legislation that is providing yet another extension of almost a Trillion dollars in tax cuts that were also intended to be temporary should give pause to anyone who believes it will be easy to let this cut lapse at the end of 2011,” said Max Richtman, Executive Vice President, National Committee to Preserve Social Security and Medicare.

“75 years ago, a visionary U.S. President created a contributory program that individuals and employers participate in equally, providing a reliable income to America’s seniors. The program became inviolate. Today, under the pretense of tough economic times, opponents of Social Security are poised to undo the New Deal and turn it into a raw deal for America’s seniors. The payroll tax holiday will open up the Social Security program to future attacks by those who want to dismantle or privatize the program,” said Rep. DeFazio.

“If the recent debate on the Bush tax cuts has taught us anything, it is that taxes are easy to cut but hard to restore. If this provision is made permanent, it will double Social Security’s long term funding gap and open a door that Democrats have long fought to keep closed – budgetary attacks on Social Security. There are alternative, equally stimulative ways that Congress can deliver $120 billion in tax relief to middle class families without jeopardizing Social Security’s independent revenue stream and paving the way for Republican attacks on this stalwart program,” said Rep. Deutch.

“With this deal, Social Security is put into a package with the Bush tax cuts and other tax provisions. As a result, Social Security becomes in a sense just another government program. This changes the very nature of Social Security. Social Security is not – nor should it be – another bargaining chip. I remain hopeful that we can find a solution that puts money in the pockets of middle class Americans without putting Social Security at risk,” said Rep. Holt.

Rep. Judy Chu added, “The Social Security Payroll Tax outlined in the tax package the Senate voted on today is the wrong way to do the right thing. It is the right thing to give relief to hard working Americans during the worst recession in generations. We should be delivering a break to the workers for whom the payroll tax is the biggest item in their federal tax. But it’s the wrong thing do it on the back of our Social Security system and undermine its stability and longevity. And it’s the wrong thing to give a break to some Americans and skip over millions of dedicated fire-fighters, police officers, teachers and public employees who don’t participate in Social Security through no fault of their own. It’s no wonder that 57% of the American people oppose this payroll tax. They oppose it because it’s just the wrong thing to shortchange millions or American workers and put Social Security at risk! Let’s do the right thing – let’s find a different way to turn around our economy – one that’s fair and makes sense!”

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The National Committee, a nonprofit, nonpartisan organization acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the Board of Directors and professional staff. The work of the National Committee is directed toward developing better-informed citizens and voters.

[jtown1123]

1. K&R DeFazio and NCPSSM are great resources on this subject.