Playing a Dangerous Social Security Game…
Social Security is off-budget. It is paid for via social security taxes and a social security trust fund. President Obama cut social security taxes, without cutting social security benefits. That was not all that bad, since there is still money in the social security trust fund.
What is risky is paying for social security cuts with general tax revenue — the Democratic plan to raise taxes not associated with social security to off-set cuts in social security taxes.
What is equally risky is paying for social security with spending cuts.
Why? Once we start to merge the social security budget with the general budget, we move down a clear path. Eventually, if we move down this path the social security tax will be eliminated for employees. How will we then fund social security? General tax revenues. What will happen in a few years when social security runs out of money? We will raise taxes on the 50% of Americans who pay taxes, to pay for the 50% who do not. What will be the result, taxes will continue to rise.
Social Security was designed to be paid for by payroll taxes, and nothing else should fund it. It should not be balanced with cuts to spending or increases in taxes. If we want to cut taxes for social security, we need to cut social security benefits as well. Social security must be paid for by social security taxes. Period. Not by general taxes. Not by borrowing (which is currently not the case as there is a trust fund with money in it), and not by cutting spending.
We should cut spending to balance the budget — not to pay for social security. We are spending over $1.5 trillion more than we make — we can hardly afford to fund social security out of general revenue — there is no general revenue. We should make cuts as part of the normal budgeting process.
My suggestion: fight over the omnibus. Make EVERY agency take a 5% across-the-board cut. No exceptions. Cut spending 5%. As to social security, find savings to pay for the payroll tax cut by making social security cuts.