The Nebraska Democratic Party is criticizing Sen. Mike Johanns for not supporting the extension of the Social Security payroll tax cut. Johanns’ is sticking to his position.
In a teleconference with reporters, Nebraska Democratic Party Executive Director Jim Rogers called on the leading Republicans running for United States Senate to press Johanns to change his mind and support the extension. Rogers rejected Johanns’ argument that extending the payroll tax cut undermines the Social Security Trust Fund.
“It’s true that Johanns has certainly said this will hurt Social Security. We definitely contend that’s factually not true,” Rogers responded. “The payroll tax cut is paid for and makes up the revenue for that from the General Fund.”
Rogers said the average savings realized by the average Nebraska family from the payroll tax cut would increase in 2012 over this year. He the average Nebraska family saved a little more than $900 in 2011 and could save nearly $1,500 next year under a bill supported by Sen. Ben Nelson, a Democrat.
Rogers said that Republican U.S. Senate candidates Jon Bruning, Don Stenberg and Deb Fischer should call on their fellow Republican to support the extension. It is estimate a million Nebraskans would be affected by the extension.
Johanns responded to the criticism during an interview on Nebraska Radio Network affiliate KLIN’s Drive Time Lincoln.
“I don’t know Mr. Rogers, but he’s just wrong on this one,” Johanns told host Coby Mach. “And if he’s trying to fool people that no harm, no foul, well wait a second you’re going to have to pay this money back and that means you have to be able to go out and borrow money.”
Johanns noted that the federal government is already borrowing about 42 cents on every dollar in the General Fund. He also said that would make Social Security subject to the appropriations process.
Congress cut the payroll tax from 6.2% to 4.2% last year as a way to stimulate the economy. Johanns said that if Congress wants to put money into consumer pockets, it should simply write checks to taxpayers. He pointed out that Congress has done that in the past as a short-term economic stimulus.
Democrats cite a Macroeconomic Advisers study that estimates failing to extend the payroll tax cut would reduce GDP growth by half a percentage point, costing the economy as many as 400,000 jobs by the fourth quarter.