A Nebraska Congressman objects to extending the payroll tax cut for any length of time, insisting that it’s a raid on Social Security.
Congressman Jeff Fortenberry doesn’t think much of the stalemate in Washington over the payroll tax cut extension.
“Well, it’s a complicated mess,” Fortenberry tells Nebraska Radio Network in an interview. “I think this, unfortunately, further erodes people’s confidence in the institution, particularly around Christmastime.”
Fortenberry doesn’t think much of the move to extend the payroll tax cut, either. Fortenberry, a Republican, opposed the so-called payroll tax holiday last year. Congress cut the 6.2% payroll tax to 4.2% in an effort to get more money to circulate in the economy.
Congress has approved the measure and President Obama has signed it.
The Senate last weekend voted 89-to-10 to extend the tax cut for two months, providing more time to negotiate the terms of extending it for a full year. The Senate bill also contained a provision requiring President Obama to make a decision on TransCanada’s application for a permit for the Keystone XL pipeline within 60 days. The Senate adjourned until late January after approving the package.
Republican leaders in the House rejected the agreement. They called for the Senate to return to Washington and negotiate a compromise between the two chambers, a call the Senate ignored.
Things changed in Washington, though, with the Christmas holiday and the deadline for the tax to expired fast approaching. The House gave in, breaking the logjam and sending the president the bill upon which he intensely lobbied.
The payroll tax cut affects 160 million Americans this year, one million in Nebraska. The tax cut amounts to approximately $1,000 a year to the average worker. The package also contains money to continue paying unemployment benefits to the long-time unemployed, about two million Americans. A provision to hold Medicare reimbursement rates steady for doctors was added, as well. Those rates were scheduled to be cut in 2012.
Fortenberry insists the extension of the tax cut is not good policy, no matter if extended for two months or 12. He says the cut unhinges Social Security from its stabilized, traditional funding source. Fortenberry says the tax cut amounts to a raid on Social Security. He’s not impressed that the losses to the trust fund would be made up with a transfer from the federal government’s general fund. The Congressman says that makes Social Security dependent on the uncertainties of the Congressional budget process.
Fortenberry suggests that not enough people have questioned cutting the tax that funds Social Security.
“So, it seems like a nice gift at the moment, but it has huge policy implications for the stability of Social Security in the future,” according to Fortenberry. “I don’t want to raise taxes on any hard working American, but trying to reduce the payroll tax and raiding Social Security is not good public policy.”