I'd say this has some risk of turning out really badly, and some possibility of being moderately positive. On balance I'd rather do without it, but it's somewhere short of 'craziest, unbelievable mistake.'
On the starvation point, the Trust Fund gets credited, so the date of Fund balance exhaustion is unchanged. What matters is the perception, but that cuts two ways. On the negative, it weakens the contributory nature of the program and plays to the "IOU" story. On the plus side, we need general revenue for the program before the Fund 'runs out' (subsists solely on current tax income). I've always thought that when the fund goes dry, we should just use general revenue to fill the hole. It's a more progressive revenue source than the payroll tax. So this change opens the door to full general revenue supplementation of the program's dedicated revenues. We do this now with Medicare, so it's not necessarily the end of the world. On Thu, Dec 9, 2010 at 12:44 PM, Eugene Coyle <[email protected]> wrote: > Is the payroll tax cut the craziest, unbelievable mistake of the Obama > deal? > > It is a one year deal with a guarenteed tax increase for workers at the > start of a presidential election year. All will agree then to extend it. > So Social Security will be starved of funds going forward and Alan > Simpleton will get to design the cuts in benefits and the new retirement age > of 85. > > Gene Coyle > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l >
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