SOCIAL SECURITY LAW: Democrat Solons Fear Payroll Tax Cuts Weakening Social Security
December 4, 2011
Washington - Some Democrat lawmakers and advocacy groups have expressed fear that the government’s plan to cut payroll taxes to strengthen the US economy could weaken Social Security, especially its retirement program.
The group said they are concerned the tax cuts could undermine political support from lawmakers and could affect almost 55 million Social Security beneficiaries.
The program has begun spending more on benefits each year than it receives in payroll tax revenue and, starting in 2036, it would not be able to pay full scheduled benefits, according to the trustees’ latest report.
The system is funded by a 12.4 percent payroll tax equally divided between workers and employers. Congress cut the employee portion this year by 2 percentage points. Obama wants to reduce it further next year, to 3.1 percent, while offering the same rate to employers that take on new workers. The lost Social Security funding would be made up through general revenue.
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