Saving Social Security: Stopping Obama's Next Bad Deal
Monday 20 December 2010
by: Dean Baker,
t r u t h o u t | News Analysis
President Obama insists that he is a really bad negotiator, therefore, the deal he got on the two-year extension of the Bush tax cuts and the one-year extension of unemployment insurance benefits was the best that he could do. This package also came with a one-year cut in the Social Security tax.
This cut will seriously threaten the program's finances if, next year, the Republican Congress is no more willing to end a temporary tax cut than this year’s Democratic Congress.
The logic here is straightforward. Under the law, the Bush tax cuts were supposed to end in 2010. Tax rates returned to their pre-tax cut levels in 2011. However, the Republicans maintained a steady drumbeat about the evils of raising taxes in the middle of a downturn, even if the tax increase would just apply to the richest 2 percent of the population.
As we saw, President Obama and the Democratic Congress could not muster the votes needed to overcome the Republicans and ended up extending the tax cuts for the richest 2 percent of the population. The Democrats will be faced with a similar situation at the end of 2011 when the Social Security tax cut is scheduled to expire, except that, this time, the tax cut in question will apply to an overwhelming majority of working people.
(More here.)
by: Dean Baker,
t r u t h o u t | News Analysis
President Obama insists that he is a really bad negotiator, therefore, the deal he got on the two-year extension of the Bush tax cuts and the one-year extension of unemployment insurance benefits was the best that he could do. This package also came with a one-year cut in the Social Security tax.
This cut will seriously threaten the program's finances if, next year, the Republican Congress is no more willing to end a temporary tax cut than this year’s Democratic Congress.
The logic here is straightforward. Under the law, the Bush tax cuts were supposed to end in 2010. Tax rates returned to their pre-tax cut levels in 2011. However, the Republicans maintained a steady drumbeat about the evils of raising taxes in the middle of a downturn, even if the tax increase would just apply to the richest 2 percent of the population.
As we saw, President Obama and the Democratic Congress could not muster the votes needed to overcome the Republicans and ended up extending the tax cuts for the richest 2 percent of the population. The Democrats will be faced with a similar situation at the end of 2011 when the Social Security tax cut is scheduled to expire, except that, this time, the tax cut in question will apply to an overwhelming majority of working people.
(More here.)
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