The President announced at the beginning of this week payroll taxes for social security will be cut 6.2 to 4.2 percent. The President says not to worry because it is temporary for just one year. And it will not lose any money because it will be replaced by the federal government. The feds have no money so this will have to be borrowed. It will cost us $112 billion in general revenue funds. The reason, to stimulate the economy. If a person makes $50,000 they will receive $1,000. If they make over $100,000 they will receive $2,000.
Questioning the impact to the economy, Rep. Dan Lipinsky {my representative} said "The average person isn't even going to notice the 2 percent decrease in his payroll check. It is not like we are handing people payroll checks for $500 or $1,000 and saying 'spend it '. This is going to be a trickle of money into each persons wallet; and I don't think they are going to rush out to the stores and start spending."
Next year when it comes to restoring the cut some will say payroll tax will increase 50%. Any politician who refuses to extend the tax looks like he is taking from the middle class.Washington Post poll says 57% of American people oppose the Social Security tax cut. So what happens when it comes to next year? The fear is that it will not be increased back to 6.2 %. Congress is playing a dangerous game. The tax cuts are in a package of bills and most members will vote for it as the extension of unemployment benefits are in the package. We need for Congress to leave Social Security alone as this could destabilize Social Security. Social Security is at risk
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