John Block Reports from Washington
John Block has dedicated his professional career to the fields of agriculture, food and health.
The Future of Our Social Security Trust Fund
Dec 19, 2011
We have heard all the talk about Social Security and whether it can survive. We have a growing aging population drawing out more money every year and a shrinking younger work force putting less money into the trust fund.
Last year, Congress voted to provide a $1,000 tax break to workers by cutting the rate on payroll taxes. Consequently, workers paid less payroll taxes, thereby denying the Social Security trust fund that money. That money is supposed to go into the trust fund as savings to be drawn out to pay retirement benefits.
I understand that with unemployment high and a recession on our shoulders, we wanted to give the workers a buck. But now, the debate in Congress is about whether it should be extended for another year.
As I write this commentary, this issue has not been resolved. Conservatives hate the whole idea. They think that it is just a Band-Aid that denies money that the Social Security trust fund desperately needs. Liberals just like to hand out money. That has always been a good way to buy votes.
The Republican leadership is fearful that if the tax break is not extended, they will pay a political price next November. So, the Republican House has passed a bill to extend the tax break, but tied to it is a provision to push forward the construction of the 1,700-mile Keystone XL oil pipeline from Canada to the Gulf. Environmentalists are livid.
Our government is $15 trillion in debt. For every $1.00 that we spend, we have to borrow 40 cents. Democrats argue that the tax break could be paid for by taxing the rich. Republicans adamantly oppose new taxes of any kind.
Here is what I think. We should not extend the payroll tax cut. It’s the principle of the whole question. The Social Security trust fund needs to be respected and workers should be paying into this retirement fund. Any deal to reduce this obligation weakens the integrity of the fund.
If we think we need to give people money, we need to find a different way to do it.
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