Committee for a Responsible Federal Budget

Posts tagged payroll tax holiday

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But the weak economy has placed indirect pressure on the program as well, in that lawmakers have relieved workers of part of the tax burden of financing Social Security benefits so as to bolster near-term economic growth. Under this policy, over $200 billion will be transferred from the General Fund of the Treasury to replace foregone Social Security tax collections. In 2011, due in large part to this change in program financing, payroll tax revenue represented only 70 percent of total Social Security income. Lawmakers should carefully consider whether continued significant General Fund financing for Social Security could threaten to undermine long-standing public perceptions of the program as an earned benefit financed by workers according to contributory social insurance principles.
The Social Security Trustees warn of unintended consequences of the payroll tax holiday in their latest report. And read our brief analysis and summary.

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U.S. As Charity Case – Move over Easter Seals, the national debt is becoming the hot new charitable cause. Billionaire Warren Buffett has promised to match the donations of any member of Congress towards reducing the national debt. He also agreed to match the $300 donation of a high school student. So, should Jerry’s Kids be worried? Economists have discussed how the mounting national debt could crowd out private investment, but will it also crowd out giving to charitable causes? Maybe the charity drives should be aimed towards curing a dysfunctional Washington.
Read the latest budget news. Lot’s of dollars, little sense.

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The Conference Committee should:

1. Include policies to put in place, or move the country toward, a
comprehensive plan to stabilize and reduce long-term debt.
2. Ensure that the costs of any extensions are fully offset over a five
to ten-year period.
3. Put in place permanent solutions for expiring provisions where
appropriate.

The Conference Committee should not:

1. Make temporary stimulus or job creation measures permanent,
or make it easier to continue extending them in the future.
2. Dismantle the sequester or otherwise add to the deficit.
3. Rely on budget gimmicks for offsets.

Things the congressional conference committee negotiating the payroll tax holiday and other extensions should and should not do. Read more here

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Congress fittingly capped a tumultuous 2011 by snuffing out yet another fiscal showdown while managing to kick the can of tougher decisions down the road. Both the Senate and House this morning approved, by unanimous consent, of a two-month extension of the payroll tax holiday and other various extenders. The most promising aspect of the whole ordeal is that the cost of the package was fully paid for (unlike last December’s tax deal).
From Congress Approves Two-Month Payroll Tax Holiday and Other Extensions.

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