Tom Harkin doesn't think the payroll tax cut is a good idea

[paulk]

"Harkin (D-Iowa), who has long been a staunch defender of Social Security, hammered it as the beginning of the end for the program.

"This Congress will be making a grave mistake -- a grave mistake -- and reinforcing a dangerous precedent," Harkin said in a dramatic Senate floor speech late Thursday. "And I’m dismayed that Democrats, including a Democratic president and a Democratic vice president, have proposed this, and are willing to sign off on a deal that could begin the unraveling of Social Security."

Harkin argued that Social Security had always been strong and protected because it was funded by its own dedicated tax stream that ensured every American would be guaranteed a basic income in their retirements, and that the program added not "even one dime to the deficits or the national debt."

But he said now that Congress was going to pay for this cut with borrowed money from the general treasury funds, the best argument of the program's defenders was gone.

"With this bill, we can no longer say that. We can no longer say that Social Security doesn't contribute to the deficit," Harkin said."

full article -

http://www.huffingtonpost.com/2012/02/17/payroll-tax-cut-tom-harkin_n_1284334.html

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Should we pay attention to an old school liberal like Senator Harkin or is there room for him under the bus?

[former9thward]

1. He is correct.

This is defunding SS. And it will never come back because someone will shout "tax increase".

[woo me with science]

28. Of course he is.

And it is deliberate. They did not have to do it this way.

[TheWraith]

36. No, it is NOT "defunding Social Security." Please do some research.

Social Security funding has not decreased one single dollar due to the payroll tax cut.

[Yo_Mama]

2. I'm afraid a mob is going to hold his head under the bus wheel, but

... I respect him deeply for trying.

I am heartsick at what we are doing. This really is the war on the poor, and I can't stand to see Democrats joining in.

[Javaman]

3. The payroll tax cut has to be in effect untill

the george w. morons tax cuts for the rich are rolled back.

Otherwise, the gap between the the disgustingly rich will expand exponetially.

Where as now, it's only expanding dramatically.

[hfojvt]

19. you think a tax cut for the rich (the payroll tax cut) reduces inequality?

You know that 2% of $200,000 is far, far, far more money that 2% of $15,000.

And yes, I know about the cap, but many power couples, with incomes over $200,000 have two people making over $106,000 so they get 2% at the maximum amount.

The payroll tax cut actually increases inequality, by giving much smaller amounts of money to the bottom 20% and much larger amounts of money to the top 20%. Of the approximately $110 billion cost - $50 billion is going to the richest 20% and only $4 billion is going to the poorest 20%.

[Javaman]

37. How the hell did you get that from my post?

The payroll tax is the only think standing between the middle and lower classes from sliding completely in the shitter.

the tax cut for the rich hasn't been rolled back and until it does, the payroll tax is the only thing keeping many people above water.

once the rich start paying their far share back into society, when their tax cut is rolled back and their taxes are increased, then and only then will we see real recovery.

I honestly don't know how you pulled "you think a tax cut for the rich (the payroll tax cut) reduces inequality?" from what I said.

that is some amazing logic gymnastics.

[joeybee12]

4. He's right...knr

[ProSense]

5. Completely

But he said now that Congress was going to pay for this cut with borrowed money from the general treasury funds, the best argument of the program's defenders was gone.

"With this bill, we can no longer say that. We can no longer say that Social Security doesn't contribute to the deficit," Harkin said."

...disagree with that argument.

How does the government borrowing money from Social Security and paying it back contribute to the deficit? This arrangement is the government borrowing money to stimulate the economy. Taxpayers didn't voluntarily decide not to pay into the system.

Dean Baker, September: The Payroll Tax Cut Did Not Cost Security Revenue

The NYT wrongly told readers that the payroll tax cut cost Social Security, "resulted in $67.2 billion of lost revenue for Social Security in 2011." This is not true. The tax cut was fully offset by money from general revenue so that the trust fund was unaffected by the tax cut.

http://www.cepr.net/index.php/blogs/beat-the-press/the-payroll-tax-cut-did-not-cost-security-revenue

Borrowing money from Social Security and then replenishing it, does not change the structure of the program.

The program's structure is codified by law. People pay into the fund, and any approved arrangement, such as the temporary tax holiday, is on the government, not the beneficiaries.

If $1 is collected instead of $1.25 because the government made an arrangement, the government is liable to repay the fund. That has nothing to do with the structure of Social Security related to the budget or deficit.

Claiming that Social Security adds to the deficit because the President and Congress approved borrowing from the fund and paying it back is like a guy borrowing $50 from you, giving it back, and then maintaining that every $50 he sees you with came from him, therefore you owe him money.

That makes as much sense as claiming that because the government has been raiding the fund, Social Security contributes to the deficit.

Many economists have supported a payroll tax cut as urgently needed stimulus as this time.

[paulk]

6. the argument is that it sets a precedent

not that it will cost SS revenue.

[ProSense]

9. But

"the argument is that it sets a precedent not that it will cost SS revenue."

...it doesn't.

[paulk]

12. explain yourself

how does this not set a precedent?

[ProSense]

15. Wait

"explain yourself"

There is a full explanation here: http://www.democraticunderground.com/?com=view_post&forum=1002&pid=322321

The fact is that the only precedent it sets is ensuring that the Social Security funds aren't raided.

The fund is fully paid back and is unaffected.

[paulk]

18. the "argument" you are disagreeing with is not the one Harkin is making

you take what people people say out of context and then argue against that strawman.

and continue to do so when it is pointed out to you.

I am through wasting my time with someone who debates in such a fundamentally dishonest way.

[ProSense]

20. I think

the "argument" you are disagreeing with is not the one Harkin is making

you take what people people say out of context and then argue against that strawman.

and continue to do so when it is pointed out to you.

I am through wasting my time with someone who debates in such a fundamentally dishonest way.

...you're in need of reading comprehension or are trying to introduce a red herring.

But he said now that Congress was going to pay for this cut with borrowed money from the general treasury funds, the best argument of the program's defenders was gone.

"With this bill, we can no longer say that. We can no longer say that Social Security doesn't contribute to the deficit," Harkin said."

I completely disagree with that argument.

How does the government borrowing money from Social Security and paying it back contribute to the deficit? This arrangement is the government borrowing money to stimulate the economy. Taxpayers didn't voluntarily decide not to pay into the system.

You can re-read the rest of my comment here: http://www.democraticunderground.com/?com=view_post&forum=1002&pid=322321

[woo me with science]

26. +1

[former9thward]

13. It does.

Already Obama is saying not enacting the cut will be a tax increase. Those words will be used forever.

[ProSense]

17. Well

"Already Obama is saying not enacting the cut will be a tax increase. Those words will be used forever."

...it's a good strategic argument against Republicans. Democrats have no problem with raising taxes. In fact, the President is trying to raise taxes on the rich.

[hfojvt]

22. Democrats have no problem raising taxes

that's funny

and sad.

Because that would be true of old school Democrats like Harkin, perhaps, but since Clinton adopted Reaganomics and Obama also jumped on that bandwagon, your statement is, sadly, no longer true.

And for Democrats to wag their fingers at Republicans for increasing taxes, makes it that much harder for Democrats to do so in the future.

[ProSense]

29. What's

hilarious is watching people call the President's proposal to raise taxes on the rich doomed and resigning themselves to saying it's never going to happen, and then seeing you invoke "Clinton adopted Reaganomics."

If Congress passed the President's proposal, it would happen. Maybe Harkin and the other Democrats in Congress can help to convince their colleagues to do it.

[hfojvt]

32. but Clinton did adopt Reaganomics

He promised a "middle class tax cut" and he attacked Bush Sr. for going back on his "no new taxes" pledge, even though when he did so, Bush Sr. was compromising with the Democrats.

As Bill Scher wrote in "Wait, don't move to Canada!"

"How do Republicans dictate the terms of the tax debate? They frame it as a simple choice between cutting taxes and raising taxes.... In 1992, Bill Clinton didn't defy the frame. He just turned it around, having been served up a huge opening on a silver platter - after President George H. W. Bush broke his 'Read my lips. No new taxes.' pledge. Clinton campaigned on a 'middle class tax cut' and attacked Bush as a tax raiser. Bush, sans moral authority, had no escape.

Clinton won, but the Republican frame was still in place: tax cuts always good, tax increases always bad." pp. 41-42


I would say, not only is the Republican frame still in place, but it is stronger than ever, because now it has bi-partisan support and there is nobody publicly disputing it. What did Obama do in his first SOTU? He bragged about cutting taxes for 95%. He might has well have said "I admit that Republicans are right. Tax cuts are good."

Now, he continues to say it. Basically he says "Reagan was right, tax cuts do stimulate the economy."

Sure, now he offers the Buffet rule, but to pass that, he has to swim upstream - against his own words. The public believes that tax cuts are good - because they heard it from him. And that tax increases are bad - because they heard it from him.

[former9thward]

23. Yes Democrats do have a problem raising taxes.

The Bush cuts should not have been extended -- for anyone. The payroll tax should not have been cut -- for anyone. Both are irresponsible and will come back to bite us.

[ProSense]

30. Yeah,

Yes Democrats do have a problem raising taxes.

The Bush cuts should not have been extended -- for anyone.

and the Making Work Pay credit should have expired (also representing a tax increase) along with the EITC.

See, you can argue that the tax cuts for the rich should have ended, which was what Democrats wanted, but if you believe that no stimulus was needed in the form of relief to low- and middle-income Americans, then I disagree.

[sad sally]

33. de ja vu all over again? And how can this "tax increase" ever be stopped?

Just like the "temporary Bush/Obama federal income tax cuts," this "temporary payroll/FICA tax cut" will not go away. It will continue until Social Security becomes a only a memory - destroyed at the hands of our Democrats - and years from now (if Earth still exists), people will look back and ask why.

[xchrom]

7. this going into the general fund is a loser --

and cons will claim it's a tax hike if dems ever get the spine to reinstate.

[paulk]

14. I agree

it's going to be difficult to reinstate the payroll tax.

It will be seen as a tax hike by many.

[deutsey]

8. "old school liberal"

That's why I initially supported his run for president in '92. I voted for Clinton because he was the nominee and Bush I had to be booted out, but I had hoped for Harkin as a counterbalance to Reaganism.

While a lot of Democrats were cowering in fear because of Bush's post-Gulf War ratings, Harkin was the only one to call the Bush administration full of bullshit (literally).

It's too bad Harkin's campaign was apparently so disorganized.

[woo me with science]

25. Yep, hasn't sold out here. nt

[DJ13]

10. Its not just a bad idea, it doesnt target helping those who need it the most

Its based on income, which doesnt do diddly shit to help the working poor, as it results in only a few extra dollars per paycheck.

The old "Making Work Pay" tax credit was a far better instrument for targeting the working poor.

[SammyWinstonJack]

11. Under the bus goes Senator Harkin.

[librechik]

16. I agree with Harkin

just because it's the only tax cut we could get the Repubs to go along with doesn't mean we should do it. They'll only use it as an example of how "cooperative" they are, and it will threaten our SS fund. I'm sick of this excruciating appeasement policy. We need to MAKE the Repubs do the right thing since they won't volunteer to do so.

[Life Long Dem]

24. Do the right thing Repubs!

That's a good one!

[spanone]

21. wait till a republican president takes hold of this idea....adios!!!

[MadHound]

27. This is why I'm seriously concerned about the Republican cave on this

Perhaps they took a look at this proposal and saw it as a really great way to reach their Holy Grail, cutting Social Security to the bone.

I've been warning about this stupidity for awhile now, but suddenly it's become cool for Democrats to become tax cutters and to put Social Security at risk. And since this is an Obama initiative, somehow that makes it all good.

And five years from now, when SS funding has been cut, this is something we can remind people of, the stupidity of Obama and the Democrats.

[woo me with science]

31. It's not a cave.

It's collusion. This was a transparent and utterly predictable "cave" on their part.

[xchrom]

34. +1

[kentuck]

35. Senator Harkin is right...

...and those Democrats that argue otherwise are naive, to say the least.

If it is going to be borrowed from the general revenues in order to pay for it, while everything is being cut, what will be cut to pay for the "payroll tax cut"? (Which is a manipulative term to begin with)

[kenny blankenship]

38. Defunding Social Security not a good idea he says?

What is he - some kind of Democrat?

[Blue_In_AK]

39. I agree with him 100%.

This is a very dangerous trend.

[NorthCarolina]

40. He's absolutely correct. k&r

[emmadoggy]

41. I completely agree with him. nt