So­cial Se­cu­rity ad­vo­cates fear pay­roll tax cut

The Pak Banker - - International3 -

WASHINGTON: Pres­i­dent Barack Obama's plan to cut pay­roll taxes for a year would pro­vide big sav­ings for many work­ers but makes So­cial Se­cu­rity ad­vo­cates ner­vous that it could jeop­ar­dize the re­tire­ment pro­gram's fi­nances.

The plan is part of a pack­age of tax cuts and ex­tended un­em­ploy­ment ben­e­fits that Obama ne­go­ti­ated with Se­nate Repub­li­can lead­ers. It would cut work­ers' share of So­cial Se­cu­rity taxes by nearly onethird for 2011. Work­ers mak­ing $50,000 in wages would get a $1,000 tax cut; those mak­ing $100,000 would get a $2,000 tax cut.

The govern­ment would bor­row about $112 bil­lion to make So­cial Se­cu­rity whole. Ad­vo­cates and some law­mak­ers worry that re­ly­ing on bor­rowed money to fund So­cial Se­cu­rity could even­tu­ally force it to com­pete with other fed­eral pro­grams for scarce dol­lars, lead­ing to cuts.

So­cial Se­cu­rity taxes "ought to be held sacro­sanct," said Rep. Earl Pomeroy, D-N.D., chair­man of the House Ways and Means sub­com­mit­tee on So­cial Se­cu­rity. So­cial Se­cu­rity is funded by a 6.2 per­cent pay­roll tax on the first $106,800 earned by a worker. -Reuters

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