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Hoyer and Harkin Come Out Against Payroll Tax Extension Bill

Democrats Rep. Steny Hoyer (MD) and Sen. Tom Harkin (Iowa) have come out with strong criticism of the bill that would extend the payroll tax holiday that was started in 2011. Hoyer says he will vote against the bill because it cuts pensions for government workers:

"When we work to protect the middle class, it is only right to protect them all, and federal workers are hardworking Americans who have already contributed $60 billion to deficit reduction over the next decade," Hoyer said in a statement. "Our deficit problems were not created by these men and women, and they will not be solved by only asking them to contribute.

"We must stop targeting these hardworking men and women while not asking others to contribute their fair share," he added. "For that reason, I cannot support this bill.”

Few Democrats have stood up for government employees, who have faced stagnating wages and layoffs during the Barack Obama administration, moves that have held back job and economic growth.

Harkin is upset with the provision in the bill that would extend the payroll tax holiday because he said it would start the unraveling of the Social Security trust fund by failing to adequately provide a dedicated revenue stream 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.

He argued that a far better plan would have been to simply grant working Americans rebates on their income taxes, the way Presidents Obama and George W. Bush had done in recent years.

Hauling Social Security into the equation, he said, betrays the legacy of Democratic presidents who started the program and strengthened it over the years, from Franklin Roosevelt to John Kennedy.

"This, I believe has been the hallmark and the underpinning of the party that I've been proud to belong to," Harkin said. "Cutting the payroll tax is a bad idea, terrible idea. I'm embarrassed that it's being proposed by a Democratic president and a Democratic vice president."

Many progressives were skeptical of the payroll tax holiday for the exact reason that Harkin is talking about here. Maybe other Democrats will start to listen. Probably not.

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1openmind's picture

Obama made a big mistake messing with social security...

he opened a Pandora's box. Gore was right.

MountainMan23's picture

From the start I opposed the Payroll Tax Holiday for Harkin's reason - it messes with Social Security.

Even if this deal doesn't "hurt" Social Security immediately (because the money lost is replaced from another stream) it hurts Social Security irrevocably by opening the doors to further messing with it. Precisely what our NeoLiberal alleged "leaders" want.

And when I heard that this time round this Payroll Tax Holiday was going to be financed on the backs of government workers I could not fn believe it. Of course that's wrong.

The altenative - an income tax refund - would serve the intended purpose of the Payroll Tax Holiday.

But of course it's anybody's guess how many Senators or Rrepresentatives - of either major party - will be satisfied without playing divide and conquer between govt employees and everyone else, and if the doorway to messing with Social Security is closed. Were those intended purposes of this "tax holiday" too?

But you know what is the saddest part of this Payroll Tax Holiday drama?

It's how pathetically small the resulting stimulus will be.

On the one hand the amount of money each recipient is going to get, although doubtless helpful, is tiny. Granted, the recent Obama bank foreclosure fraud settlement of $1800 per former homeowner is arguably worse, but it's still pathetic.

And the resulting "stimulus" will have very little overall effect on the economy.

I'd like to say it's a good idea suffering from partisan politics.

But I think it's been a partisan political move from the gitgo - a "tax cut for the middle class" (just like the Big Boys get doncha know?) - and a masked grab for our Social Security.

We need a bold plan rebuilding our infrastructure with a strong emphasis on our energy needs.

Government financed.

There .. I said it.

Democracy is too important to be entrusted to politicians.
Rise Up!

Marnie's picture

The Democrats have open the door for the Republicans to stamped through. What arguments can the Dims raise against them, when they started the trend?

when Obama is doing it for them?

If we want to fix the economy we need to put the money that goes to the military back into the economy and tax the rich.

Ape-Man's picture

we need to put the money that goes to the military back into the economy and tax the rich

This is the giant pink elephant in the room.

We need to re-instate the draft while we're at it. There is no reason to go to a hot war, that doesn't warrant the draft.

"Government by organized money is just as dangerous as Government by organized mob"
-= Franklin Delano Roosevelt =-

Tax the Rich's picture

No, we don't need a draft!

My kids do not need to be sent to some meat grinder to enrich the MIC bastards who will not be sending their kids.

Find another way to make your points against the fascists' on the right, and STFU about the draft!

Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.

Ape-Man's picture

What about it Mr. President? Is the payroll tax holiday reducing Social security revenue? This is not good!

He argued that a far better plan would have been to simply grant working Americans rebates on their income taxes

Good idea? how about that Mr. President?

$40 extra a month now will do me no good later in life, if i can no longer afford to stay alive...

What say ye Mr. President?

"Government by organized money is just as dangerous as Government by organized mob"
-= Franklin Delano Roosevelt =-

Loonie's picture

Oldest trick in the conservative playbook the world over. Tie a subtle and convoluted "slowly fuck the poor" to absolutely everything.

Different Anonymous's picture

Maybe other Democrats will start to listen. Probably not.

I predict the liberals will actually be berated for not supporting the President with moist, open-mouth kisses, then be told that there just weren't enough votes and we should all be more realistic.

by a bunch crooks that changed the laws for their own personal gain so they can engage in insider trading, something everyone else would go to prison for. Why the hell should I pay more taxes to these f***ing slobs? The money doesn't go where it needs to, sorry I refuse to hand money to incompetent boobs.

So if I make $300,000 you all think it's just perfectly fair I pay $65,000 to $75,000 in tax? Really?! You think the government deserves the equivalent of the cost for a condominium or fine sports car for someone who made $300/K?! Nearly a third of their income?!

If so you are so late for your therapy. The government sure as hell didn't do that much for any one person in the private sector in a tax season. Even at the present 15% long term capital gains that's $57,000 in tax. I'll bet good money if any of you were looking at cutting a check for $57,000 you would start to question why the hell the government deserves that much money to the ratio of what you made.

Goodnight, Frau Blücher

Tax the Rich's picture

Yes, it is fair. You should be paying at least that much on $300,000 year.

Even if you paid $100,000 a year in taxes, that would still leave you $200,000 a year to live on.

Do you have any idea what kind of lifestyle you can have on $200,000 a year? 98% of the people in this country would love to have half that amount to live on.

The problem isn't taxes. The problem is we have a government run by corrupt assholes, who are owned lock stock and barrel by the rich fascists,' and their only goal is to rape America for those rich pricks.

Stop being such an ignorant selfish asshole!

Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.

1openmind's picture

Isn't Social Security an insurance rather than a tax?

it isn't. I've posted this like a thousand times here.


On Page 17 http://www.gao.gov/new.items/d05193sp.pdf

17. Do Social Security taxes get spent on other government programs?

Yes. By law, the Social Security trust funds must invest in interest bearing federal government securities. Treasury then uses the cash to pay for other government expenses. In effect, Treasury uses Social Security’s excess revenues to help reduce the amount it must borrow from the public to finance other federal programs. In other words, Social Security’s excess revenues help reduce the overall, or unified, federal budget deficit.

In other words they take the cash, buy US debt (a.k.a. Treasuries) and monetize the debt, leaving behind and IOU for you and I which they promise to pay back plus interest. FLMAO!

Goodnight, Frau Blücher

Tax the Rich's picture

Once again, our "democratic choice" in 2012 - Barack Obama, is doing the heavy lifting for the GOP and conservafascists'.

Rush Limbaugh is what a smart person thinks a stupid bigot sounds like.