Republican Senators Push False Argument That Payroll Tax Cut Will Undermine Social Security [View All]

Republican Senators Push False Argument That Payroll Tax Cut Will Undermine Social Security

By Travis Waldron

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The latest argument to emerge from the GOP has been that extending the payroll tax cut would undermine Social Security, since payroll tax revenue goes directly into the Social Security Trust Fund. Multiple Congressional Republicans have adopted that theory of late, including South Carolina Sen. Jim DeMint (R), who put it to use on CNBC last night:


Kentucky Sen. Rand Paul (R) made the same argument on Fox News earlier in the day:


Watch a compilation:

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That argument, which has been adopted by members of both parties and perpetuated by news outlets like NPR, has one problem: it’s not true. Each of the plans under consideration is fully paid for, replacing revenue the Social Security Trust Fund would have lost from lower payroll tax receipts with money made up from either alternative revenue sources or spending cuts. The earlier payroll tax holiday, set to expire this month, was also fully-funded, and the program has thus far “been held harmless” from the holiday, as Reuters noted today....Social Security actually has a $2.6 trillion surplus and is solvent through at least 2037.

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UPDATE Stephen C. Goss, the Chief Actuary of Social Security, said today that the Social Security Trust Fund “would be unaffected by enactment” of a payroll tax cut extension, according to a statement circulated by Sen. Bob Casey (D-PA). The Congressional Budget Office agreed, saying all lost revenue would be offset.

UPDATE Joe Sonka, a reporter for LEO Weekly in Louisville, Kentucky points out that in addition to means testing, Paul has also supported privatizating Social Security and called it a Ponzi scheme, making his strident defense of the program now seem even more insincere.