In a campaign-style speech yesterday in Indiana, President Obama talked about the need to strengthen Social Security. This call for “action” comes despite the fact that the only thing this Administration has done for Social Security in the last seven years is allow the program’s red ink to balloon from $5.3 trillion to $10.7 trillion. And this number will probably grow when the 2016 Trustees Report is finally released.
So, what’s the President’s plan?
Of course, “asking the wealthiest Americans to contribute a little bit more.” In other words, a tax increase on small business owners, whose contributions to our economy support tens of millions of American jobs.
President Obama’s tax hike rhetoric doesn’t add up, and neither does his math.
Ways and Means Social Security Subcommittee Chairman Sam Johnson (R-TX) explained that raising taxes on job creators has never saved Social Security– and it’s not going to save it now.
“Some people in Washington suggest that we simply raise taxes — but history has shown we cannot tax our way to solvency,” said Chairman Johnson in an August 2015 op-ed. “Here are the facts: When Social Security first began, the payroll tax was only 2 percent — evenly split between employers and employees — on the first $3,000 in wages. But the payroll tax rate has since been increased to 12.4 percent.
“Moreover, the payroll tax rate now applies on the first $118,500 in wages. Raising taxes on today’s workers, whose paychecks are growing at the slowest pace in 33 years, is not just wrong — it does nothing to fix the underlying problem.”
Even if all earnings were subject to payroll taxes, Social Security costs would exceed revenue by 2027 and still wouldn’t be solvent.
Americans work hard and pay into this program throughout their lives. Republicans are working to ensure that Social Security is there for our children and our grandchildren, just like it’s there for seniors and individuals with disabilities today.
As Social Security expert and Forbes columnist Andrew Biggs said:
“What is unfortunate isn’t simply that the Obama administration has left Social Security – the federal government’s largest program and the biggest source of income for most retirees – worse off than it found it. It is that, even right at the end, the President put partisan politics before the public interest.”