Obama Jobs Plan Tax Cuts Threaten Social Security

This interview at Real News Network focuses on the element of the Obama “jobs” plan most likely to see the light of day, namely, the payroll tax cut and the “reform,” meaning gradual erosion, of Medicare and Social Security.

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    1. William Wallace

      Where was Obama talking about a tax on wall street finances? Warren Mosler says the financial sector is a lot more trouble than it is worth, and that 99.9% of it is useless. I agree. The power to TAX is the power to destroy, so if we need to wipe away 99.9 percent of the finance sector – according to Warren, why didn’t Obama talk about taxing them into oblivion last night? This is nothing new, Maryland tried to stop the EVIL USELESS finance sector with taxes and looked what happened:

      McCulloch v. Maryland, 17 U.S. 316 (1819), was a landmark decision by the Supreme Court of the United States. The state of Maryland had attempted to impede operation of a branch of the Second Bank of the United States by imposing a tax on all notes of banks not chartered in Maryland. Though the law, by its language, was generally applicable to all banks not chartered in Maryland, the Second Bank of the United States was the only out-of-state bank then existing in Maryland, and the law was recognized in the court’s opinion as having specifically targeted the U.S. Bank. The Court invoked the Necessary and Proper Clause of the Constitution, which allowed the Federal government to pass laws not expressly provided for in the Constitution’s list of express powers, provided those laws are in useful furtherance of the express powers of Congress under the Constitution.

      This fundamental case established the following two principles:
      1.The Constitution grants to Congress implied powers for implementing the Constitution’s express powers, in order to create a functional national government.
      2.State action may not impede valid constitutional exercises of power by the Federal government

      What about states like texas and alaska succeding from the Union so they can get out from under this 90% USELESS finance sector? It seems accepting the constitution is what puts this ton of useless finance bricks on your back and throws the monkeywrench into your guts, breaking off from the USA will FREE YOU!


      On April 8, 1816, the Congress of the United States passed an act titled “An Act to Incorporate the Subscribers to the Bank of the United States” which provided for the incorporation of the Second Bank of the United States. The Bank first went into full operation in Philadelphia, Pennsylvania. In 1817, the Bank opened a branch in Baltimore, Maryland, and transacted and carried on business as a branch of the Bank of the United States by issuing bank notes, discounting promissory notes, and performing other operations usual and customary for banks to do and perform. Both sides of the litigation admitted that the President, directors, and company of the Bank had no authority to establish the Baltimore branch, or office of discount and deposit, other than the fact that Maryland had adopted the Constitution of the United States.

      1. Paul Tioxon

        Other than the more perfect Union argument, what else is there to legally justify The Federal Government operating outside of Washington DC? The fact that this money could be used in any state in the Republic, creating a common currency and enabling commerce according to one, standardized unit of account. I suppose the Maryland jingoist wanted their own Maryland gauge RailRoad tracks, once the interlopers from out state brought their freight trains into their Homeland.

      2. sleepy

        Secession got a bad rap as a result of it being the politically vehicle to preserve slavery.

        Given the rank and broken nature of our present federal government, I think that local/state government is far more responsive.

        A seceded Vermont would be a very different character than a seceded Texas.

  1. anjon

    Hello Yves,

    I know some progressive Senators have been saying this, but I believe the amount of the payroll tax cut is credited back to the Social Security trust fund by the Treasury Department general fund. Bob Greenstein of CBPP confirmed it, and I pulled this from the WhiteHouse “fact sheet”:

    “the American Jobs Act will specify that Social Security will still receive every dollar it would have gotten otherwise, through a transfer from the General Fund into the Social Security Trust Fund.”


    1. attempter

      That’s always been the way SS has received every dollar. In fact, supposedly dedicated payroll taxes were simply spent as general revenue. That quote is simply part of the Big Lie that SS is or ever could be in any kind of fiscal trouble.

      Obama wants to pretend that the payroll tax cut (which we need to make sure is permanent) has any connection whatsoever to the fiscal state of SS. There is no connection other than a fraudulent political one.

      Indeed, this way I just phrased it – “fiscal state of SS” – is a misnomer, since it’s merely a synonym for the fsical state of the US government itself. As long as the government can fund bailouts, wars, corporate welfare, it can fund SS.

        1. Rex

          Braveheart? Is that you?

          What’s Greenspan got to do with anything now except maybe being a benchmark for bad ideas that seemed to work for a while.

          The rest of the comment seems to be a spattering of paranoia except for the slave part. We are all becoming slaves or chattel or some kind of resource to be milked, bled or slaughtered.

      1. Wasabi

        But fraudulent political myths are just as powerful as non-fraudulent ones, if any of the latter exist. It’s true that SS funds are used as general revenue (that began with LBJ, didn’t it?), but that’s a different problem from protecting dedicated SS taxes for the future. Obama’s SS tax cuts would require that general revenue be used to make up the significant shortfall from the SS tax. This means that formally speaking SS will become partially dependent on injections of general revenue to resupply the SS trust fund. This formal dependence in turn gives ammunition to the Repubs, the Republocrat Obama, and the Blue Dogs to claim that they have to cut SS in order to “save” it. This will soon become an important ideological meme as the Supercommittee gets up to speed. The proposed tax cuts will become semi-permanent and probably permanent, just like the Bush-Obama tax cuts. Instead of strengthening SS by raising the salary cap of $106,800 or robustly using general revenues, the Repubs and Obama surely have long-range ideology-driven plans to severely cut or eliminate the SS tax (along with most of the New Deal) and to transition to a position from which a general-revenue-dependent SS is eventually shrunk down to a bonsai pension system, with Wall Street getting to handle the great majority of pension funds in America.

        The US is rapidly evolving into a two-class neo-Third World society, and in the midst of this class war it is naive and dangerous to cut the SS tax, despite its contradictions.

        1. attempter

          1. The kleptocracy wants to gut SS and Medicare. If it’s politically possible, they will do so. They’ll use any pretext. If they can use the payroll tax cut as a pretext, they will. If they can’t, they’ll try to use something else. The measure of whether they can gut SS and Medicare at all, and of whether or not they can use any particular lie as a pretext, is whether or not the people fight.

          The only thing that’s dangerous and naive is the kind of cowardice that thinks we can defend the position of the moment if only we don’t get uppity and do anything which might give the criminals a “meme” (and with one’s head in the sand the whole time).

          2. Regressive* taxes are just another kind of gangster extraction, and should be viewed as any other form of mugging. Every dollar we can preserve from them now is a win, since that’s a dollar we can use now to survive and to fight back. Every dollar taken from us now is lost to us forever. You may believe the lie that if we’re good little sheep and dutifully pay into the line item “social security”, then the system will keep that money for us and give it back someday with interest. I assure you, that’s as dangerous and naive as delusions get. We already paid for SS, and the money’s our right. Whether or not we get it is, again, purely a measure of whether we fight for it.

          [*Under kleptocracy, all taxes on the non-rich are regressive. Payroll taxes are of course regressive by the textbook definition as well.]

          3. The money extracted from us now is not only lost to us forever but is handed over to America’s corporate enemies, in the form of corporate welfare and police state construction, to be used as a weapon against us. Campaign finance and Citizens United is just one notorious example. If the government wants to be the ultimate corporate bagman, let it borrow and print. We have to reject all taxes on the non-rich as lacking all legitimacy. We know government doesn’t need them for any purpose other than social control. Let’s deny it that mode of control.

          The proposed tax cuts will become semi-permanent and probably permanent, just like the Bush-Obama tax cuts.

          We had to accept permanent tax cuts for the rich, but let’s draw the line and prevent any such permanent tax cut for the non-rich!

          Unfortunately, these days I’m not at all surprised to see a “progressive” saying that.

          1. sleepy

            And many of us accepted how astute and forward thinking it was to increase the payroll tax in the mid-eighties to pre-fund the boomers’ retirement through the gigantic ss surplus that the tax increase created.

            To some extent that made financial sense–at least in the sense of intergenerational equity. In other words, once the boomers retired it would have taken an even larger payroll tax increase on the generation that came after the boomers to support the boomers retirement.

            Who thought the government would have stolen the surplus and will engineer a legislative default on those bonds by engineering a chained cpi in order to stretch out the redemption period for those bonds?

            I shoulda known better.

      2. jake chase

        The only legitimate purpose of income taxes is to limit income inequality. Under neoliberalism that purpose was abandoned. All income taxes are now paid by the non-rich. Large corporations avoid taxes through transfer pricing, and sooner or later the “repatriation of earnings” scam will eliminate even the deferred taxes on foreign earnings of us companies. Social security taxes are even more regressive than income taxes, the contribution limit stops at $106k, quite convenient for the looting class. True reform would eliminate income taxes on all income below $100k. The rich might as well pay for government since they are its only significant beneficiaries.

        Everything happening in politics today is working in exactly the wrong direction, which makes thinking about it mostly a waste of time. Individuals must figure out how to survive despite government and corporate determination to make life impossible for anyone not rich who is unwilling to become an indentured slave. This takes some doing. Avoid the debt trap, the education trap, the marriage trap and the children trap. Learn a physical skill for which the rich provide eternal demand. Learn to cook and become a personal chef. Install custom window treatments. Fix Mercedes Benzes. Design interiors and landscapes. Peddle antiques. Make custom shoes of genuine leather. Design orthotics useful in Chinese footwear which is never wide enough. Criticize art. Write self help books for steroidal executives and depressed socialites. Write jingoistic and upbeat speeches for politicians and executives. Talk conventional nonsense on business television. If female, learn to babble about sports. If male, learn to babble about weather. If athletic, learn to operate a hand held camera and run around the bases, capture dugout nose pickers. Lots of work available for those having the right skill. Factory work isn’t coming back to America, which means the only factory jobs will be bashing cattle and butchering chickens.

        Feudalism may be back but at least we have indoor plumbing and televised sports.

        1. Stratos

          Another course of action, jake chase, would be to begin to starve the banksters and the rest of the FIRE sector of our support. Three major ways of doing so would be:

          1. Pull money en masse out of Wall Street behemoths like Chase and Wells Fargo and put it into your local credit union. Shift as many transactions away from the banksters as possible. This simple step is difficult for many people because they are, as one erstwhile financial crusader described, “creatures of habit.” Eating is a habit, too. If we want to continue to “indulge” in that habit, Americans had better be prepared to change their financial habits.

          2. Form a broad coalition to tightly regulate the credit reporting agencies. They are private businesses with an enormous amount of power and influence over the lives of Americans, but operate relatively unregulated and under the radar. Credit reports are used by banks, insurance companies, property owners and consumer goods retailers to make decisions about whether to work with people and how much to charge them for goods and services.

          As it stands now, credit reports are frequently riddled with errors which have highly detrimental effects on the lives of citizens. They should be financially accountable to the subjects of the report with each and every error. They should also be financially liable for not preventing identity theft which is often facilitated by their indifference.

          3. Push for a complete repeal of the Orwellian titled, Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). This banking sector written law with its eligibility restrictions, means testing, and mandatory counseling is a legal travesty. Among the two groups of fish caught in the BAPCPA net are mortgage borrowers and student loan borrowers, not coincidentally two groups that are being savaged under the the current system.

          Mortgage borrowers are on the receiving end of nothing less than a land grab by the FIRE sector similar to the land grabs in Africa, India and Southeast Asia. Different name, same phenomenom. Student loan borrowers are set up for life long debt peonage. Not only are they stabbed in the back by Sallie Mae and private banks, their alma mater also gets a kickback for throwing student loan borrowers into the debt hopper.

          If we don’t act now, the banks may have the gall to clamor for the Indian Model: intergenerational debt peonage (i.e. your children and grandchildren have to repay your student, mortgage and credit card debts with interest that never stops accruing). If that happens, America will no longer the land of the second chance, it will be the land of no chance at all for the majority of its citizens.

          1. Ray Phenicie

            Glad someone else has caught on to my plan to bring the banks to heel like a well trained dog. Stop paying them, no matter what the situation, car note, mortgage, student loan, credit card, personal loan.
            To the Fraudster Banks

            They are a bunch of thugs and deserve the comeuppance that all thugs do: time out in the penalty box and their stolen goods taken away from them.

        2. JTFaraday

          “If female, learn to babble about sports.”

          If that’s where the future of feminized labor lies, you’re more optimistic than I am.

    2. linrom

      Reduction in payroll taxes will create red ink in Social Security and Medicare disbursements that will give ammunition to those like Bruce Krasting of Zero Hedge that falsely argue that Social Security is already a drain and an unfordable luxury—a present and future ‘problem’ to all those holding out for increased interest payments on US debt like PIMCO.

  2. MyLessThanPrimeBeef

    Do I hear him correct that the Fed will stop paying banks interest on their cash reserves so as to…this is the part I want to make sure, so as to force them to start thinking about lending?

    I thought they don’t lend reserves?

    1. LucyLulu

      Banks are required to keep a certain level of reserves on hand to cover deposits. They are free to lend out any excess reserves they have on hand, and courtesy of QEx, they are awash in excess reserves. In a normal economy, and when reserves do not earn interest as it was before 2008, banks would be more motivated to find ways to put the money to work.

      My question is…. are there borrowers motivated to take the money?

      1. William Wallace

        “A New “Project Rebuild”, which will put people to work rehabilitating homes, businesses and communities, leveraging private capital and scaling land banks and other public-private collaborations …”

        “Immediate investments in infrastructure and a bipartisan National Infrastructure Bank”

        LOL@ A new national BANK, how do I get a job at this bank? So I can get the bonus? How so I own shares in this bank? Obama and his new national bank, just more and more red tape and beuraucratic layers to paper over the problems.

  3. constantnormal

    “I thought they don’t lend reserves?”

    Never fear. They will compensate for the loss in revenue by moving to more highly leveraged credit default swaps in their trading …

    1. William Wallace


      The US Securities and Exchange Commission has begun examining the use of derivatives by mutual funds and whether derivatives enable funds to exceed investment restrictions set by law.

      “Mutual funds may be able to use the derivatives market more now that it is more transparent, but it could become a huge regulatory burden unless the rules are clarified,” said Kevin McPartland, director of fixed income at Tabb Group.

      The SEC’s concept release, published late on Wednesday, said key topics include whether derivatives enable mutual funds to use more leverage than the law allows or to concentrate their investments in single companies or industries. The SEC said it would solicit public comment on the release.

      “The controls in place to address fund investments in traditional securities can lose their effectiveness when applied to derivatives. This is particularly the case because a relatively small investment in a derivative instrument can expose a fund to a potentially substantial gain or loss, or outsized exposure to an individual counterparty,” said Ms Schapiro, speaking on Wednesday at the SEC.

  4. Richard Kline

    This isn’t a ‘jobs’ plan, it’s a money gift to businesses. That money will be pocketed; very, very little will go toward hiring in a down-trending economic context. Far from helping sucker constituents, it’s a payoff to business to show them that Bama will be there boy better than The Other Guy. Total con . . . . —If any part of it is passed by Congress. Which is doubtful, since the Repubs don’t want the Hoper to have anything to campaign on. In which case Bama can do nothing (as always) and say, “Take your complaints down the Mall, I tried.”

    So that’s our governmental process as of today: hand motions, genufluctions, bribes to the affluent, lies to the constituents, a fluttered succession of images on the screen, a flying finger to the country at large.

    1. Rex

      Yep. I think you summed it up. More BS theater.

      One of the recaps of the speech I saw chained together a bunch of Obama statements like, “pass this bill”, “so this legislation should be passed now”, “act today to pass…”, etc. So clearly he’s just making some noise so later he can say, “they didn’t do anything again.”

      Richard, “So that’s our governmental process as of today: hand motions, genufluctions, bribes to the affluent, lies to the constituents, a fluttered succession of images on the screen, a flying finger to the country at large.”

      You nailed it. Wish I could find a reason to argue.

  5. Bruce Krasting

    There will be no consequence to Social Security Trust Fund as a result of the proposal to cut FICA. Treasury will pay the difference to SS on a monthly basis. That is how it was done in 2011. That is how it will be done in 2012.

    So the whole discussion that this somehow undermines SS is off the mark.

      1. sleepy

        For once, Cantor and the repubs can say with accuracy that ss now does in fact contribute to the general fund budget deficit.

    1. Doug Terpstra

      You can’t recognize the camel’s nose under the tent flap? The smelly beast will despoil the rug before long. The payroll tax cut ensures that SS competes directly with war for funds; which do you suppose will win? This brings the frogs to a slow boil; it’s the stealth fulfillment of Grover Norquist’s wettest dreams by the Trojan dark horse.

  6. Norman

    All things being what they are, any bets as to the time frame the Military Coup will happen? This nonsense cannot continue and everyone knows it. The dilettantism that prevails as well as the sycophantic attitude that goes with it, isn’t sustainable and everyone knows it. This present bunch drink their own koolaid, in fact probably from the same jug, so, before the country implodes, the Generals will ride in.

    1. Ruminations

      The Military and Bankster leadership are on the same team. The only way to pay for the violent global resource control wars was to push the sacrifice of paying for it onto the majority of the US populace. For you, no jobs and housing we will steal from you. For them, bombings and bloodshed.
      It isn’t subtle either, they’ll keep the court houses open to give you the impression of due process, we’ll let you vote for another impression, keep the Constitution in a glass case for you to look at, all the trappings of a poorly rehearsed dysfunctional dog and pony show.

  7. Paul Tioxon

    I am afraid of the hysteria here by otherwise informed, if argumentative people of good will can go over the edge. The payroll tax will not be collected, but Social Security will be funded.

    The payroll tax will not be collected, freeing up money from employees and for the first $5 MILLION OF EMPLOYERS PAYROLL.

    Social Security will be funded from general revenues, because that is the law that it is to be funded, not how it is funded for the time being. Collecting a tax and funding a trust fund can be broken into two discrete processes, as in the economic emergency we now have. That does not mean, that Social Security is not being funded or eroded. It is not a logical consequence of this accounting maneuver.

    Secretary of Defense Gates, killed a high profile jet engine for a new weapon system, that does not mean he wants to liquidate the Air Force. Furthermore, in Washington, having lost all of the battles and the war does not mean something can not come back from the dead. Social Security is under attack like has been from its founding, and never as much as today by mainstream, national politicians like Paul Ryan, Pat Toomey and now, Rick Perry. The tweaking of Social Security’s method of funding is about as disruptive of its survival as Dodd-Frank has disrupted Wall St bonus pay.


    Yves, I have to wonder where your head is at, when Rick Perry has started the BIG LIE, THAT SOCIAL SECURITY IS A PONZI SCHEME, ON THE ORDER OF B MADOFF, but that gets no response from you, but this Jobs Act Component is proof positive that the Panzers Divisions are liquidating Poland under the able command of Obergruppenfuher Obama.

    Care to clarify this position or am I just harumphing or something along those lines? Oh let me guess, the conspiracy is working a classic pincer move from the left and the right?

    1. attempter

      Social Security is under attack like has been from its founding, and never as much as today by mainstream, national politicians like Paul Ryan, Pat Toomey and now, Rick Perry.

      Aren’t you forgetting the most aggressive assailant of all, Barack Obama?


      (To review, this thing was too politically rancid for even Congress to swallow, so Obama autocratically imposed it. He was under zero political pressure to do so, and did it out of true-believer hatred for Social Security.)

      1. Paul Tioxon

        Attempter, you are completely wrong in your facts about the Erskine Bowles Commission. Leaving aside the proposal of a commission is guarantee to get advice, publicity but no results. If you think a commission is the worst assault to date against SS, guess again. Obama has proposed no piece of legislation to Congress to destroy Social Security. Paul Ryan has. It was not a commission, but a budget with the force of law. He wasn’t seeking advice from a blue ribbon panel of slack jawed jerk offs from the American Enterprise Institute or the Mercatus Center.

        Here is Paul Ryan’s roadmap for America:

        Arrests at Paul Ryan’s ‘town hall’ event


        Pat Toomey, now a Tea Party Senator from PA, was a regular old republican Congressman from PA. Not only is he the architect of defaulting on the debt ceiling, by not raising, it, he also voted as Congressman for the President George W Bush plan to destroy Social Security. It was not a camels nose in the tent, it was completely shutting it down and replacing it. It was shock doctrine from the commanding heights of capitalism.


        Wants to privatize Social Security. Toomey has supported privatizing Social Security for years, saying that “personal accounts mean personal prosperity.” Toomey claims, “you don’t really have to worry about a fluctuation in the stock market.”
        Calls the Social Security Trust Fund a “hoax.” Toomey writes: “The Social Security Trust Fund is the biggest hoax since the Loch Ness monster.”
        Soft on Wall Street. Toomey said that deregulation of derivatives did “absolutely nothing to cause the financial crisis.”
        Uses fuzzy math to defend Bush tax cuts. “It is not clear that [extending the Bush tax cuts for all] would add trillions to the deficit.”

        Obama proposes eliminating the ceiling for SS from its loophole cap, preventing most income in America from funding an already surplus choked Trust Fund. It has over $2Trillion surplus. That is the reform camel nose he is in favor of. The continued attacks, on selectively choosing to believe Obama is telling the truth when he meets with conservatives at George Will’s dinner party as proof that he is out to destroy SS, Medicare, Medicaid and then, rejecting as lies other statements he makes about issues is not proof of anything other than a miserable attitude.

        1. Marting Finnucane

          Toomey writes: “The Social Security Trust Fund is the biggest hoax since the Loch Ness monster.”

          Aw nuts …. you mean I agree with Pat Toomey on something?

        2. attempter

          rejecting as lies other statements he makes about issues is not proof of anything other than a miserable attitude.

          1. Unlike liberals, I could not possibly care less about the “statements” of the powerful. I care only about actions.

          2. Obama’s statements have been uniformly corporatist, austerian, and deficit-terrorist as well. They concur with his actions perfectly.

          3. You lie about the Catfood Commission. Obama’s autocratically imposed Commission was intended to make a proposal that would then be the basis of legislation. It tried to do so but failed, since its proposal ended up being too vicious for even Congress to want to risk.

          But that was Obama’s proposal.

          4. How typical of your kind that you’re incapable of coming up with an affirmative pro-Obama, pro-Democrat argument, but can only attack the Republicans as “even worse”.

          We the living, meanwhile, want something better than what’s allegedly the lesser of two evils.

          (Which “lesser” is a lie anyway. It’s just evil, period.)

          1. Doug Terpstra

            Unlike liberals, I could not possibly care less about the “statements” of the powerful. I care only about actions. – attempter

            Thanks. It’s astonishing how accurate Upton Sinclair’s axiom is about subsidized blindness. tribal loyalists seem incapable of recognizing the ravenous wolf dressed in nicely-tailored wool, sadly, because their livelihood depends on it.

            For those honestly seeking to understand Obama’s true nature, Hugh has compiled an eye-opening litany of 200-plus scandals this deceitful administration has racked up in less than three years. It’s an astonishing record of regressive “achievment” that no naked GOP predator could possibly hope for. It is why the kleptocracy will brook no real competition for POTUS in 2012. Their Trojan Horse has brought them total victory right under the noses of the co-opted liberal class.


    2. Aquifer

      As i understand it SS was set up as a program that would fund itself – i.e independent of other sources, out of funds collected from payroll taxes and the interest paid on the investment of those funds. Irrespective of whether the SS fund has been robbed over the years, on paper the gov’t is making payments from funds that “are there” i.e that have been paid into the fund, that, in fact, belong to the fund backed by “the full faith and credit of the gov’t”. Somewhere around ’85(?), it appeared that the program wasn’t self funding and the payroll tax was raised so it would be.

      Now if the proceeds of the payroll tax are insufficient to fund the program or hasten the day when they will be, the funding will officially come from “general funds”, i.e. will become a welfare program subject to the whims of Congressional largesse like food stamps, etc.

      I think that is the point – this move, though not officially defunding SS, will turn it from a self sustaining program that is the product of an intergenerational contract into a “welfare” program for “old folks” at which point the gov’t is not obligated to make payouts, i.e. “owes” it nothing and its days will be numbered.

      That is the point of this exercise – if they haven’t been able to succeed in attacking it outright, as tried under Bush, they will “starve the beast” under Obama ’til it gets to the point, as Norquist puts it, where it can “reasonably” be drowned in the bathtub. Remember that the first payroll tax cut didn’t occur until Obama’s original “catfood commission” couldn’t get a majority for cuts ….

      1. Doug Terpstra

        Exactly right. I can’t quite believe Paul Tioxin isn’t savvy enough to perceive the political web here. This is the camel’s nose under the tent, forcing SS to compete with the invincible War of Terror for resources, a contest with a foregone conclusion. It’s really quite transparent. The Trojan horse strikes again, while party loyalists lie down and expose themselves.

    3. sleepy

      As I understand it, the law has always stated that social security may not be funded out of general revenues.

      Strictly speaking, I suppose one can make the argument that the general funds being used to replace the ss payroll tax cuts, are not funding ss payments since ss can still, for years, make those payments out of its own surplus in spite of the payroll tax cuts.

      1. Doug Terpstra

        Indeed, it is comingling SS taxes with general revenue in order to undercut the solid foundation that SS is solvent and self-funded for the foreseeable future. I’m surprised so many are so naive to so obvious a Machiavelllian strategy.

        1. F. Beard

          Indeed, it is comingling SS taxes with general revenue in order to undercut the solid foundation that SS is solvent and self-funded for the foreseeable future. Doug Terpstra

          So SS revenues should have converted to FRNs and stored in a huge vault till needed?

          1. Doug Terpstra

            I doubt that you need an accounting lesson. True, SS receipts are already comingled and raided, but this move is a smash and grab of the accounting “lockbox” fund. Altering 80 years of self-funding, however regressive, is step one to neolib propagandists claiming SS is truly broke and has no legitimate claim to funds essential for corporate welfare and the war state.

            Again, I’m surprised so many intelligent people fail to see the transparent Machiavellianism in this “strategery”. I suspect it is lingering tribalism. Veal pen liberals would never have acquiesced to this scam had GWB or any GOP president attempted it.

          2. F. Beard

            Again, I’m surprised so many intelligent people fail to see the transparent Machiavellianism in this “strategery”. Doug Terpstra

            I doubt Americans will ever be willing to see their old and disabled suffer want after working all their lives whether or not they contributed to SS. Their work was their contribution.

            Let the rich pay any taxes if they are needed. They are the ones who profit off the government enforced counterfeiting cartel; then let them pay for it.

            I’m inclining more and more to property taxes since they capture previous unjust income.

  8. Jobs Programs

    “Reports: Bank of America could cut at least 28000 jobs”

    Good! We need to hire interns, legal professionals and plumbers at the Justice Department and the SEC, give them the tools, and get to it!

  9. House of Usher

    Dueling briefcases, including those of the ‘less savvy’:

    “Banks including JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) may pay more to resolve claims over their alleged roles in the collapse of a $2.3 trillion mortgage- backed securities market if sophisticated investors are allowed to sue as a group along with less savvy ones. “

  10. F. Beard

    I have no problem with eliminating all taxes for the non-rich. They already pay taxes – to the rich via the government backed/enforced counterfeiting cartel, otherwise known as the banking system. Let the rich pay for the system that benefits them so much – a government enforced monopoly on private money creation.

  11. Don Levit

    Aquifer wrote:
    The government is making payments from funds that are there.
    Now, if the proceeds of the payroll tax are insufficient to fund the program, the funding will officially come from general funds, will become a welfare program.
    You seem to take the position that Social Security still works like a self-funding program.
    Roosevelt meant a self-funding program to be one where no use of general revenues was needed.
    If general revenues are making up the 2% shortfall, is the program still self-sustaining?
    Do you agree that the trust fund has been robbed over the years?
    If so, how can those same (self-sustaining) funds plus interest be in the Treasury (and spent) and in the trust fund, at the same time?
    When the trust fund is tapped, new monies must be raised either through higher taxes, lower expenses, or increasing debt held by the public?
    That means the trust fund is not a store of wealth which can be liquidated without raising new monies, AS IF THE TRUST FUND DID NOT EXIST.
    The trust fund is merely an accounting mechanism which shows how much money is available from the Treasury (new general revenues) without an appropriation.
    The same pay-as-you-go process is used to finance battleships, albeit an appropriation is needed to do so.
    Don Levit

    1. Aquifer

      Hmmm, well OK, if the program has proven to be “insufficiently funded to meet commitments” the first question i would ask is, is this true? If, in fact, it is not, i.e. it has been calculated that between input from SS taxes and interest from bonds bought by those tax inputs, there should be over a trillion bucks in the fund and, with that in mind, that it is fully solvent until, what, 2035? something like that, then who is fooling around here?

      If it is true, then the next question is, where did the money go? If Congress pulled a fast one and “stole” the money – then Congress needs to put it back. How does it do it? Oh, maybe by stopping the wars, for starters. If Congress won’t do that, then we need to change Congress!

      I confess, i really do not understand how we can accept this “the dog ate my homework” excuse.

      If the shortfall has been a result of a miscalculation as to what is needed, it seems to me the answer is to adjust (upward) the source of funding – the obvious adjustment being the elimination of the cap on the FICA taxable level. Such adjustment has been done before.

      Once we, the people, make it clear that this program is a true commitment we have made to each other as a people, and that we will, indeed, choose our Congress and our Pres with that in mind – I think they will suddenly figure out how to do it. Where there is a will, there is a way – our job is to demonstrate that they better find that “will” lickety split ….

      As long as we are willing to “accept” that “boo-hoo, the money has been stolen, it’s gone and there is nothing we can do but cry in our (cheap) beer”, the pols will continue to gut us ….

    1. Martin Finnucane

      The famous Hannibal (who, I assume, is not you) rode through a dread swamp on an elephant, caught an infection, lost an eye as a result, and still whuped Roman butt. He lost in the end, but he died fighting, and swallowed poison rather than be caught. So when do we fight back? “Hannibalists”, anyone?

  12. Hugh

    It’s interesting the evolution in how Obama and his policies are now viewed. In the past, the comments that dominate this thread would have been minority views. All kinds of excuses would have been given as to why we needed to give this a chance, there was more there than we could see, that Obama was constrained in what he could do, that he was playing a deep game that we could not understand, or look over there, Crazy Republicans.

    Now the pushback is both swift and targeted. This is a vacuous gesture in so far as its stated aim of creating jobs is concerned, but it also contains items like the employee payroll tax cut which can be used in the future (and not the too distant future since funding of this initiative is being kicked over to the Cat Food II Commission) to justify cuts in Social Security, Medicare, and Medicaid.

  13. tow

    With the payroll tax holiday, for the first time EVER, Social Security will now be linked to the deficit.

    Social Security was never before connected to the deficit,
    it had its own fund, and could continue paying retirees through 2070 with no changes of terms.

    Now that Obama has enacted the payroll tax holiday, that amount of money (that would have been obtained through normal payroll taxes) will come from the General Fund.

    Obama adopted the right wing stance and tied Social Security to the General Fund and to the deficit.

    How much clearer can it get that Obama is a Trojan plant?

    1. Doug Terpstra

      With the payroll tax holiday, for the first time EVER, Social Security will now be linked to the deficit. . . How much clearer can it get that Obama is a Trojan plant?

      Yup, but the partisans on payroll here somehow just can’t see it. From “Obama: Gut Social Security Now, Don’t Wait Till The Election”:

      Presidential candidate Rick Perry, who called Social Security a Ponzi scheme and monstrous lie, and who wants to unwind it, couldn’t have come up with a more effective plan to put his campaign rhetoric into action.


  14. Don Levit

    Aquifer asks if the trust funds actually exist; are they a store of wealth?
    Tow says that the trust funds are flush with cash, able to pay benefits until 2070.
    Please provide some reputable third party sources to back your claim, tow.
    From a paper entitled “Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2009:”
    Page 195 “At the time Social Security or Medicare redeems the debt instruments in the trust funds to pay benefits not covered by income, the Treasury will have to turn to the public capital markets to raise the funds to finance the benefits, JUST AS IF THE TRUST FUNDS HAD NEVER EXISTED.”
    Don Levit

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