Wednesday, December 5, 2012

Social Security: To cut or not to cut

There may be a semblance of a compromise after all. Reps Kevin Brady of Texas and Chris Van Hollen of Maryland are on a mission to save Social Security tax cuts. How they will preserve this incentive is still unknown, but their goal is to save Americans the projected $115 billion they are set to lose next year if the benefit expires. There is talk of either extending the payroll tax cut,  offering a rebate or a credit. But whatever the plan may be, the idea is to help preserve the additional discretionary income - $40 a paycheck - Americans have grown accustomed to receiving.

Employees now pay only 4.2 percent of Social Security tax, a reduction from the 6.2 percent they were paying before the measure was passed in 2010. With the economy still performing rather disappointingly, our elected leaders want to keep their constituents happy - and spending.

Predictably, Republicans in the House oppose the idea, Senate Democrats are for it while conservative members are flexible. While President Obama has shown preference for expiring the tax cut, he is hinting a desire to compromise.

So far, so good. Our politicians have started to swallow their prides and behave as adults. Now to agree on a budget...

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