This week, the Senate will take up a bill concerning extending the reduction in the amount of taxes Americans pay to fund Social Security and Medicare. The bill contemplates extension of the lower tax rate Democrats, at the urging of President Obama, put in place two years ago as a “temporary” measure to boost the economy.
Of course, as we now know, it “boosted” nothing, while at the same time it did lower the revenue collected by two federal programs that are in serious financial difficulty.
The bill pending before the Senate is nothing more than another President Obama campaign issue, courtesy of Senator Harry Reid (D. Nv.). It will never pass, but, before you “blame” the evil Republicans, you need to understand why the bill will never pass.
The announced plan is to “offset” the decreased revenues to Medicare and Social Security by a 3.25% surtax on millionaires. As best I can tell, the Senate defines a “millionaire” as an individual actually earning $1 million a year. This is unlike the President’s definition of “millionaire” which is an individual making more than $200,000 a year.
Digging down into the weeds of this bill, you learn that the revenue from the 3.25% surtax is not going to bolster Social Security and Medicare, but rather is being placed in “general revenues”, I suppose to be spent on who knows what.
The Republicans will vote against this bill, as well they should. But understand why.
Social Security and Medicare are still going broke, but will do so only faster if this bill passes. The proposed surtax is not designed to offset anything, other than other government excessive spending. Americans are still on the hook for massive Social Security and Medicare “entitlements” that we can’t begin to afford.
But, the bill’s certain defeat does make a wonderful campaign issue for the President…unless you understand what the bill actually says.