WASHINGTON — Nervous that Social Security seems under siege from all sides, congressional liberals on Wednesday proposed raising the payroll tax that funds the program, but only for people earning more than $250,000 a year.
The legislation is designed to keep the pension program solvent for the next 75 years, which is the standard used by government actuaries, by putting an additional $6.5 trillion into the Social Security trust fund over that period. The plan also is intended to head off other efforts to overhaul the program or trim benefits, or to use its funds to help pay for debt reduction.
“No more discussion about raising the retirement age, no more discussion about cutting benefits, no more discussion about privatization,” said Rep. Peter DeFazio, D-Ore., one of the sponsors.
With Republicans making opposition to tax increases their mantra, the measure seems to have little chance of enactment.
Nonetheless, it gives liberals a chance to underscore their support for the widely popular program at a time when President Barack Obama has proposed cutting the payroll tax to help create jobs and GOP presidential contender Rick Perry, the Texas governor, has called its finances a “Ponzi scheme.”
The bill’s sponsors noted that during his 2008 presidential campaign, Obama proposed raising the payroll tax on people earning over $250,000. He’s discussed the idea as president but has yet to offer legislation following through on it.
Currently, workers and their employers each owe a payroll tax of 6.2 percent of a worker’s wages up to $106,800 a year. That tax would also be imposed on wages above $250,000 under the liberals’ plan. Other sponsors include Sens. Bernard Sanders, I-Vt., Barbara Boxer, D-Calif., and Sheldon Whitehouse, D-R.I.
In an effort to boost consumer spending and create jobs, Obama last week proposed paring the 6.2 percent payroll tax on employees to 3.1 percent next year and cutting the payroll tax for employers as well. He would replace the revenue Social Security would lose with money from the government’s overall budget.
That plan has split liberals. Sanders said he opposes it because it would make Social Security more vulnerable to budget cuts. Boxer said she favors it because it would create jobs while protecting Social Security.
In debt reduction talks between Obama and House Speaker John Boehner, R-Ohio, this summer, they discussed a plan to slow the growth of Social Security benefits that they never embraced. In 2005, President George W. Bush proposed letting recipients turn part of their Social Security nest egg into stock market investments. The idea went nowhere.