The plan cuts the payroll tax, temporarily, by one-third. All well and good except Republicans have been very clear they intend make the one year "tax holiday" permanent.
Currently, payments into the Social Security Trust Fund are split, half from the employee and half from the employer. This breaks that balance and it won't take long before the Republicans in Congress to start complaining that imbalance is unfair to small businesses (like Exxon-Mobil). The next step will be to cut the employer tax as well.
So, we have now cut Social Security income by one-third and there are four options.
- Do nothing and the Trust Fund will be exhausted in eight to ten years.
- Replace the lost funds from general revenue, which makes it a zero-sum game where other taxes are raised so the Social Security tax can be cut (And does anyone believe Republicans will sit still for that?)
- Borrow money to fill the gap. Except we are trying to cut the deficit, not balloon it so, really, we are back to #2 above.
- Cut Social Security payments by one-third. Actually that would be more like 40% when all shortfalls are considered.
They say that only an anti-Communist like Richard Nixon could have opened the door to Red China. Perhaps, only a Democrat could accomplish that long sought Republican goal of ending the Social Security program.