December 08, 2011

Manchin Votes Against Two Measures That Would Jeopardize Social Security

Washington, D.C. — U.S. Senator Joe Manchin (D-W.Va.) today voted against a second round of payroll tax cut extensions that would take hundreds of billions of dollars out of the funding stream for Social Security. 

“I truly believe that we need to do everything we can to put money back in the pockets of hardworking families, and I’m open to plenty of options for doing just that – but I won’t jeopardize Social Security,” Manchin said. “Supporters of these proposals call them a temporary tax cut, but there’s nothing temporary about taxes in Washington – whether it’s increasing them or decreasing them. Supporters also say that they’ll repay Social Security from our federal government’s general fund, but I'm not going to put the decision to pay back Social Security in the hands of the very same politicians who put us $15 trillion in debt.” 

“I want to make our tax system more fair and tell the wealthy that they have to pay their fair share. I don’t want to undermine the one government program that Americans truly believe in: our Social Security.” 

Background:

Payroll taxes are dedicated to Social Security. In 2010, Americans’ payroll taxes were reduced from 6.2 percent to 4.2 percent. Social Security had a $49 billion shortfall in 2010. 

If the payroll tax cut is extended, the Social Security Trust Fund would get hundreds of billions of dollars less in revenue. Under the proposals that failed today, Social Security would have been reimbursed from the general fund, which is supposed to be used for government operations. 

Then Congress would need to make up the shortfall in the general revenue fund. Different parties proposed different ways of making up that shortfall, but none of those ways reimburse the general fund in the same year they’re withdrawn. In fact, some of the proposals take as long as 10 years to pay off the shortfall in the general revenue fund. In the meantime, the Treasury Department has to make up that revenue somehow. 

As of today, the United States is already $15 trillion in debt. For additional facts about the damaging impact of the payroll tax cut extension, please see the attached document. 

Legislative Background:

Democratic bill (S. 1944):

  • The Democratic version of the payroll tax cut extension bill would have cut employee contributions to 3.1 percent. It would have cost $185 billion. 
  • The bill failed, 50-48. 
  • Senator Manchin voted against the bill. 

Republican bill (S. 1931): 

  • The Republican bill would extend the current 4.2 percent payroll tax rate for employees for another year, through the end of 2012. It would have cost $120 billion. 
  • The bill failed 22-76.  
  • Senator Manchin voted against the bill. 

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