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Friday, May 04, 2007
There May Be Problems with the Baucus Amdt., But...
This today from CTJ:
Congress Considers Taking Money from Social Security to Extend Tax Breaks
... Democratic leaders in both the House and Senate initially proposed budget plans that would supposedly produce a budget surplus by 2012. The Senate plan was amended before it was passed, at the urging of Max Baucus (D-MT), to spend that alleged surplus on tax breaks [and SCHIP. The House passed their plan] without any such amendment. Few have noted that the surplus they're talking about doesn't really exist. [But see our pieces here and here, referring to 'projections'] The 'surplus' money that would be spent on tax cuts and so forth would really be taken from funds that are supposed to be used to shore up Social Security.
No one mentioned raiding the Social Security surplus when the Baucus amendment was debated and adopted, to our recollection. CTJ claims "[t]he Senate budget plan, as initially proposed, would produce a surplus of $132 billion in 2012 — but that includes the Social Security surplus. So clearly the federal government is relying on the Social Security surplus to stay in the black." How do we know this? The $132 billion projected surplus is an on-budget figure, and the full measure of spending under Baucus is closer to $180 billion. Isn't deficit financing via borrowing what Congress is considering here? There has been far more hand-wringing about the PAYGO than the Social Security implications of the Baucus amendment, if indeed any of the latter. CTJ merely assumes on a raid on Social Security:
Of course the House and Senate budget plans are far more responsible than the President's since at least they revive the "pay-as-you-go" rule, or PAYGO, which helped us balance the budget in the 1990s. But the Baucus amendment, if adopted in the final budget, will be a pledge to waive PAYGO to spend the projected 'surplus' that's supposedly coming in 2012.
Even if the Baucus Amendment is "a pledge to waive PAYGO," what evidence is there that it contemplates a raid on Social Security, an alarm unheard in these quarters?
Yes, the money spent would permit the extension of tax cuts ... but only for the middle class. As Charlie Rangel might say, "Got a problem with that?"
Actually, Charlie isn't focusing that much on disposition of the '01/'03 Bush tax cuts expiring on 2010:
I'm 76 years old. I don't buy green bananas," he said. "Who knows what's going to happen in 2010? It just doesn't make sense, with all the problems we are facing, to be discussing the extension of tax cuts that don't expire till 2010."
Posted by Dana Chasin
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