Earlier this year, Senate Democratic Leader Harry Reid told a Capitol Hill rally that Social Security should be left alone and didn't need to be fixed. "Let's worry about Social Security when it's a problem. Today, it is not a problem," he said.
Despite sweeping Social Security reforms proposed by the co-chairmen of President Obama's debt reduction commission, Reid told MSNBC that "Social Security does not add a single penny, not a dime, a nickel, a dollar to the budget problems we have."
Tell that to Social Security's trustees.
"The irony in all of this is that if we dither long enough, ultimately we will indeed face the threat of benefit cuts being 'slashed' by a full 22 percent, according to last year's Social Security Trustees' report," Charles Blahous, one of the trustees, wrote in the Wall Street Journal last February.
"It's not a reformed Social Security system that threatens to cut benefits, but the status quo -- and our elected leaders would do well to acknowledge this reality," Blahous said.
In the meantime, Republicans are resisting Obama's plan to extend the payroll tax cut to employers, saying that would blow a huge deficit hole in Social Security's financing and the budget, too. That's why they are offering budget cuts to offset the one-year extension cost: extending the federal worker pay freeze for three more years; cut the workforce by 10 percent; and make higher-income people pay more for Medicare.
That would save $250 billion over 10 years, enough to pay for a 2012 payroll tax cut, according to the Congressional Budget Office.
But let's face facts, this is only a temporary tax cut that -- absent needed structural reform of Social Security -- will eventually have to end.
What is needed in this economy are permanent, across-the-board income tax cuts that businesses and workers can plan on year in and year out -- that will improve the bottom line for employees and employers alike.
But Obama is unalterably opposed to permanent tax rate cuts, as we have seen in the temporary, impotent tax credits contained in his bogus economic stimulus bills that have failed to lift our economy out of its recession.
So, while there are good arguments to help struggling working families by leaving a little more money in their paychecks, this is not the long-term answer to what ails this economy.
This doesn't mean that the payroll taxes should not be permanently cut in the future, but that's going to require major reforms in Social Security's structure, shrinking the size and cost of government, and overhauling the tax code to unleash needed capital investment for economic growth and job creation.
In other words, all the things that Obama and the Harry Reid Democrats now oppose.
Losing Jobs Over Ex-Im’s Expiration? Don’t Believe ItLosing Jobs Over Ex-Im’s Expiration? Don’t Believe It | Ed Feulner