Politicians generally are ignorant about the payroll tax. The McCain insider who said a payroll cut would cause no problem did so because he thought that the senator proposed that during his 2000 candidacy. In fact, McCain had proposed a 20 percent diversion of the tax's proceeds to fund private accounts, an idea that is now a political dead letter. Sen. Barack Obama has been described in the press as advocating a payroll tax cut, but that is not true, either. His tax plan would try to ease payroll pain with a $500 income tax credit.
Even Republican advocates of cutting the payroll tax talk about offsetting it with reduced future benefits. That's a bargain young workers would buy in a minute, and current Social Security recipients would be assured that their pensions would not be reduced one penny. Nevertheless, Democrats would feast on any Republican hint of slashing old payments.
The perceived need to offset payroll tax revenue losses stems from belief that the Social Security fund must be replenished. The truth is that there is no such fund, and the heavy payroll tax revenues resulting from the Greenspan Commission's 1983 "reform" not only provide enough money for Social Security but fund other programs, as well.
As part of Democratic obsession with making a progressive tax system still more progressive and redistributing income, Obama actually would raise the $97,500 cap on the payroll tax, and his $500 tax credit would not change payroll tax withholding for employee or employer. There is an open field for John McCain, if he has the wit and will to enter it.