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Never ones to allow a crisis to go to waste, even at the expense of the American people, Republicans under the leadership of Mitch McConnell, in addition to the $500 billion dollar slush fund for corporations that has (rightly) received most of the headlines, proposed replacing one of the primary revenue funding mechanisms for Social Security (the payroll or FICA tax) with deficit-funded revenue for the remainder of 2020, thus setting up a strategic basis for cutting Social Security in the future.
Democrats unanimously rejected the Republican charade as a cynical attempt to coddle their corporate base with more tax cuts at the expense of millions of retired Americans.
As noted by Jake Johnson, writing for Common Dreams, the Republican tactic was flagged by Social Security Works president, Nancy Altman, who issued a statement condemning the GOP’s attempt to take advantage of the coronavirus pandemic to punish retired Americans already staring down an economic disaster.
“Senate Republicans are using the coronavirus crisis as a cynical cover to attack our Social Security system. The proposal they released on Thursday night would allow employers to ‘defer’ their Social Security insurance premiums (FICA contributions) until next January.
In practice, if this becomes law, it is highly unlikely that Congress would ever require the employers to repay the FICA contributions. Even simply restoring them would prove difficult, since Congress would be accused of raising taxes on businesses. Therefore, this should be viewed as a cut to Social Security’s dedicated revenue.
The Republican plan would replace Social Security’s dedicated revenue with deficit-funded general revenue, but this is a trap. Once the pandemic is done, Republicans will undoubtedly use the general revenue to demand cuts to Social Security in the name of ‘reining in entitlements,’ something they have already expressed their strong desire to do. Since there are much better ways to deliver the same relief to employers, the only reason to deliver it this way is in the hope of undermining Social Security.As noted by Altman, Sen. Ron Wyden (D-OR) has proposed sending rebate checks to small businesses “to address immediate cash flow needs and replace the demand many are losing due to quarantines.” The checks would be equal to a percentage of gross receipts from a previous tax year.
As reported by Johnson, Senators Wyden, Warren (D-MA) and Schumer (D-NY) have also proposed an increase of $200 per month across the board to all Social Security recipients (including veterans, retirees and people with disabilities) until the crisis has passed. As Tweeted by Senator Warren, this would be the largest Social Security boost “in nearly 50 years” and would result in substantial stimulus to the economy as well.
There is no low that Republicans won’t stoop to to try to impose their ideological fixations to harm ordinary Americans, even in the face of an unprecedented, economically disastrous public health emergency. If this crisis is making one thing abundantly obvious, it is demonstrating which party is taking the side of the American people. Democrats shouldn’t let that opportunity go to waste, either.
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