Friday, December 07, 2012

Lift the Social Security Payroll Tax Cap

Republicans such as Paul Ryan have advocated over either cutting Society Security or raising the retirement age. In Washington, people like to portray themselves as courageous by cutting benefits from the country's most needy. Rep. Ted Deutch has the easiest solution that both parties from Congress run from. Eliminate the $113,700-a-year cap on Social Security payroll taxes.

A bill by Deutch has a sponsor in the Senate; thanks to Sen. Mark Begich. Deutch'sbill has unsurprisingly gotten no traction in the House.

The bills also would increase cost-of-living raises by basing them on the Department of Labor’s Consumer Price Index-Elderly, or CPI-E. The “elderly” index, they say, better reflects how seniors and the disabled spend their money on medical care, prescription drugs, housing and energy. Some of those costs go up faster than the official inflation rate.

Republicans are attempting to lower the cost-of-living raises. That would mean smaller Social Security payments seniors.

Begich took to the floor of the Senate to talk about lifting the cap.

“This bill isn’t just about providing our seniors the security they need and deserve, it’s about common-sense fiscal planning,” Begich said. “By creating a more fair and balanced system, we can increase benefits to our seniors, extend the solvency of the program, and give so many Alaskans peace of mind for their future.”

Begich's and Deutch's bill makes perfect sense. Which is exactly why the Beltway will hate it.

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