want people in these difficult times to have the money to take care of their families. When they have that money, they go out and spend it. When they spend it, it creates other jobs because people have to provide goods and services for them. It has a good, stimulative impact. We do want workers to have more money in their pockets.
While this idea of lowering the payroll tax sounds like a good idea, in truth, it really is not a good idea. This idea originated from very conservative Republicans whose intention from the beginning was to destroy Social Security by choking off the funds that go to it. This is not just Bernie Sanders' analysis. There was recently—I distributed it recently at a meeting we held— a news release that came from the National Committee to Preserve Social Security and Medicare. The headline on that press release is "Cutting Contributions to Social Security Signals the Beginning of the End. Payroll Tax Holiday is Anything But." What the National Committee to Preserve Social Security and Medicare, which is one of the largest senior groups in America, well understands is that there are people out there who want to destroy Social Security. And one way to do that is to divert funds into the Social Security trust fund and they don't get there.
What the President and others have said is not to worry, this is just a 1year program—just 1 year. In fact, they say, the General Treasury will pay the difference. So the Social Security trust fund is not going to lose funding.
The reason we have a $2.6 trillion surplus today in Social Security and the reason Social Security is good for the next 29 years to pay out all benefits is because it comes from the payroll tax. It is not dependent upon the whims of the Congress and the Treasury.
The President and Republicans said: This is just a 1-year program. Don't worry.
I do worry. I worry that once we establish this 1-year payroll tax holiday, next year our Republican friends will say: Do you want to end that? You are going to be raising taxes on workers. And enough people will support that concept, and this 1-year payroll tax holiday will become permanent. And when we do that, we will be choking off, over a period of years, trillions of dollars that we need to make sure Social Security is viable and is there for our children and grandchildren.
But don't listen to me. Listen to somebody who knows a lot more about this issue than I do. Barbara Kennelly is a former Congresswoman from Connecticut. She is the president and CEO of the National Committee to Preserve Social Security and Medicare. This is what Barbara Kennelly says:
Even though Social Security contributed nothing to the current economic crisis, it has been bartered in a deal that provides deficit busting tax cuts for the wealthy. Diverting $120 billion in Social Security contributions for a so-called tax holiday may sound like a good deal for workers now, but it is bad business for a program that a majority of middle class seniors will rely upon in the future.
The headline is "Cutting Contributions to Social Security Signals the Beginning of the End."
This is not a good approach. Providing and figuring out a way that we can get more money into the hands of working people, as we did in the stimulus package, does make a lot of sense. Going forward with a payroll tax holiday is a backdoor method to end up breaking Social Security. It is not anything we should support.
Let me mention a quote from a gentleman who understands this issue very well. He understands the politics of what is going on here. His name Bruce Bartlett, former adviser for Presidents Reagan and George H.W. Bush. He recently wrote the following in opposition to this payroll tax cut. This is what Mr. Bartlett wrote:
What are the odds that Republicans will ever allow this one-year tax holiday to expire? They wrote the Bush tax cuts with explicit expiration dates and then when it came time for the law they wrote to take effect exactly as they wrote it, they said any failure to extend them permanently would constitute the biggest tax increase in history. . . . if allowing the Bush tax cuts to expire is the biggest tax increase in history, one that Republicans claim would decimate a still-fragile economy, then surely expiration of a payroll tax holiday would also constitute a massive tax increase on the working people of America. Republicans would prefer to destroy Social Security's finances or permanently fund it with general revenues—
Switch the revenue base from the payroll tax to general revenues—
than allow a once-suspended payroll tax to be reimposed. Arch Social Security hater Peter Ferrara once told me that funding it with general revenues was part of his plan to destroy it by converting Social Security into a welfare program, rather than an earned benefit. He was right.
In other words, what this issue is about is breaking the bonds we have had since the inception of Social Security where Social Security was paid for by workers. You pay for it when you are working, and you get the benefits when you are old. That is the deal. There is no Federal money coming in from the General Treasury.
This gentleman, Mr. Bartlett, former adviser to Presidents Reagan and George H.W. Bush, thinks—and I suspect he is quite right—this is the beginning of an effort to destroy Social Security.
The real debate about Social Security is not one about finances.
There has been a lot of misinformation and disinformation out there. I hear from some of my friends on the Republican side that Social Security is going bankrupt; it is not going to be there for our kids. That is absolutely not true. Social Security today has a $2.6 trillion surplus. Social Security can pay out every benefit owed to every eligible American, if we do not start diverting funds, for the next 29 years, at which point it pays out about 78 percent of benefits. So our challenge in 29 years is to fill that 22-percent gap. That it is. Can we do it? Sure we can.
President Obama, when he was campaigning, and I think he has repeated since, the very good suggestion that instead of having a cap in terms of which people contribute into the fund at $106,000, what we should do is do a bubble, and people who make $250,000 or more should contribute into the Social Security trust fund. If you did that and nothing else, you have essentially solved the Social Security problem for the next 75 years. Very easy. It is done.
So what this payroll tax holiday is doing, in my view, is pretty dangerous. I do not think enough people understand that. I think that is one of the strong reasons this agreement should be opposed.
Another reason I believe this agreement is not as good an agreement as we can get is that it provides tens and tens of billions of dollars in tax cuts for various types of businesses. I am not here to say these tax cuts cannot do some good. I suspect they can. But I think there is a lot better way to create the jobs we need than providing these particular business tax cuts.
Frankly, I think economists from almost all political spectrums—conservative to progressive—understand that if we are serious about creating the kinds of jobs this economy desperately needs and if we want to do that as rapidly and as cost-effectively as we possibly can, the way to do that is not to provide business tax cuts because right now—right now—corporate America is sitting on close to $2 trillion cash on hand. They have a ton of money. The problem is the products they are creating are not being bought by the American people because the American people do not have the money to buy those goods and services.
So if we are serious about creating the jobs we need, I think what we have to do is start making significant investments in our crumbling infrastructure; that is, rebuilding our bridges, our roads, our water systems, broadband, cell phone service, public transportation, our rail system, dams. In every single one of these areas, we are seeing our infrastructure crumbling.
The point is, if you simply ignore a crumbling infrastructure—and I say this as a former mayor who dealt with this issue—if you simply ignore a crumbling infrastructure, do you know what, it does not get better all by itself.
I know many mayors and Governors would very much like to think they could turn their backs on the infrastructure because it is not a sexy investment. It is not a sexy investment. But the reality is, if you do not pay attention to it today, it only gets worse and it costs you more money. It is like having a cavity. You can get your cavity filled. If you neglect it, as I have,
