Urge Congress to Amend Lopsided Tax Package and Protect Social Security

BACKGROUND:
The agreement reached by President Obama with Republican leadership, including a two-year extension of tax cuts for the wealthiest in return for a one-year extension of modest tax credits and unemployment insurance for families decimated by joblessness, is the wrong way to stimulate our economy.

The payroll tax holiday is particularly troubling for women, who rely more on Social Security than men do. The "holiday" benefits higher income people more than those in the middle or bottom, excludes retirees -- including those forced into early retirement due to joblessness -- and excludes state and local government workers at a time when they are facing a pay freeze. Worst of all, it slashes Social Security's dedicated funding stream -- something Republican leaders and other anti-New Deal forces have wanted to do for decades.

Choking off Social Security's dedicated funding stream threatens its long-term integrity, and breaks faith with the workers who have paid into the system so that it would be there for them when they are no longer working. We must do everything we can to protect this critically-important and highly popular retirement and disability income insurance program that keeps millions of middle-class women out of poverty.

The White House insists the payroll tax holiday will last only one year, but that's doubtful. Unemployment insurance (UI) benefits have only been extended for a year; if unemployment is still near double digits at the end of 2011, conservatives hostile to Social Security are likely to hold UI benefits hostage for an extension of the payroll tax holiday. This scenario could be repeated for years if the economy continues on its slow-growth path -- and a continued choking off of Social Security's dedicated funding stream would seriously threaten its long-term viability.

The White House also claims it will replace Social Security's lost revenue, which is estimated to be $120 billion annually, out of the General Fund. But if General Fund money is available, then it should be used directly for a stimulus plan that would put cash in the hands of those most likely to spend it quickly. There simply is no reason to raid Social Security in the name of economic stimulus.

Better proposals exist for stimulating the economy without slashing Social Security's dedicated funding stream. For example, the president's successful Making Work Pay program could be doubled, giving everyone who earns at least $5,000 per year a benefit of $800. In addition, Rep. Brad Sherman (D-Calif.) has proposed sending workers a one-time payment, out of the General Fund, in an amount equal to what they would receive through a payroll tax holiday. Both of these proposals are at least as stimulative as the payroll tax holiday, without slashing Social Security's dedicated funding stream.

The President's tax package also allows income inequality to continue growing. This will result in more pressure to cut programs that employ and serve women disproportionately, including education, health care, child care, domestic violence prevention and other social programs. We urge you to send a message to your congressional delegation to protect Social Security and provide for another method to put money directly in the hands of middle- and lower-income families.

Take Action NOW!

Tell your friends about this action alert.