By: Mary Mostert, Analyst, Banner of Liberty (www.bannerofliberty.com)
March 29, 2001
Does anyone remember the Democrat attack on the Bush Tax Cut plan as only being enough to buy a muffler, for the middle class but the rich could buy a Lexus with their tax cut? And, who remembers the Democrats concern about the tax cut reducing funds for Social Security? That was only in January, folks.
In two months we have the Democratic Socialists of America in the "Progressive Caucus" bragging about being the source of their latest idea - a $300 per person, or $60 billion tax cut that is being touted by the media as an alternative to Bush's 1.6 trillion permanent tax cut. Apparently they like the idea of everyone in America being able to buy a muffler, at least once in their lives.
CNN now tells us:
PROGRESSIVE CAUCUS THE REAL FIRE BEHIND THE TAX REBATE PLAN (news)"What idea has Joe Lieberman stolen from Bernie Sanders? Lieberman came up with a proposal and when Tucker and I heard it, we thought, this sounds familiar. Sure enough, we went back and we looked at the tape at one of our earlier shows. Here is Joe Lieberman with his idea and then you will see where he got it. Please listen up: (Lieberman) "I would divide the 60 billion by the almost 200 million Americans who paid income or -- and I stress -- payroll taxes last year. And send each and every one of them a $300 check." (Sanders) "We are saying that we will give every American $300 a year if underlying, there is a surplus."
I guess he takes his policy cues from Bernie Sanders."
CNN's The Spin Room, Bill Press/Tucker Carlson, 3/26 http://www.cnn.com/spinroom
Last year Bernie Sanders was the Chairman of the Progressive Caucus that is part of the Democratic Socialists of America. Now, if I understand the socialists correctly, what they are talking about is a $300 per person rebate, not out of income taxes, but paid for out of social security taxes? Their $300 per person would go to people who paid no income tax, but did pay social security taxes, and that pretty much includes everyone.
And, sure enough, $300 would buy a muffler for your car.
How come this turn-around in a two month period, after their opening salvos about the Bush Tax Plan? First, Alan Greenspan endorsed the idea of a tax cut, and second, many people in the Democrat base would like to receive a tax cut, contrary to what Dick Gebhardt and Tom Daschle keep saying. Throughout the election campaign the Democrats and the media kept telling us we didn't want a tax cut.
When that failed to convinced, they dragged out the class warfare argument - that the "rich" would get the largest cuts. That's true, of course. The rich pay the largest amount of the taxes, so they would naturally get a larger among of taxes they paid returned.
Let us suppose that the Democrats are successful and manage to push through a bill in which people who do not even PAY taxes on income, since their income is not high enough, will get a "rebate" on their social security tax. Why happens then to the Social Security trust fund? Should Social Security trust fund money be used to stimulate the economy?
Back in the 1950s, as money came into the treasury for the Social Security program, it was transferred to the Federal Old Age and Retirement Benefit fund. Not that the Democrats didn't dip into it on a regular basis, but they did have to borrow it from the Trust fund.
To make the deficits look less like deficits, sometime in the Lyndon Johnson administration, the method was changed so that Social Security Trust Funds were treated exactly like other taxes, and put into the general fund. The 1967-68 U.S. Budget showed a total of $164.4 billion in receipts, including the entire amount of the FICA taxes, $24.5 billion, and unemployment taxes, $606 million. The Johnson Administration spent $194.1 billion, meaning they spent ALL the social security and ALL the unemployment funds and still had to borrow another $27.7 billion to make ends meet.
The reason why there is a problem now with Social Security is because, over all those years the Democrats controlled both the White House and the Congress, they spent every nickel that came into the Social Security Trust fund - plus. And, I have to point out, the voters who voted in all those Democrats who were busy spending their constituents retirement funds are mostly ON Social Security these days and can get really upset if anyone suggests that they might not get what they were counting on in their retirement.
Throughout the world, especially in the former USSR, people who counted on having money in their retirement are finding that either inflation or the collapse of their governments have made that money evaporate. The Democratic Socialists of America's suggestion that people get a "rebate" from their FICA and unemployment taxes could cause some real problems downstream. Yet, I know of no mainstream media source that has pointed out that a rebate on payroll taxes is essentially a rebate on Social Security funds.
What happened to all those campaign promises to "not touch" Social Security Trust Funds again?
To comment: mmostert@bannerofliberty.com
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