[Congressional Record (Bound Edition), Volume 157 (2011), Part 13]
[House]
[Page 18990]
[From the U.S. Government Publishing Office, www.gpo.gov]




            SQUARING SOCIAL SECURITY AND THE PAYROLL TAX CUT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
California (Mr. McClintock) for 5 minutes.
  Mr. McCLINTOCK. Madam Speaker, topping the list of unfinished 
business this year is the impending collision of two closely related 
crises: the expiration of the payroll tax and the acceleration of 
Social Security's bankruptcy.
  Last year, Congress voted for a payroll tax cut that averages roughly 
$1,000 for every working family in America. As warned, it failed to 
stimulate economic growth and it accelerated the collapse of the Social 
Security system; but, as promised, it threw every working family a 
vital lifeline in very tough economic times.
  We need to meet three conflicting objectives: We need to continue the 
payroll tax cut; we need to stimulate real economic growth; and we need 
to avoid doing further damage to the Social Security system.
  First, we need to understand that not all tax cuts stimulate lasting 
economic growth. Cutting marginal tax rates does so because it changes 
the incentives that individuals respond to; cutting inframarginal tax 
rates, such as the payroll tax, does not. But that payroll tax cut did 
make a huge difference in the ability of working families to make ends 
meet in a time of declining family incomes and steadily rising prices. 
To restore that payroll tax rate today, given the economic pressures on 
working families, is simply unthinkable.

                              {time}  1020

  Yet at the same time, the payroll tax is what supports the Social 
Security system. Last year, that system entered a state of permanent 
deficit, and this condition will worsen until the Social Security 
system bankrupts in 2036. At that moment, every retiree will suffer a 
sudden and permanent drop in benefits of roughly 25 percent.
  Further reducing the revenues into that system will hasten this day 
of reckoning. Just as bad, in the intervening time the expanding Social 
Security deficit will heap growing burdens on the Nation's already 
staggering public debt. Now, some have proposed paying for the 
inframarginal payroll tax cut that doesn't help the economy with a 
marginal tax hike that actually harms the economy. Surely we can do 
better than that. Actually, Congressman Landry of Louisiana has done 
better, and I commend his proposal to the attention of the House. It 
avoids damaging the Social Security fund while at the same time 
offering families continued relief from crushing payroll taxes.
  His measure, H.R. 3551, the Social Security Preservation Through 
Individual Choice Enhancement (or SSPICE) Act, constitutes the most 
realistic and innovative approach to these twin and related crises that 
has yet been placed before Congress by linking the cost of Social 
Security to the benefits that it provides. H.R. 3551 would give every 
American the choice of paying a lower payroll tax each year in exchange 
for working a month longer. That's all it would take to pay for 
itself--a month's delay in retirement for a year's worth of tax relief.
  For the first time, individuals can make this choice to pay a lower 
payroll tax based on their own circumstances without further 
undermining the fiscal integrity of the Social Security system or the 
financial security of those relying on that system. For the first time, 
costs and benefits would be linked in a manner that all consumers can 
understand and judge for themselves based on their own circumstances.
  In a difficult year like this, I think most families would rather 
save the extra tax and work the extra month. In better times ahead, 
they may choose to pay the extra tax to maintain their retirement 
schedule. But it will be their choice based on their needs, their 
plans, and their best judgment, and not the government's. And by 
linking costs with benefits, it will protect the long-term actuarial 
soundness of the Social Security system, a fact that the Social 
Security system's chief actuary has confirmed.
  I'm excited to cosponsor Mr. Landry's bill and strongly and 
enthusiastically recommend it to the membership of the House and to the 
leadership. Mr. Landry has done an enormous service to every retiree 
who depends upon the Social Security system, as well as to every 
working family struggling in America, by preserving the fiscal 
integrity of the system while at the same time giving every American a 
choice that links the tax they pay to the benefits they receive. And 
it's an option they can exercise every year without fear that a future 
congressional act or failure to act might sock them with a tax increase 
they can't afford or hasten the collapse of a retirement system that 
many depend upon for their economic survival.

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