WASHINGTON – Sen. Mike Johanns (R-Neb.) today announced his opposition to legislation extending the payroll tax holiday, among other provisions, due to growing concerns over government debt and the future of Social Security. The cost of the payroll tax reduction is not offset, adding almost $100 billion to the deficit over the next ten months while accelerating the Social Security program's path toward insolvency.
"While I am glad to see a fully paid-for Doc fix, as a whole this bill constitutes the fiscal irresponsibility which continues to drive our debt crisis," Johanns said. "I understand the argued short-term popularity of extending the payroll tax holiday, but this is far outweighed by the long-term damage it will do to our fiscal health and to the viability of Social Security. There is simply no way our children and grandchildren will be able to afford what we've put on our country's credit card when they have to pay the bill."
The payroll tax holiday, originally passed in December 2010 to provide short-term tax relief, cut the amount individuals contribute to the Social Security trust fund from 6.2% to 4.2%. According to a May 2011 report by the Medicare and Social Security Trustees, the Social Security Trust Fund will become insolvent in 2036; further depleting this fund accelerates this timeline.