There is a strong bipartisan consensus in Congress to extend both of these expiring provisions through the end of this year. However, serious differences remain over how we should pay for these expensive extensions and whether we should reform the Unemployment Insurance program.
As popular as the payroll tax holiday may be, economists disagree about its effectiveness as an economic stimulus. However, economists agree that Social Security faces serious and growing cash-flow deficits. Diverting one-sixth of payroll tax revenue away from the Social Security revenue stream creates a significant sinkhole that exacerbates Social Security’s cash-flow problems. Non-cash accounting transfers from the General Fund cannot alleviate these cash-flow problems. Last year, the U.S. government had to borrow $142 billion from investors – including foreign countries like China – to pay Social Security benefits to our seniors.
Congress must fill this sinkhole to ensure that we will be able to pay promised Social Security benefits. That’s why House Republicans are insisting that Congress must offset any loss of payroll tax revenue with actual cash savings in other areas of the government, not accounting gimmicks. House Republicans will protect this vital program from debilitating cash diversions with common sense savings that have had strong bipartisan support...
See the rest of Vice Chairman Brady's opening statement attached below in pdf format