Social Security is a government benefit countless people depend on. This is true for those who have already retired, are approaching retirement, or are just starting out in the work force. Those who are fully retired depend on Social Security payments to help sustain their livelihood. Unfortunately, future generations may not have this luxury.
The price of living continues to rise as incomes and Social Security benefits remains relatively the same. This means the general population will need to find other ways of supplementing their bank accounts. In the future, the framework of Social Security may resemble a combination of a 401(K) plan and a safety net for those in need.
Another factor which influences Social Security is commonly known as the payroll tax cut. The payroll tax cut was passed in the year 2010. For lower wage-earners, the tax cut does not make that much of a difference when it comes to take home pay. Individuals who earn considerably more do notice a difference. Congress recently extended the tax cut which, as usual, causes conflicting views in the political world as well as the general public.
Politics tends to be a topic where a lot of varying laws are involved that are not fully understood. People have a tendency to hypothesize and evaluate when all of the facts are not clearly understood. The topic of Social Security benefits is one that hits home with nearly everyone. This is part of the reason why so much attention is given to the payroll tax cut.
On Monday, leadership of the House GOP announced its intention to support an extension of payroll tax cuts through the end of 2012. This, of course, will affect 2012 taxes. The GOP plans on offering its support without insisting on offsetting cuts or including unrelated policies in the bill. This bill will likely pass well before its deadline without much argument, which is something that has not happened in Congress for quite a while.
Democrats and Republicans aren’t completely happy with the extension of payroll tax cuts deal, however. The bill is more of a backup plan to keep the tax cuts in place for 2012 taxes while Congress wrestles with other issues. Ongoing negotiations include discussions about unemployment insurance and offsets.
There are a number of reasons for the unconditional offer. One is that the Democratic party holds the upper hand on this issue by accusing the GOP of hurting workers who are already hurting financially. There is also evidence that eleventh hour negotiations on fiscal policy helps no one and Americans are getting tired of these types of games. It could also be a tactical move. The GOP may think that if they give a little on this issue, they will be in a better position to push through challenges to Medicare reimbursement rates or to stop unemployment insurance extensions. It could also be a combination of all of these reasons.
Even with GOP support, extension of payroll tax cuts is not set in stone. It may not have the support it needs from conservatives or the Democrats might not support the bill if it does not have a provision for extending unemployment insurance. Even so, it is remarkable that the unconditional offer was even put on the table.