Social Security actuary blesses payroll tax bill

Social Security’s chief actuary said a Democratic payroll tax extension bill would have no effect on the program’s finances.

The blessing is being used by supporters of the tax holiday to try to convince members worried it weakens Social Security. That perception is especially strong in the House GOP conference.

Actuary Stephen Goss sent a Tuesday letter to Treasury Secretary Timothy Geithner and Budget Director Jack Lew giving his thumbs up.

“We estimate that the enactment of this bill would have a negligible effect on the financial status of the Old Age and Survivors Insurance and Disability Insurance (OASDI) program in both the near term and the long term. We estimate that the projected level of the OASI and DI Trust Funds would be unaffected by enactment of this provision,” the letter states.

The letter notes that the 3.1-percent rate reduction in payroll taxes collected from employees is offset by a transfer of funds from the general Treasury.

Some critics of the payroll tax holiday, such as Sen. Tom Harkin (D-Iowa), acknowledge that Social Security is made whole by the general Treasury, but say that by making the program dependent on the Treasury it makes it harder for Democrats to say that Social Security hasn’t contributed a dime to the deficit.

“Those who would oppose my legislation now have one less excuse to block this much needed boost for the vast majority of Americans,” Sen. Bob Casey (D-Pa.), sponsor of the bill, said of the letter.