By Mike Lillis - 09/09/11 03:58 PM EDT
House Minority Leader Nancy Pelosi (D-Calif.) on Friday backed President Obama’s plan to extend and expand a payroll-tax holiday, despite liberals’ concerns that the move will damage Social Security.
Pelosi said said that, despite the opposition from many in her caucus, “there’s a comfort level as to what [the extended tax cut] will achieve.”
A long list of liberal Democrats have hammered Obama’s plan to extend the 2011 payroll-tax holiday for another year, through 2012. The lawmakers warned that such a move steals from Social Security funding and threatens future senior benefits.
A number of those lawmakers said Thursday that they’d continue to fight the extension, particularly because Obama is proposing to expand it to include employers as well as workers — a benefit not currently in place.
“It’s imperative that we do everything we can to put money in the pockets of consumers,” said Rep. Ted Deutch (D-Fla.). “But there are a lot of ways to do it that [don’t] take from the funding stream for Social Security.”
Deutch vowed to “continue the fight” to kill the provision.
Rep. Peter DeFazio (D-Ore.), another critic of the tax break, said the latest proposal “jeopardizes the future of Social Security, and we’d have to borrow more money to pay for it.”
But many other Democrats said the payroll-tax holiday is a good strategy for creating jobs by boosting consumption.
“I’m not a big fan of this,” House Minority Whip Steny Hoyer (D-Md.) said Thursday night. “But in the short term we need to get money into the hands of businesses and consumers. And this is a good way to do that — in the short term.”
Rep. Steve Cohen (D-Tenn.) sounded a similar note.
“If you don’t have purchasers and consumers, you can’t make the economy grow,” Cohen said. “Social Security is in much better shape than people think it is.”
Republicans, despite urging sweeping tax cuts as an economic stimulus strategy, have nonetheless balked at the extension of Obama’s payroll-tax holiday extension. The GOP critics say the temporary nature of the cut would lend a false boost to the economy — one that would dissipate when the benefit expires.