Using Social Security to Pave Roads?

by Bud Meyers, published July 18, 2015

Yesterday the Alliance for Retired Americans wrote a letter to Congress strongly opposing using the Social Security trust fund as a way to help pay for the highway funding bill, saying, “It should not be used as a piggy bank when Congress is looking for funding.”

Earlier last week the House passed a short-term highway bill; but Senate Republicans are trying to come up an $80 billion highway bill that would provide funds for several years. The Senate bill is also expected to include a provision to renew the Export-Import Bank, despite the objection of conservative lawmakers and activists. The bank has significant support in both houses, but many leading conservatives [and progressives] oppose it as “crony capitalism”.

One such way Congress plans to cut Social Security is the CUFF Act (a bill introduced by Sam Johnson R-TX), which purports to go after fugitive felons — but according to the Alliance, could actually penalize many individuals for minor offenses such as bounced checks, unpaid fines or fees, or a failure to pay a debt. Many warrants are very old for offenses that may have happened when someone was very young (even a child) — or in many cases, the individual may know nothing about it.

Another way being considered for funding a long-term highway bill would be to suspend disability benefits for individuals collecting state or federal unemployment insurance. Many Republicans have already been clamoring that disability beneficiaries should return to work — even though over 11 million workers have already dropped out of the labor force since the Great Recession, mostly because they couldn’t find jobs — and that’s in addition to another 8 million lasix over the counter others who are still officially counted as “unemployed”.

It’s also hard to understand why, with so many Americans still unemployed and looking for jobs, why additional work requirements and/or job training would be imposed on those receiving food stamps (SNAP) and/or welfare (TANF) to qualify for these benefits.

Last month, Congress also attempted to use Medicare to fund trade adjustment assistance (the program to retrain displaced workers who lose jobs because of trade deals that offshore jobs.) Now, Congress is considering using Social Security to pay for roads.

Progressive Democrats (such Senator Elizabeth Warren and others) are proposing raising the cap (or eliminating it) on income that is exempt from Social Security taxes — to not only shore up funding of the old age and disability trust funds, but also to expand Social Security. Some have even proposed taxing capital gains income for Social Security taxes (which has always been exempt).

And finally, raising the tax on gasoline would disproportionally hurt the poor and lower income wage earners — just like any other tax on consumption would — just as the wealthy investor Nick Hanauer articulates in a TED speech, “Somebody like me makes hundreds or thousands as times much as the median American, but I don’t buy hundreds or thousands of times as much stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and shirts a year like most American men. Occasionally we go out to eat with friends.”

If Congress wants to raise money to fix roads (and upgrade all our crumbling infrastructure), they could consider taxing capital gains and dividend income at the same rate as they tax regular wages.