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NTU writes in support of H.R. 3551, the "Social Security Preservation through Individual Choice Enhancement (SSPICE) Act."
February 10, 2012
The Honorable Jeff Landry United States House of Representatives206 Cannon House Office BuildingWashington, DC 20515
Dear Representative Landry:
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of H.R. 3551, the “Social Security Preservation through Individual Choice Enhancement (SSPICE) Act.” This legislation would provide taxpayers with an annual choice to have their payroll tax rate reduced by two percentage points in return for increasing their normal retirement age for applicable Social Security benefits by one month.
Throughout the debate over the so-called “extenders package,” NTU has argued in favor of continuing the payroll tax reduction that began in 2011. We have done so with our eyes open, fully aware that this policy is unlikely to have a significant stimulative effect on the economy, but with the understanding that it has provided a modest amount of comfort to many financially struggling families.
Much of the opposition to extending payroll tax relief has focused on the consequences such action will have on the deceptively named Social Security Trust Fund. But as the Office of Management and Budget made clear back in the year 2000, the “[Trust Funds] do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures.” Politically convenient bookkeeping tricks aside, Social Security is in reality one of several entitlement programs whose current trajectories are unsustainable for federal finances and the economy as a whole. Structural reforms in the not-too-distant future will be necessary to protect taxpayers from crushing burdens. Until such reforms are undertaken, the SSPICE act provides a way of allowing workers to keep more of their own money without raising taxes elsewhere.
Furthermore, NTU has long argued in favor of transitioning Social Security toward individual personal accounts, so as to empower taxpayers through ownership of their retirement assets. Although H.R. 3551 does not take so transformative a step, it is premised on the same notion: increasing freedom by providing taxpayers with more retirement options. Specifically the bill would allow workers the flexibility to select a year-long payroll tax reduction, and in the process accept an increase in their own retirement age of one month. This change would not only be useful in sluggish economic times as workers seek to increase their take-home pay, but it would also open up opportunities for taxpayers who desire more control over their retirement investments. Finally, the bill would de-politicize the highly charged debate over extending payroll tax relief, all while avoiding punitive “offsetting” tax hikes.
Although many changes to Social Security will be needed, H.R. 3551 introduces a long overdue measure of choice, allowing taxpayers to better charge over their financial futures. NTU supports the SSPICE Act, and encourages all Members of Congress to cosponsor the bill.
Sincerely,Brandon GreifeFederal Government Affairs Manager
108 North Alfred Street Ø Alexandria, Virginia 22314 Ø Phone: (703) 683-5700 Ø Fax: (703) 683-5722 Ø Web: www.ntu.org