Word: moynihan
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Under the existing law, American employers and employees this year will each pay a flat Social Security payroll tax of 6.2% on wages up to a cap of $53,400. Moynihan's proposal would cut the tax to 5.7% on July 1 of this year, to 5.5% in 1994, and to 5.2% in 1996. After five years, workers would pay only what is required to meet the benefits payments for that year's Social Security. With some workers saving up to $2,300 each during the transition period, says Moynihan, their added spending would stimulate the economy and create jobs...
...rich." Says he: "We should be debating tax cuts, but we shouldn't mess with Social Security. The system isn't broke: don't fix it." The plan's critics argue that it could cost the federal government $50 billion a year in lost revenue, a claim challenged by Moynihan...
...Democrats will try to argue that they are the party of ordinary Americans, while casting the Republicans as champions of the rich for supporting a capital-gains tax cut that would mainly benefit families with annual incomes of $200,000 and up. Although the Bush Administration officially opposes the Moynihan tax cut, some Republicans are trying to head off a potential political bonanza for the Democrats by supporting the idea. A number of them also favor the tax cut on ideological grounds, claiming that it will shift resources from the public to the private sector...
...coalition of strange bedfellows is starting to line up behind Moynihan's plan. The bill's co-sponsors include liberal Democrats, like Hawaii's Daniel Inouye and Rhode Island's Claiborne Pell, and conservative Republicans, like Orrin Hatch of Utah and Steve Symms of Idaho. But Moynihan still faces obstacles -- not least the Democratic House leadership. Pointing to the yawning federal deficit, House Ways and Means Committee chairman Dan Rostenkowski argues that "the last thing we should be doing is cutting taxes." Speaker Tom Foley remains on the fence. Senate majority leader George Mitchell, initially cool to the Moynihan plan...
With powerful forces building behind it, Moynihan's latest payroll-tax- reduct ion proposal stands a good chance of surviving -- but only if it can get as far as a Senate-House conference, which could happen by June. President Bush would then face the difficult choice of signing a bill -- and handing the Democrats a political victory -- or enraging voters by vetoing a law that would cut taxes for some 132 million American workers and 6 million employers...