In mid-February, during the run-up to the extension of the two percentage-point cut in the Social Security payroll tax to year’s end, the White House, using garbled language sadly not unusual for this bunch, claimed that:
Currently, 160 million Americans benefit for the tax relief that’s set to expire at the end of the month. The typical family saves about $40 with every paycheck.
Neither statement, even after grammatical correction, is anywhere close to being true. We can add both to the pile of falsehoods which will be as thick as a major metro area phone book by the time they’re all done.
A commenter at another site gave Team Obama’s penchant for quickly disseminating and perpetuating persistent fibs while fiercely resisting attempts at correction an interesting term to remember and employ: “viral lying.” The administration’s mendacity on the Social Security tax cut certainly exemplifies it. Meanwhile, establishment press lapdogs, who routinely invented alleged “lies” which weren’t lies at all during George W. Bush’s eight years, have allowed both howlers above to slide with little if any objection, missed glaring inconsistencies in messaging, and have occasionally been duped themselves.
Let’s start with the “160 million Americans” claim. There are at least two problems with it:
- According to the 2011 annual report of Social Security’s Trustees, “an estimated 157 million people had earnings covered by Social Security and paid payroll taxes” in 2010. Augmented by the economy’s tiny 2011 improvement, that number probably was about 160 million last year. But this does not mean that 160 million Americans are “currently” working. As of January’s employment report, using the more inclusive Household Survey, total employment, including self-employment, was only 141.6 million.
- Additionally, not all workers are forced to participate in the Social Security train wreck. At the Coalition to Preserve Retirement Security, which should really call itself the ”Don’t Force Us to Join Everyone Else’s Bankrupt System Coalition,” the organization’s mission statement tells us that “6.6 million public employees are covered by state or local plans in lieu of Social Security.” Other exempt persons “currently” working would include certain students, federal employees hired before 1984, and members of a few religious groups.
Thus, the administration has overstated the number of American workers who will “currently” benefit from the tax cut by roughly 20%.
Obama’s “$40 per paycheck” for “the typical family” assertion is a far worse fairy tale.
The statement is only true in very narrow circumstances, namely single-earner households where the person employed makes $52,000 per year in taxable Social Security wages and is paid every two weeks. The trouble is, according to a 2009 human resource consultant’s presentation, most employees (though I believe it’s a bare majority) are paid weekly (note the spelling; almost everyone thinks they’re paid “weakly,” but I digress). Workers paid every seven days who are unfortunate enough to actually buy the administration’s “$40 per paycheck” fib, in conjunction with White House statements that “the typical family” earns about $50,000 a year, are being misled into believing that the tax cut is far bigger than it really is. A worker paid weekly will only see an extra $40 in each paycheck if he or she makes a far from weak $104,000 per year, which is hardly “typical.” A two-income couple making a combined $50,000 per year where both are paid weekly might actually believe that the tax cut will give them a total of $80 every week in their two paychecks. Don’t spend it, folks, because you’re not going to see it.
On February 14, the White House blog trumpeted how “The President was joined by Americans who have shared what $40 a paycheck means to them, and who would be affected if Congress doesn’t act.” There is virtually no chance that everyone pictured at the gathering is really receiving $40 more in each paycheck as a result of the cut.
Even administration officials can’t keep their story straight — or they are deliberately allowing distortions which create an exaggerated impression of the tax cut’s impact to appear. White House spokesman Jay Carney has twice claimed that the cut involves “$40 a week.” A White House sob stories blog post contains at least three entries showing that some respondents undoubtedly thought that $40 a week was the amount at stake:
- “$40 a week, quite simply, is the difference between my son having what he needs and not having what he needs.”
- “We can’t afford to lose $40.00 a week.”
- “It’s simple. $40/week is over $2,000.00 per year which low income families need to provide housing, rent, food and necessities for their children, especially those who are in school in rural areas.”
Over two dozen of the entries refer to how $40 would help pay for gas. It turns out that for many two-car families, the tax cut won’t even pay for the increase in the price of gas since Christmas.
Not that it’s particularly difficult, but the press has also been fooled. At ABC’s Political Punch blog, Mary Bruce touted Obama’s “victory lap” after the related bill’s recent passage, and wrote that the tax cut “will help middle-class Americans by providing an extra $40 a week in their paychecks.” Anna Fifield at the Financial Times also bit. David Espo at the Associated Press did a Certs imitation (two errors in one sentence) when he wrote that the cut means “an extra $20 a week in the average American paycheck.” No, David. With the multiplicity of pay frequencies, there is no such thing as an “average American paycheck.” Also, gross pay per week in the “average paycheck” is almost $900, leading to a tax cut of roughly $18 per week; the median is $718, a cut of a bit more than $14.
For all the huffing and puffing, this particular propaganda effort probably won’t have much impact on public opinion. When the National Credit Counseling Foundation asked people what they did with their tax cut last year, “Two-thirds said they didn’t even realize their paychecks were larger.”
The administration’s actions, with the unfortunate acquiescence of House and Senate Republicans, are hardly consequence-free. For a second consecutive calendar year, the federal government’s budget deficit will be over $100 billion higher than it otherwise would have been because of a tax cut built on viral lies which will stimulate nothing but the rise in the debt burden future generations will inherit.
“For all the huffing and puffing, this particular propaganda effort probably won’t have much impact on public opinion. When the National Credit Counseling Foundation asked people what they did with their tax cut last year, “Two-thirds said they didn’t even realize their paychecks were larger.”
And that’s usually the case with government rebates. You usually don’t even know you’re getting it, and they certainly are not worth the cost to the country as a whole. I’m just getting sick of it. By giving you basically nothing, it gives Obama and the Democrats a talking point for the election. What a Republican candidate should be saying is, “Where’s the savings,” or better yet, “Where’s the beef?” Remember that line? I think it would work now just like it worked back then. “Where’s the beef?”
Its all about perceptions and imaging. It allows Obama to go around the country and give speeches in which he says he got you an extra $40. You’re not supposed to notice the skyrocketing cost of everything else. And your’re not supposed to realized that Obama help to gut the financing for Social Security.
Just consider all part of the fakery that is Obama. Fake Greek columns (was it a foreshadowing of our own Greek bankruptcy?), fake presidential seal, and fake compassion, all the while screwing the middle class back into poverty.
Tom, Progressives do not believe in the traditional family, especially when it suits their purposes. A stay at home mom is so 19th century, you know. I believe that’s were the $40/wk comes from. 2×20. Now, take that $40/wk x 52 weeks and what do you have? A little pile of real money. Maybe enough to pay off a credit card or go on a vacation and pay cash.
See, that’s the problem with everyone understanding of money these days. We all want the homerun immediately. Instant gratification, right? But, small budget steps can make a large difference in your personal budget over the long haul. Folks that miss these opportunities will never have golden years.
Now here’s the cynical side of this. The faster we run social security into the ground and put it out of its misery, the better off we will all be. It was the worse progressive scam of the 20th century (even worse than AGW) and needs to be ended. The irony is that it created the republican’s dependent class but that’s a topic for another day.
I get what you’re saying, but then it takes two paychecks to get to the $40. So “$40 per paycheck” is still bogus.
I don’t have any idea what my pay “increase” was but in response to the cut in my forced contribution to a government run retirement scheme that I loathe and want out of, I increased my 401k contribution by a corresponding amount.
If you want to criticize the White House’s garbled language then you should start with “Payroll Tax Cut“. It is not a tax cut, it’s a tax holiday or a tax suspension. A tax cut is permanent (at least until action is taken to raise taxes) while a holiday is temporary and of short duration and expires on its own. A tax holiday has no material impact, other than political gain, because you can’t factor it into your long term plans. It’s like an “annual” Christmas Bonus that you get every 3 to 19 years. It’s nice when you get it but you can’t count on using it to make your next mortgage payment. The payroll tax “cut” is purely political, it allowed the President to claim that Republicans were “raising taxes on the poor” by not extending the holiday that accomplishes absolutely nothing in the broader economy. And the GOP proudly spent more money we don’t have while proclaiming “We won’t allow the President to play politics during a political season.”
But the broader question is if the President was so keen on cutting taxes and so effusive about putting money in the pockets of the middle class then why didn’t the GOP say fine, we’ll cut income taxes across the board by 50%, eliminate the Corporate Income Tax and eliminate taxes of dividends? Why didn’t the GOP use the occasion to advance sound fiscal policy that would actually stimulate the economy? Yeah, yeah, we all know the answer – there’s less opportunity for graft in sound fiscal policy.
“If you want to criticize the White House’s garbled language then you should start with “Payroll Tax Cut“. It is not a tax cut, it’s a tax holiday or a tax suspension.”
Considering that it will forever be politically toxic to want to raise the payroll tax back to its original rate, I think we can safely say that this is a tax cut. Not a wise one, to be sure, but a tax cut nevertheless.
This is raiding Social Security plain and simple. SSDI maybe horrible, but taking money from an underfunded program makes no sense. Unless you understand that 47% pay no taxes other than payroll. Why bribe 53% when you can bribe everyone that works. The Bush tax cuts made the system more progressive not less and effectively killed taxes as a GOP platform.
That’s what occurred to me. It’s taken from my Social Security Insurance, which I thought wasn’t a tax.
Maybe Mr. Blumer can expand on this, I be interested to know how putting less into a program that’s currently short on funds can take a hit like this. I’m actually shorting my own future funds.
Chief, Remember the history and rationale of SSI.
SSI was passed as a tax on earnings that allowed the governement to promise public welfare to the retired, even if their retirement occurred before the act was passed. A payroll tax used entirely for general gov’t funding purposes counterbalanced by public welfare not dependent on the amount of contributions contributions is not at all related to insurance or a retirement account whose value is personally-owned and dependent for its value and rate and duration of payout entirely on the amount of personal contributions and the rate of investment returs. SSI was intentionally set up to rob Peter to pay Paul. It is not insurance or a retirement fund. It does not matter to your right to collect what the system offers at all on what you contribute. Keep thinking of it as public welfare for those incapabable of providing for themselves after they retire. As public welfare, the self-supporting should be excluded as beneficiaaries of SSI as an unnecessary risk and drag on the overall solvency of the welfare fund.
Actually about 1/2 of the 47% doesn’t even pay payroll taxes effectively because they get EITC, Making Work Pay, and expanded child credits which negate their payroll tax.
“Fibs” are the fabrications of those up to five years of age. Untruths beyond that age are “lies”.
But then, on reflection, I see the reason, as to why, you choose that word.
Save for a handful of conservatives like Rush Limbaugh and Newt Gingrich, Conservative Republicans are absolutely horrid at explaining away mendacious propaganda this President is. It makes me want to throw a brick through the flat screen and run for office myself.
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At the very first debate, Mitt Romney or Rick Santorum should say this when paired against this vicious, lying Obama propagandist machine:
Yes, Barack Obama inherited a multitude of financial promises. I grant him that. All newly inaugurated Presidents inherit their predecessor’s situation. George Bush inherited a tech bubble, which was soon followed by 9/11. Ronald Reagan inherited a prime rate of 16%, 10% unemployment, and gasoline lines.I didn’t hear George Bush or Ronald make excuse or blame their predecessor when the recovery was not immediate. But we did recover. We have not this term, and our situation even more dire than 2008.
Let us talk about the real facts – our real standing under Barack Obama.
If you are a family of four, Barack Obama in his first term will have added $70,000.00 worth of burden with interest due and payable from your family to the government. I don’t care how much you make. I don’t care how rich or poor you are. For every man, woman and child in this country, black, yellow, brown, or white, rich or poor, employed or unemployed, each one of you is indebted to this government for more than $17,000.00 that you didn’t owe four years ago.
And what has this spending gotten you for your troubles? Employment? Real unemployment or underemployment is truly 18-20%. Let’s not kid ourselves about unemployment improving – a shell game that doesn’t count those of you have been unemployed and fallen of our rolls. Almost one in six of our citizens receives food stamps to make ends meet – that is 32% higher than when Barack Obama took office. Almost two in five mortgages are under water, meaning you owe more on your mortgage then your house is worth. Food and fuel have dramatically increased, with real inflation at 8%. We haven’t seen that since the Jimmy Carter Presidency. Have you witnessed a refurbishment of our infrastructure as promised with a trillion dollars of stimulus? I have not.
Barack Obama campaigned in 2008 to halve our nation’s annual deficit. He has instead tripled it. I ask you? What have we gotten for sweat equity and our indebtedness? Where are the grand solutions Barack Obama promised us, with the the cliche of Hope & Change still ringing in our ears? You’ve been told we have added private sector jobs for twenty-one straight months? I ask where are these jobs then? Adding private sector jobs while never mentioning jobs lost is not adding jobs. It’s a shell game – a mathematical trick conjured up with smoke and mirrors, hocus pocus. Our economy is not recovering; it’s treading water with another trillion dollars of regulation tied to its neck introduced by a Democratic Congress. Do you feel any more secure in your holdings with this new regulation?
Barack Obama promised to unite our country. Do we appear united in our cause? No, we are more divided and polarized than ever. Barack Obama’s current campaign is one of pitting one group against another. He speaks of millionaires and billionaires as not paying their fair share. Since when did $200,000 of annual joint family income represent billionaire status?
I tell you this is not leadership. This is not uniting a country or solving what ills us. It is class warfare and racial division, leading to strife. What has happened to our one nation and indivisible?
Do you trust a government to run an additional 1/6th of our economy, when it can’t manage the post office, or design a hammer for less than $100.00? Because that is what Obamacare will do if not repealed. Do you trust a bureaucrat to decide what best for your children’s health, or your personal physician?
Our President Barack Obama won in 2008, accompanied by huge Democratic majorities in both the House and the Senate, majorities large enough that they had authority to implement the policy changes of their choice.
And they have failed us miserably.
That’s 45 seconds to a minute of oration that would set a grand tone for the upcoming election cycle! Outstanding narrative Tex, simply outstanding.
Unfortunately, a narrative, script, ‘speech’ that will never, EVER leak pass the lips of any Republican Presidential nominee.
Too much truth and too many honest facts are contained within that narrative to ever hope to see the light of political ‘debate’.
Still, well said sir, very well said indeed.
Very well stated, Tex. Your wishful response by a hypothetical Republican debate candidate would have brought the attending audience to their feet and greatly pleased the viewing audience at home. It would have stirred the Tea Party crowd. Meanwhile, the MSM would have dismissed it as an “outburst” not worthy of reportage and 96% of the American public would have been busy watching American Idol. Ho-Hum. One less day until Obama gets re-elected and the whole joint goes into the crapper.
even if the $40 per check claim were true, there is a larger point – this move is, in actuality, the Social Security Starvation Act. Whether one likes SS or not is immaterial; it’s not like the program is going to be revamped, certainly not under current GOP House leadership. The “cut”, however, comes at the cusp of the Boomer retirement binge that may well bankrupt us beyond the ability of Uncle Ben’s printing press.
More people drawing from a system BUT fewer people contributing to it is the kind of actuarial practice one can only find in govt. But, Obama calls it a tax cut and not a single Repub has the testicular fortitude to call BS and name the thing what it is. The discouraging thing is that this point is stupid simple to make.
People know what FICA is on their check stubs; while they will certainly like more money – and I am always for people keeping more of what they earn – this whole thing is intellectually dishonest. But Obama is president, so I repeat myself.
“For all the huffing and puffing, this particular propaganda effort probably won’t have much impact on public opinion. When the National Credit Counseling Foundation asked people what they did with their tax cut last year, “Two-thirds said they didn’t even realize their paychecks were larger.”
I disagree with the assessment of the degree of impact this stunt will have on public opinion. If two-thirds of the people didn’t notice their paychecks were bigger, that’s the ignorant 2/3 who will believe the dumb ass media when it assists OweBama in spreading these damnable lies.
The ole line media and CNN gave no help on this issue. I did not see any of them explain what damage this does to SSA and how little it helps the economy overall as far as jobs go. Most of the cut has been eaten up by gasoline. Only Fox News Channel gave an accurate picture of this disaster.