AARP: Let the Payroll Tax Cut Expire
Lawmakers on Capitol Hill - both Democrats and Republicans -- have shown little enthusiasm for extending the payroll tax cut, but former White House economist Larry Summers is among those who have urged its renewal as a means of putting more money in consumers' pockets and giving the economy an extra boost.
If the cut is not extended, the payroll tax will revert back to 6.2 percent from its current rate of 4.2 percent
Roughly half of the nation's population--more than 150 million people--has benefited from the two percentage point cut to the payroll tax, first enacted in 2010 and extended through the end of this year as a form of economic relief for middle-class Americans.
But since payroll taxes are used to fund Social Security, some lawmakers have expressed concern that further extensions of the cut could erode the popular program's finances. The AARP wrote to lawmakers and the White House to underscore those concerns.
"As we continue to recover from difficult economic conditions, we must remember the critical importance of Social Security for both current and future generations of Americans," wrote Barry Rand, chief executive of AARP, the nation's largest senior lobby. "We must ensure that efforts to promote economic health do not undermine the single most important source of retirement and disability income for millions of workers and their families."