XMAS SHELL GAME - WATCH BOTH HANDS

This syndicated cartoon appeared in newspapers across the county

The Christmas spirit has lately been dampened by the bickering between the two corporate parties in Washington. They've been playing good cop - bad cop again. When they start doing that you'd better watch both of their slimy little hands.

The Repubs and Dems have been going at each other about a two month payroll tax cut. For those who don't pay attention "payroll tax" is the money that goes into the Social Security Trust Fund. The normal rate is 6.2% but it has been trimmed down to 4.2% and the Democrats have a goal of reducing it to 3.1%. Their reasoning is to give the funds back to the taxpayer as an economic stimulus.

A very popular idea - everybody likes tax cuts.........

The Repubs in the House said they would not support just a two month tax cut. They want to make it at least for a year or even permanent. Back and forth they go.....so guess what?

This morning we learn that the Repubs have agreed to the two month cut. To seal the deal, Senate Majority Leader Harry M. Reid (D-Nev.) promised Thursday that he would appoint a conference committee to take up negotiations after New Year’s Day on ways to pay for a full-year tax cut.

In the end they all will agree on a long-term cut. What is the result? They reduce the amount of funds going into Social Security at the very same time that many private worker pension plans have been devastated due to the gambling going on at the stock market.

But don't worry both parties in Washington tell the people. The money that is reduced from Social Security will be replaced with funds from the general revenue to ensure that the retirement trust fund remains solvent. OK, that sounds nice....but I thought the general revenue funds were running in the negative....we are already borrowing from China to supplement the general revenue fund deficit.

It's a shell game.

"Social Security was not established to be a source of 'temporary' stimulus funds. The idea that its payroll tax rate should be moved up and down with economic events is highly dangerous to the program's financial future," Chuck Blahous, a public trustee for Social Security and Medicare, said in a statement.

Blahous and others argue that the more Social Security is seen as a program that must rely on general tax revenue, the less it will be viewed as a self-financed program that pays out earned benefits.

"Social Security will gradually be turned into something more akin to welfare, for which the funding is provided not solely by ... workers but also by a subsidy funded by those subject to income tax," Blahous said.

In other words Social Security would be turned into just another discretionary program. A fund that can be cut or even shut down depending on the whims of Congress and the White House.

In an even more cynical gesture the agreement will extend unemployment insurance for two more months - a move likely to have been made as a way to buy union support for the stealth attack on Social Security.

Watch out for gifts from Scrooge at Xmas time....you've got to keep a close eye on both of his money grubbing hands.