Senior Citizens League Opposes Use Of Social Security Funds For Tax Cut (Press Release)

Senior Citizens League Opposes Use Of Social Security Funds For Tax Cut (Press Release)

March 14, 2001, Alexandria, VA-`The TREA Senior Citizens League adamantly opposes any efforts to tap the Social Security Trust Fund to pay for any new or continuing programs-including a tax cut,` said George Smith, chairman of The TREA Senior Citizens League (TSCL).

`Certainly, many Americans will support a tax cut that would have an immediate positive impact on their lifestyle. But to take the necessary funds from the Social Security Trust Fund would ultimately result in a `pay me now` and `don`t pay me later` situation. This may well jeopardize our nation`s ability to provide our senior citizens with the money they need to pay for housing, cover medical expenses, purchase medication, or buy food,` Smith added.

President Bush`s chief economic advisor, Lawrence Lindsey, hinted about `temporarily` tapping the Social Security payroll tax surplus to pay for a massive $1.6 trillion tax cut. That proposal is intended to reduce all federal income tax rates, raise the child credit, reduce the so-called `marriage penalty` and repeal federal estate taxes. According to Lindsey, the Social Security surplus should be considered part of a unified budget, making some or all of the surplus funds available for other government spending programs.

Recently, the Congressional Budget Office (CBO) released new budget figures that estimated a budget surplus of $5.5 trillion over the next 10 years. Approximately $2.5 trillion of that comes from Social Security, and about $400 billion comes from Medicare.

`Budget surplus estimates are based on previous years, where we`ve had a booming economy,` Smith pointed out. `But all the economic indicators point to a slowing economy, so the surpluses over the next 10 years might not materialize at all.`

Indeed, Federal Reserve chairman Alan Greenspan told Congress last month that the economy had all but stopped growing, noting that, `we have had a very dramatic slowing down, and indeed we are probably very close to zero at this particular moment.` Greenspan warned that while there was room for a tax cut, it should not be so big that it would plunge the government back into deficit if the budget surplus failed to materialize.

`We currently have people on Social Security who suffered a loss in Social Security benefits in 1977 as a result of the recalculation of Social Security benefits-namely the notch babies,` Smith noted. `If we continue to look to the Social Security Trust Fund as a source of money to pay for other programs, we risk wreaking havoc on a system that has already been `fixed` once. It`s imperative that we safeguard the programs that provide assistance to our nation`s seniors.`

TSCL is a national group of politically active seniors concerned about the protection and defense of their earned Social Security, Medicare, military and other retirement benefits. TSCL members participate in a number of grass roots lobbying and public education campaigns to ensure governmental bodies live up to commitments. "For more information, send $1.00 for shipping and handling to: TREA Senior Citizens League, Dept. W10304, 909 N. Washington St., Suite 300, Alexandria, VA 22314".