Rep. Capuano Offers Fiscally Responsible Alternative to Republican Social Security Tax Plan
July 27, 2000 -- Today U.S. Rep Michael Capuano (D-MA) will offer the Democratic substitute to the Republican "Social Security Benefits Tax Relief Act of 2000" (HR 4865).
"We all want to provide some measure of tax relief to our constituents - but it must benefit those who need it most, not just the wealthiest Americans. Unlike HR 4865, the Democratic alternative provides true tax relief to working men and women and is not merely an election year gimmick," stated Rep. Capuano.
The Democratic substitute to HR 4865 is a better option for working Americans for a number of reasons. The Democrats' plan is significantly more cost-effective. It is over $46 billion less than the Republican plan and it still covers a full 95% of our seniors.
The Democratic substitute is also more responsible. It provides a targeted tax cut to those who need it most, without busting the federal budget. Furthermore, the Republican plan is based upon the surplus that exists today - it does not take into consideration the massive tax cuts already passed by the Republicans. In short, the Republican plan is not based on real numbers.
The Democratic substitute also protects Social Security and Medicare. The most damaging aspect of the Republican bill is that it eliminates a dedicated stream of funding to the Medicare trust fund. The funds collected under the current structure are specifically earmarked for Medicare. If there is not enough of a surplus in future years to replace these earmarks, Congress will have some unattractive options like cutting Medicare benefits, increasing taxes on workers or cutting funding to important federal programs.
The Democratic substitute stipulates that the tax cut can only go into effect during years that the surplus is greater than the amount required to be transferred. If we don't have the money in a given year to fund the tax cut, we won't have a tax cut. Conversely, the Republican bill could actually cause future tax increases because if there isn't enough money in the budget to finance the transfer to Medicare, the money will have to come from somewhere else. There is a real possibility that in those years, Medicare benefits could be cut, premiums could be increased or taxes could be raised.
Rep. Capuano will offer the substitute on the floor of the House of Representatives this afternoon.