WASHINGTON (AP) — President Barack Obama’s plan to cut payroll taxes for a year would provide big savings for many workers. But Social Security advocates are nervous that it could jeopardize the retirement program’s finances.
The plan is part of a tax cut and extended unemployment benefits package that Obama negotiated with Senate Republican leaders. It would trim workers’ share of Social Security taxes by nearly one-third for 2011. Workers making $50,000 in wages would get a $1,000 tax cut; those making $100,000 would get a $2,000 tax cut.
The government would borrow about $112 billion to make Social Security whole. Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.
