The one-year, 2.0 percentage point Social Security tax cut was enacted a year ago as part of a package that also extended 99-week unemployment benefits for a year, and postponed the expiration of the Bush income tax cuts for two years. Interestingly enough, opinion polls taken at the time showed that the Social Security tax cut was the only part of the package that the public did not support.
That this temporary cut in the Social Security payroll tax enjoyed bipartisan support a year ago shows the extent to which the Keynesian Superstition pervades both of our political parties. Members on both sides of the aisle bought into the fantasy that “putting money into people’s pockets” would increase demand. It didn’t. Economic growth slowed markedly at the exact moment that the payroll tax cut was enacted.
If the Republicans had any sense, they would have exposed this so-called "payroll" tax cut for what it is. But, ever-so-sensitive to their reputation as tax-cutters, they've rolled over for a puny, non-stimulative cut that further endangers an already-tottering Social Security system.
It was a shameful display of craven fear. Sigh. If only Ron Paul would get his head out of his ass on foreign policy.