Critics Fear Tax Cut would Undermine Social Security Benefits

September 15, 2011

Washington - Experts have expressed apprehension that President Barack Obama’s tax cut proposals will have adverse effects on the social security pension system, mostly on retiree benefits, reports said.

Although some experts agree that the proposal would have no impact on the program's financial soundness or ability to pay benefits averaging $1,077 a month to 55 million recipients, some critics say this would undermine the stature of the federal program.

One of the major keystones of the Obama’s $477 billion plan to create jobs include cutting Social Security taxes, which it believes can bolster the economy.

According to administration’s plans, the payroll tax cut would take $240 billion out of Social Security revenues in 2012 and replenish the lost Federal Insurance Contribution Act (FICA) taxes with money from the overall federal budget to keep Social Security intact.

Critics, however say that supporting Social Security with general funds from the Treasury affect its stature as a self-funded insurance program for retirees, the disabled and their survivors.