The majority of Democrats, Republicans and Independents all oppose the proposed cut in the Social Security payroll tax, according to a new ABC News/Washington Post poll (PDF). Further, they would not support the overall package if it did NOT have an extension of unemployment benefits.
There is good reason for the opposition to cutting the Social Security payroll tax. As Nancy Altman has noted, there is tremendous danger in the proposed cut to Social Security payroll taxes. It means that Social Security will not be taking in those funds, even as it continues to pay out benefits:
That means that the federal government will have to continue to transfer $120 billion to the Social Security trust funds each and every year even as it has to transfer more and more interest payments as the trust funds continue to grow and as interest rates return to more normal levels. Unless Congress acts to restore Social Security to solvency, the Treasury bonds held in trust will have to be redeemed, again on top of that new $120 billion transfer from the general fund, starting fifteen years from now, assuming Congress even continues to make the $120 billion every year before that point. These dollars will be competing with dollars for defense, environmental protection, education, school lunches, Food Stamps, Medicare, Medicaid, SSI, Pell grants for low income college students, and every other good and service financed by the federal government.
This is what the President gave the Republicans in exchange for the Making Work Pay tax credit. As you can see, the GOP plan is not only incredibly unpopular across the board, it benefits those at the upper end of the income scale to the detriment of those at the bottom:
Moreover, the poll found that extending unemployment benefits — the President’s justification for giving the GOP everything they asked for — is incredibly popular with the public. Just 26% oppose extending unemployment benefits, while 72% favor their extension. That includes 88% of Democrats, 73% of Independents and 55% of Republicans.
The poll concludes that the Republicans got by far the better part of the deal:
Averaging views on each of the four main elements of the package suggests that the GOP, in this sense, can be said to have won the better deal. Republicans favor the four items by an average of 61-37 percent; Democrats, by a closer 54-42 percent. Independents, at 52-44 percent, align more closely with Democrats.
But in a single question taking the package as whole, Democrats and independents come along, with 68 percent support in both groups, compared with 75 percent among Republicans. A driving force looks to be unemployment benefits, favored by nearly three-quarters of independents as well as nearly nine in 10 Democrats.
The depth of that support also contributes: Sixty-six percent of Democrats “strongly” favor extending benefits, the highest partisan support for any individual element of the plan. And 48 percent of independents strongly back it as well, the one element on which their views, too, are most strongly felt.
That last part is key. Without the extension of unemployment benefits, the tax cut package is actually unpopular:
| Support for parts of tax plan:
|Extending unemployment benefits||88||55||73||72|
|Extending tax cuts for all||38||85||49||54|
|Increasing exemption on estate tax||52||60||48||52|
|Cutting Social Security payroll tax||37||42||38||39|
|Average support for all four items||54||61||52||54|
|Average support w/out UE extension||42||61||45||48|
The President has veto power. He has the ability to keep sending things back to Congress if they don’t pass something he likes. You may remember President George Bush, he did it all the time.
If the GOP wants to keep passing tax cuts for the rich WITHOUT extending unemployment benefits, the plan will be unpopular. The President would be well within his right to veto it and send Congress back to the drawing board, but also have public support with him for forcing an unemployment benefit extension.
If Obama is not going to fight with the wind at his back like this, he never will.