Capitol View: September 13, 2011 Archive

Ellison uncomfortable with Social Security tax cut

Posted at 10:50 AM on September 13, 2011 by Brett Neely
Filed under: U.S. House

WASHINGTON - While almost all Democrats agree with President Obama that creating jobs and reducing unemployment should be a priority, some of the most liberal members of the Democratic coalition, including DFL Rep. Keith Ellison, are concerned about the President's proposal to extend and expand the payroll tax cut which funds Social Security.

Until this year, employees and employers each paid a 6.2 percent tax on wages that went toward Social Security. Under a temporary tax deal struck last December, the employee side was cut for one year to 4.2 percent to boost the economy by slightly fattening workers' paychecks. President Obama's new plan would further cut the tax to 3.1 percent on both employers and employees through 2012, at a cost of $240 billion.

At a Capitol Hill press conference this morning, Ellison emphasized his support for much of the President's agenda but said he's concerned about the proposal.

"I am worried that it could set up a long term problem for Social Security," said Ellison, "As a strictly temporary measure, I could live with it for a little while."

While the President's plan calls for the tax rate to return to 6.1 percent in 2013, there's a long history of temporary tax measures becoming quasi-permanent because members of Congress are reluctant to be accused by opponents of raising taxes.

With Social Security's stream of dedicated funding temporarily reduced, a larger share of the program's benefits must come from direct government revenues.

Ellison and his allies in the Congressional Progressive Caucus want to expand on the President's jobs plan by having the government to hire two million workers to improve schools, parks and neighborhoods.

The payroll tax cut also lacks support from some Minnesota Republicans in Congress. Last month, Reps. John Kline and Erik Paulsen told MPR News they were skeptical about the effectiveness of the payroll tax cut.

House passes Kline's ed bill and extends transportation funding

Posted at 1:55 PM on September 13, 2011 by Brett Neely (2 Comments)
Filed under: U.S. House

WASHINGTON - The U.S. House of Representatives today avoided an impending shutdown of the nation's airports and road construction.

The measure, passed by a voice vote, extends funding for the Federal Aviation Administration, which had been scheduled to expire at the end of this week, through the end of January 2012 and extends highway and transit funding, which expired at the end of the month, through March 2012.

The FAA was briefly shuttered over the summer due to a disagreement between the House and Senate over several provisions in the bill, including funding the Essential Air Service program which subsidizes commercial flights to rural airports, including three in Minnesota. In a deal reached last last week, the current Essential Air Service program remains intact.

Had the highway bill authorization expired, more than $650 million worth of construction projects in Minnesota employing thousands of workers could have been endangered, according to data from MNDOT. The federal government typically provides about a third of all road construction fudning.

"It's not the end result we wanted," said GOP Rep. Chip Cravaack, who said he would have preferred a longer-term authorization of transportation spending. "But right now I guess this is the best we can do and we reached a good bipartisan agreement."

The lower chamber also overwhelmingly voted 365-54 today to pass the first in a series of education reform bill sponsored by Minnesota Rep. John Kline, who chairs the House Education and Workforce Committee. The bill encourages the construction and expansion of charter schools.

In a statement, Kline called the bill "an important first step" for education reformers that "signals our shared commitment to the reform process."

Kline's committee has approved a series of education bills that are part of the process of reauthorizing the No Child Left Behind Act, but those measures have lacked bipartisan support and have not been brought to the House floor for a vote.

The bill also includes an amendment sponsored by Minnesota Republican Erik Paulsen that allows successful charter schools to receive federal grants three years after the school is established, rather than the previous five year waiting period.