Bunning's Social Security change defeated again

By Patrick Crowley
February 6, 2009
Cincinnati.com

Kentucky U.S. Sen. Jim Bunning's bid to lower Social Security taxes died this week when his amendment to the financial stimulus package was soundly defeated.

Bunning, a Republican, blamed Senate Democrats for leading the charge against the amendment that fell Wednesday night by a vote of 57 to 39.

"It is a shame that Senate Democrats have chosen to turn their backs on our nation's seniors by rejecting my amendment," Bunning said.

"I have been a strong advocate for eliminating this tax for many years. It was unfair when it was implemented in 1993 and it is unfair today."

Under Bunning's plan, senior citizens would have received a one-year reprieve from paying federal Social Security taxes.

Bunning's amendment was attached to the federal stimulus bill the House passed last week and the Senate is now considering.

The amendment, which Bunning has proposed in the past, would suspend for a year the tax Congress enacted in 1993 that requires 85 percent of a senior's Social Security benefits taxed on income above $34,000 on an individual and $44,000 for a couple.

Bunning said about 12 million senior citizens pay the tax.

As a member of the House in 1993, he voted against implementation of the tax.

"My amendment would have given seniors a one-year break from this excessive tax and provided them with some much needed relief during these difficult economic times," Bunning said in a statement.

"While I would love to see this tax permanently repealed, suspending it for one year is a start. My proposal would help stimulate the economy immediately by allowing millions of seniors to keep more of their Social Security benefits.

"With sharp increases in winter fuel costs, increases in health care and food costs, this tax relief could really make a difference to millions of seniors across the country," he said.

The tax break would have cost $14.4 billion and would have been funded by adjusting spending in other parts of the stimulus package, with the exception of spending on military veterans.

"It is the fair thing to do," Bunning said.

But a Washington think tank has said in an analysis that repealing the tax would benefit mostly wealthy Social Security beneficiaries.

The Center on Budget and Policy Priorities, a nonprofit organization focused on domestic budget issues, has determined that the average beneficiary household of the tax cut has an average net worth of nearly $1.1 million, average financial assets of $607,000 and average income of $96,300.

The households that are not subject to any Social Security taxes have an average net worth of $137,400, average financial assets of $49,400 and average income $17,000.

"The wealth and income of those who would benefit from this tax cut stand in sharp contrast to the wealth and income of those beneficiaries whose Social Security benefits are not taxable," the center concluded.