JEC Hearing: "Bolstering the Economy: Helping American Families by Reauthorizing the Payroll Tax Cut and UI Benefits"

"Mr. Chairman, thank you for holding today’s hearing. I agree with you that this committee must examine the whole picture – understanding both the benefits of extending the payroll tax cut and long-term unemployment benefits and their unintended consequences.

There is a strong bipartisan consensus in Congress to extend both of these expiring provisions through the end of this year. However, serious differences remain over how we should pay for these expensive extensions and whether we should reform the Unemployment Insurance program.

As popular as the payroll tax holiday may be, economists disagree about its effectiveness as an economic stimulus. However, economists agree that Social Security faces serious and growing cash-flow deficits. Diverting one-sixth of payroll tax revenue away from the Social Security revenue stream creates a significant sinkhole that exacerbates Social Security’s cash-flow problems. Non-cash accounting transfers from the General Fund cannot alleviate these cash-flow problems. Last year, the U.S. government had to borrow $142 billion from investors – including foreign countries like China – to pay Social Security benefits to our seniors.

Congress must fill this sinkhole to ensure that we will be able to pay promised Social Security benefits. That’s why House Republicans are insisting that Congress must offset any loss of payroll tax revenue with actual cash savings in other areas of the government, not accounting gimmicks. House Republicans will protect this vital program from debilitating cash diversions with common sense savings that have had strong bipartisan support.
As for unemployment, clearly the economic policies of the Obama Administration did not produce the vigorous recovery, for which hardworking taxpayers hoped. Tens of millions of Americans are struggling to make ends meet. Millions can’t find a full-time job, and millions more can’t find any job at all. Even worse, other millions have simply given up and stopped looking for work, leaving us with the lowest workforce participation rate in nearly three decades...."

Opening Statement
Representative Kevin Brady
Vice Chairman
Joint Economic Committee

See the entire statement on the JECRepublicans website here