Revised September 28, 1998

CBO Data Show Archer Tax Bill Would
Be Funded with Social Security Revenues
by Sam Elkin and Robert Greenstein

The tax cut plan proposed by House Ways and Means Committee Chairman Bill Archer and now  being debated in Congress would reduce the total budget surpluses projected over the next decade. To counter calls by the bill's opponents to save the surplus until a Social Security reform plan has been put in place, some Republican supporters of the bill have claimed the surpluses are due to increased income tax receipts, not to the Social Security surplus itself. Representative Bill Thomas, for example, recently claimed that "the surplus is due to higher income tax payments and low inflation, not Social Security receipts."(1)

This statement is misleading for several reasons:

Until a plan is put into place to restore Social Security solvency, the surplus should not be frittered away. Once a Social Security plan has been approved and it is determined whether a surplus remains — and if so, in what amount — debate can begin about what tax cuts and other budgetary initiatives may be appropriate.

That time, however, is not here yet. Until it is, lawmakers should make sure they do not take actions that could have the effect of compromising the retirement security of future generations.

End Notes:

1. Letter from Rep. William M. Thomas to Rep. Charles B. Rangel, September 16, 1998.

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