U.S. Senator Joe Manchin says the temporary two percent reduction in the federal payroll tax had to be put back on for the sake of Social Security.
“I’ve said with it, ‘All we’re doing is putting Social Security in jeopardy,'” Manchin said during a Wednesday conference call with reporters. “That was the first year that we did not have enough cash flow that was needed to pay out to Social Security. That was the first year…so it (the temporary reduction) had to stop.”
The elimination of the reduction was part of the fiscal cliff bill that passed Congress Tuesday. Manchin called the bill “the good, the bad and the ugly,” Wednesday after he voted for the bill early Tuesday morning.
He says more than 99 percent of West Virginians won’t see tax increases because taxes go up on those earning more than $400,000 a year. He says the bad is that the bill doesn’t address the growing debt and the ugly is the same fight will take place in two months.
The elimination of the temporary reduction in the payroll tax will mean about $70 a month for most working West Virginians. Manchin says not many people knew that tax was decreased a few years ago. He says the bottom line is that it hurt Social Security.
“For the sake of Social Security it had to stop,” he said.
The payroll tax increases from 10.4 percent to 12.4 percent.