The Question of Rolling Back the Payroll Tax:
Unmasking the Deficit Illusion
T-HRD-90-10: Published: Feb 5, 1990. Publicly Released: Feb 5, 1990.
- Full Report:
GAO discussed a congressional proposal to decrease the Social Security payroll tax. GAO noted that: (1) the use of Social Security surpluses to decrease the federal budget deficit masks the fundamental budget deficit problem and encourages avoidance of difficult fiscal choices needed to reduce the general fund deficit; (2) the congressional proposal would not decrease Social Security benefits; (3) administration proposals to create a social security integrity and debt reduction fund would further delay dealing with fundamental deficit problems and allow the national debt, and interest on the national debt, to increase; and (4) although Social Security trust fund revenues exceeded current needs, the burden of supporting the nation's aged will increase as the post-war generation begins to retire. GAO believes that the federal government's continued reliance on accumulating Social Security reserves will damage its ability to resolve the deficit problem, achieve vital policy goals, and address the nation's unmet needs.