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Posts Tagged ‘President Obama’

Cuts to Payroll Taxes May Hurt Social Security Beneficiaries

Monday, October 3rd, 2011

As part of his jobs plan, one suggestion that President Obama offered was to extend and expand payroll taxes. Many from both sides of the aisle immediately wondered what the effect would be for Social Security. Estimates currently predict that Social Security disability programs will run out of money around 2017 and that all Social Security programs will become insolvent by 2037. Cutting the taxes that fund these programs that are already facing severe shortages may worsen the problem.

Obama seeks a $175 billion one-year extension, and he requested halving the payroll tax for employees to 3.1 percent in 2012. Employers’ rate would be 3.1 percent on the first $5 million of their payrolls.

Will these cuts do more harm than good in the long term? The Center for Budget and Policy Priorities found that the cuts would make a significant difference in the amount that middle class families could spend. Moody’s Analytics concluded that allowing the payroll cuts to expire would reduce gross domestic product next year and mean one million fewer jobs by the end of 2012.

Certainly the economy is still in need of a boost, but at what expense? If the payroll tax cuts expand, we will have to look elsewhere for how to make Social Security programs solvent again, and that is what worries Social Security beneficiaries. Without increased funding, the other way to improve a budget is to cut costs, which could mean things like stricter qualification standards, lower benefits and higher ages for retirement benefits. More information on how changes to Social Security affect disability applicants is available from a Tulsa Social Security disability law firm.

Troutman & Troutman, P.C. – Tulsa Social Security disability lawyers

New Budget is ‘Luck of Draw’ for People with Disabilities

Thursday, February 24th, 2011

According to Disability Scoop, President Obama’s $3.73 trillion dollar budget proposal seems to highlight special education, but falls short in other areas.

The new budget proposes flat or reduced spending for several programs, though special education received a boost. President Obama added $50 million dollars to the budget to help children with disabilities. He also added an extra $200 million dollars in state grants for IDA, or the Individuals with Disabilities Education Act.

The Council for Exceptional Children receives $11.5 billion dollars a year, so the increase is “modest,” according to Deb Ziegler. The organization works on behalf of special educations but are “appreciate of anything [they] get” in this economic downturn.

Unfortunately, what is good news for one program is not always good news for another. Obama’s new budget proposal eliminates funding to ensure voter access for disabled individuals. There will also be $104 million dollars less for building new housing for disabled persons.

Ironically, one program that promotes the inclusion of developmentally disabled people in the community is proposed to be cut practically in half.

Ari Ne’eman, president of the Autistic Self Advocacy Network says that while “everyone recognizes that these are difficult fiscal times,” that “we need to make sure we aren’t sacrificing the long-term rights and opportunities for people with disabilities.”

Some programs, including Social Security, were left mainly untouched. However, the new budget does include a $40 million dollar pilot project which would remove children from Social Security Income but provide grants to help improve the child’s outcome.

Tax Cuts: Dealing with Social Security Windfall

Friday, January 14th, 2011

In December, Congress enacted a 2 percent tax-cut extension for contributions to Social Security for workers with annual salaries up to $106,800. Congress is hoping this tax cut will strengthen the economy.

The tax cut has resulted in additional take-home pay for many Americans, though the amount per check is relatively miniscule. Some Americans note they will be either spending or saving the money: either putting it toward their debt or using it for their day-to-day necessities.

Workers do not need to make any changes to their tax forms, as the tax cut is handled by employers. It should also be noted that the tax cut does not affect employer contributions to Social Security.

The IRS notes that these changes should all be in effect by January 31st. However, employers have until March 31st to make any adjustments for overwithholding. The IRS adds that all though these changes are automatic, workers should still examine their federal tax withholdings every year; as changes may be necessary for lifestyle changes such as children, marriage, buying a new home or divorce.

Furthermore, though the Social Security Administration claims that this temporary drop in income will not affect the system, many Americans are doubting that. Some consequences of the tax cut may include a delay in age where benefits can be received or a lower monthly benefit for future beneficiaries.

Thus, financial advisors across the board recommend that Americans begin thinking more seriously about their financial future, as Social Security benefits may not be very dependable.