The idea is to let workers keep the money so they'll spend it and give the economy a boost.
The White House has said the Social Security system would be reimbursed for the full amount from general revenue -- an estimated $112 billion -- so it wouldn't affect the program's long-term solvency.
Social Security advocates don't doubt that's true over the coming year. But they worry that reinstating the 6.2% rate could be portrayed as a 50% tax increase.
Take the Social Security quiz"It's easy to enact tax cuts but virtually impossible to allow them to expire. This payroll tax holiday proposal will be no different. Election year politics in 2012 will doom the repeal of this [$112 billion] cut," said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.
If that prediction comes true, that could portend trouble for the program's funding in the future, Kennelly and other Social Security advocates say.
Since workers' payroll taxes are intended to fund Social Security benefits, mixing general revenue into the funding could weaken the program over time because it would have to compete with other important priorities paid for by general revenues, like education, Kennelly said.
As it is, the federal government will soon need to start paying back the $2.5 trillion in surplus payroll tax revenue that it has borrowed from Social Security over the years. That's because, starting in 2015, the amount of annual payroll tax income paid into the system will permanently fall below the amount of benefits that will need to be paid out.
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