What: All Issues : Fair Taxation : Fair Minimum Wage Act of 2007 (H.R. 2), Sen. Jim Bunning (R-Ky.) amendment to repeal the tax increase on Social Security benefits enacted in 1993/Motion to waive the Budget Act
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Fair Minimum Wage Act of 2007 (H.R. 2), Sen. Jim Bunning (R-Ky.) amendment to repeal the tax increase on Social Security benefits enacted in 1993/Motion to waive the Budget Act
senate Roll Call 28     Jan 25, 2007
Y = Conservative
N = Progressive
Winning Side:
Progressive

This vote was on an amendment proposed by Sen. Jim Bunning (R-Ky.) to a bill to increase the minimum wage to $7.25 per hour over the next two years. Bunning's proposal would repeal the tax increase on Social Security benefits enacted in 1993.

When Social Security was first created, benefits were not taxed at all. Since that time, Congress has twice added taxes on these benefits for higher-income seniors. In 1993, a tax was placed on 85 percent of seniors' Social Security benefits if their income was above $34,000 for individuals and $44,000 for a couple. The figures were not indexed for inflation. Bunning's amendment would repeal the tax starting in 2008.

Sen. Max Baucus (D-Mont.) put forth a competing plan that would provide a nonbinding sense of the Senate resolution indicating that the Senate support repealing the tax without actually repealing it. Bunning called it "political games."

"The sense of the Senate amendment basically thumbs its nose at American seniors," Bunning said. "If it passes, we are saying that although we agree the 1993 tax should be repealed, we aren't going to do anything about it. A vote for the Bunning amendment is a vote for a tax decrease on America's working seniors, on January 1, 2008; that is the date, no ifs, ands or buts about it."

Sen. Benjamin Cardin (D-Md.) defended the 1993 tax on Social Security.

"The tax on Social Security was increased for two reasons. It was done because we wanted to be fiscally responsible and have adequate revenues to pay our bills. But it was done for a second reason, and that is to shore up the Social Security and Medicare trust funds so there would be adequate money in the funds to pay for benefits," Cardin said. He added that a third reason that it was enacted was to make the tax rate on Social Security similar to private pensions.

Cardin said he opposed Bunning's proposal because it would add $200 billion to the national debt, if passed. He also said those taxes on Social Security were crucial to funding Medicare.

"I say to my colleagues, seniors are going to be a lot safer by knowing we have a dedicated revenue source that goes into Medicare rather than relying on the transfer of funds into the Medicare system," Cardin added. Furthermore, Cardin said, tax bills are constitutionally mandated to originate in the House.

Because Bunning's amendment amounts to a $200 billion tax cut, it was vulnerable to a parliamentary procedure known as a point of order. Under rules put in place by the 1974 Congressional Budget Act, unless a tax break or spending increase is offset by spending cuts or revenue increases elsewhere in the federal budget, the Budget Act has to be waived. On those grounds, Baucus raised a point of order against Bunning's amendment. By law, a three-fifths majority of the whole Senate (60 votes) is required to waive the Budget Act.

By a vote of 42-51, the motion to waive the Budget Act failed. All but one Democrat voted against Bunning's amendment, and four Republicans joined 45 Democrats in opposing it. Thus, a bill to increase the minimum wage to $7.25 over the next two years went forward without an amendment by Bunning that would have repealed the tax on Social Security benefits enacted in 1993.

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