GOP Lawmakers Offer Payroll-Tax Cut Plans : Social Security: Concept gains support in Capitol. New proposals may signal revolt in Republican ranks.

Two influential Republican members of Congress proposed separate plans Thursday to cut Social Security taxes, a course that is attracting growing support on Capitol Hill despite strong opposition from the Bush Administration.

Hours after President Bush declared in his State of the Union address that “the last thing we need to do is mess around with Social Security,” a revolt appeared to break out in his own party. Sen. Robert W. Kasten (R-Wis.) and Rep. Hank Brown (R-Colo.) held individual press conferences Thursday to promote a rollback in Social Security taxes.

Meanwhile, Sen. Daniel Patrick Moynihan (D-N.Y.), who started the debate by proposing a $55-billion-a-year tax cut, was basking in the limelight. “My only purpose is to establish the fact that the trust funds are being misused--it is now clear,” an ebullient Moynihan told a breakfast meeting with reporters.

Social Security taxes raised $36 billion more than needed to pay benefits last year. The surplus is lent to the Treasury, which uses it to offset some of the enormous deficit being run by the rest of government, and Moynihan and a growing number of other congressmen object to using Social Security revenues to mask what they call the true size of the deficit.

Rep. Brown proposed rolling back the tax increase that became effective Jan. 1, when Social Security’s share of the payroll tax rate rose to 6.2%, up from 6.06% last year. An additional 1.45% payroll tax is used for the Medicare program. The tax is levied on wages up to $51,300.

“We shouldn’t be shooting in the dark,” said Brown, whose legislation would lower taxes by $7 billion a year. “The 1990 tax hike is not justified because we don’t know what is needed to keep the system sound,” added the ranking Republican on the House Social Security subcommittee.

Kasten, who has led successful efforts in past years to repeal such controversial taxes as withholding on dividend and interest earnings, would go further. He proposed cutting Social Security taxes by an estimated $71 billion over three years by trimming the rate to 5.9% retroactive to Jan. 1 and then to 5.6% next year and 5.1% in 1992.

“America’s working families deserve a break,” Kasten said. “They deserve to see more of their hard-earned money in each paycheck.” Reducing the payroll tax would “force Congress to curb its insatiable appetite to spend the Social Security surplus,” said Kasten.

Moynihan lobbed a political grenade on Dec. 29 when he proposed cutting the Social Security tax rate back to 6.06% this year and 5.1% next year. That would cost the Social Security system $55 billion next year.

“The funds are being misused--now is the time to call attention to it when the funds are rising at $1 billion a week,” Moynihan said Thursday. “Soon it will rise at $3 billion a week, and a $3-billion habit is hard to break.”

Moynihan’s plan upset the political equilibrium because it would strip funds from the budget at a time when there is no appetite for offsetting tax increases or spending cuts. Neither the Bush Administration nor many of the Democratic leaders in Congress want to bog down in acrimonious disputes over how to raise taxes or trim social programs.

Moynihan said he feels no obligation to suggest where Congress should get $55 billion to replace the lost taxes if his legislative plan becomes law. “It’s not my job,” he said. “I’m not chairman of the Budget Committee, I’m chairman of the Social Security subcommittee.”

The Bush Administration has responded with a plan of its own, the gradual removal of the Social Security surplus from budget calculations, starting in 1993, after the next presidential election.

A key House Democrat, Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), agrees with the Administration and has denounced the Moynihan plan.

Advocates of a tax cut say there would be no impact on the 40 million persons now receiving Social Security benefits.

“Remember, the Social Security funds are secure, and tell your grandmothers they are all right,” Moynihan said.

Trimming the tax “does not affect in any way our commitment to the hard-working retirees of this country,” Kasten said.