Mr. Speaker:

Topping the list of unfinished business this year is the impending collision of two closely related crises: the expiration of the payroll tax cut and the acceleration of Social Security's bankruptcy.

Last year, Congress voted for a payroll tax cut that averages roughly $1,000 for every working family in America. 

As warned, it failed to stimulate economic growth and it accelerated the collapse of the Social Security system.  But as promised, it threw every working family a vital lifeline in tough economic times. 

We need to meet three conflicting objectives: we need to continue the payroll tax cut; we need to stimulate real economic growth and we need to avoid doing further damage to the Social Security system.

But first, we need to understand that not all tax cuts stimulate lasting economic growth.  Cutting marginal tax rates does so because this changes the incentives that individuals respond to.  Cutting infra-marginal tax rates - such as the payroll tax - does not.

But cutting the payroll tax did make a huge difference in the ability of working families to make ends meet in a time of declining family incomes and inexorably rising prices.  To restore that tax today, given the economic pressures on working families, is simply unthinkable.

Yet at the same time, the payroll tax is what supports the Social Security system.  Last year, that system entered a state of permanent deficit - and this condition will worsen until the Social Security system bankrupts in 2036.  At that moment, every retiree will suffer a sudden and permanent drop in benefits of roughly 25 percent.  

Read Tom's full floor speech here.