To avoid a $108 billion hit each year on the Social Security Trust Fund, money was paid into the fund from general revenue, which essentially means that it was borrowed.
The payroll tax reduction replaced the two-year income tax break — $400 for single taxpayers and $800 for couples — that was part of the 2009 stimulus bill.
Cole said the payroll tax break may have had a modest effect in stimulating the economy, “but that's it.”
Lankford said it would be hard to tell next year whether returning the tax to its normal rate hurts the economy because other tax increases linked to the health care bill will go into effect. Among those, he noted, are higher taxes on investments for people making more than $200,000 a year.
“I don't think there's going to be any single item you can look at and say how it's going to affect the economy,” Lankford said.