The Obama administration is risking the future viability of Social Security in its latest push to extend and expand the payroll tax holiday for another year. While President Obama and congressional Democrats clearly see the tax holiday as good politics in their efforts to define Republicans as servants of the top one percent, a winning political issue isn’t as important as the long term fiscal health of the nation’s most critical retirement program.

Since its founding in 1935, Social Security has paid its way, and that has left it largely immune to the various budget fights waged in Washington ever since. Because Social Security benefits have been paid for directly through the payroll tax, today’s retirees can collect their monthly check knowing that they paid into the system during their own working years, and that the benefits they receive are earned. Social Security has been derided by some as an “entitlement,” but that shouldn’t be an epithet. Americans who’ve paid into the system are, in fact, entitled to the benefits they’ve earned and that’s why Americans feel so strongly about the program and support it by such overwhelming margins.

The partial payroll tax holiday threatens to undo Social Security’s funding system. Already, the treasury has been forced to use general revenues to backfill the shortfall the holiday created this year, and President Obama’s proposed expansion of the holiday would require more such borrowing.

That undermines the legitimacy of Social Security as a self-funded entity, which ultimately aids the cause of those who would like to undo the program. While Democrats may see this as an opportunity to turn the tax tables on Republicans (and demonstrate that the GOP will object to tax cuts for the middle class while going to the mat to support tax cuts for the wealthy), Republicans could turn the tables on Democrats soon enough, by arguing that the payroll tax reduction continue indefinitely. If the economy remains weak, as is likely for the foreseeable future, Democrats would have a hard time arguing against it. If so, Social Security could become dependent on general revenues for the long term, a development that would be disastrous for the sustainability of the program.

While the president is right that the economy needs much more help if we’re ever to emerge from the longest and deepest downturn since the Great Depression, there are better ways to get the job done, without risking the future of Social Security.

President Obama has proposed to pay for his payroll tax holiday with higher taxes on the wealthy. A better approach is to say everyone should chip in, rather than just the wealthy. Let the payroll tax holiday expire and let the Bush tax cuts for the wealthy expire at the same time. Now there’s a grand bargain, one that can do more to help the economy in the short term, and our deficit problem in the long term.

To boost the economy, use the tax dollars that otherwise would have gone to pay for the payroll tax holiday for direct job creation. That means targeting the funds for rehiring of teachers and police officers, who have been laid off in droves by local governments and school districts. And put more dollars into local job corps, which can provide good, productive employment for those out of work.

Americans are demanding that the government provide jobs. But the most effective way the government can do that is to do it directly. Tossing billions out the door in tax cuts and hoping that a few new jobs pop up as a result is little more than desperation. If the history of the last decade has taught us anything, it’s that tax cuts don’t deliver when it comes to jobs.

Right now, most Americans have trimmed their spending in response to the economic uncertainty that seems to be plaguing the entire world economy. That means putting a few more dollars in people’s paychecks won’t necessarily induce them to spend more. It’s going to take direct investment (that means spending) on new jobs to make it happen. The private sector isn’t up to the task right now. The government can do nothing, and watch the economy flounder for years to come, or it can take an active role in turning things around.

That’s the argument that President Obama should be making. Arguing for more tax cuts may be good politics, but it’s lousy economic policy. We’ve had enough of that already.