Are Eliminating The Tax And Ending Social Security Equivalent
In defense of its posts, Social Security Works argued that advocating for termination of the payroll tax and termination of Social Security are the same. The payroll tax is known as the Federal Insurance Contribution Act tax, after all.
Linda Benesch, a spokeswoman for Social Security Works, told USA TODAY that there is “not” a distinction between cutting Social Security and cutting its dedicated source of funding.
“Nearly 90% of Social Security’s funding comes from payroll contributions, and if Trump terminated payroll contributions, the other funding sources would be insufficient,” Benesch wrote in an emailed statement. “By law, Social Security is forbidden from paying benefits if there is not sufficient revenue to cover the cost.”
Nancy Altman, the president of Social Security Works, told USA TODAY that the Social Security trust fund has a surplus of $2.9 trillion only enough to last three years without new tax revenue.
“The payroll taxes bring in close to a trillion dollars every year, and the benefits cost around a trillion dollars,” Altman said. “By 2023, there’s no more money in the trust fund.”
But Altman admitted that the administration’s actions to date “aren’t going to end Social Security.”
It’s what Trump has said he will do terminate the tax that they believe is equivalent to a promise to end Social Security.
Our Rating: Partly False
Based on our research, the claim that Trump said he will “terminate” Social Security if he is reelected is PARTLY FALSE. Trump recently signed an order offering temporary relief from the payroll tax that funds Social Security, and he has repeatedly said he’d terminate the tax entirely if he’s reelected.
But ending the tax that pays for Social Security and ending the Social Security program itself are not the same. When asked, Trump said he the measures would have “zero impact” on Social Security, and he said he’d “protect” the program. And it’s true that he could advocate an alternate source of funding, like the general fund although it would have to go through Congress first.
Trump Currently Favors Indirect Solutions To Resolve The Program’s Cash Shortfall
Keeping the previous point in mind, it shouldn’t surprise anyone to learn that Trump’s existing position on Social Security is that it shouldn’t be directly amended. Rather, the president favors bolstering the program by improving growth for the U.S. economy.
In December 2017, Trump signed his flagship legislation to this point, the Tax Cuts and Jobs Act, into law. This major overhaul of the U.S. tax code provided a modest tax cut for most workers, while reducing peak marginal corporate income tax rates to 21% from 35%.
How does this benefit Social Security, you ask? The 12.4% payroll tax on earned income is the program’s workhorse. It brought in $885 billion of the just over $1 trillion collected in 2018. If more people are working, and wages are rising, the assumption is that more payroll tax is being collected. That, in turn, could improve Social Security’s outlook, which appears to have been what occurred in 2018.
Keep in mind, though, that no amount of fiscal policy can prevent a slowdown in growth or a recession, meaning the indirect approach to fixing Social Security will fail over the long run.
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Everything You Need To Know About Trump’s Views On Social Security
According to the newest report from the Social Security Board of Trustees, the $2.9 trillion in asset reserves that have been built up since the program’s inception more than eight decades ago are expected to be completely exhausted by the year 2035. This expected net cash flow, which is forecast to begin in 2020 and grow in size with each subsequent year, is the result of a multitude of ongoing demographic changes, as well as inaction on the part of lawmakers in Washington, D.C. Should Congress fail to act, then-current and future retirees could see their monthly retired worker checks cut by as much as 23%.
Because of Social Security’s known importance — 62% of current retirees lean on their monthly benefit for at least half of their income — it pays for the American public to understand how each candidate, including the sitting president, views the program and potential solutions. With that being said, here are nine things you should know about Donald Trump’s views on America’s greatest social program.
Federal Policy On Social Security 2017
|Cabinet White House staff Transition team|
|Polling indexes: Opinion polling during the Trump administration|
The Congressional Budget Office projected in December 2016 that Social Security’s trust funds would be depleted by 2029, leading to a 29 percent reduction in benefits in 2030 to keep the program solvent. In its annual report in 2016, the Social Security and Medicare Boards of Trustees estimated the timeframe for insolvency would be slightly longer, with the trust funds being exhausted in 2034.
Social Security, which pays out retirement and disability benefits for workers and their families, cost $905 billion in 2016 and accounted for nearly one-quarter of federal spending that fiscal year. Because of the program’s expense and projected insolvencyas well as the growing population of senior citizens in the U.S.it was frequently discussed during the 2016 presidential election. Donald Trump described himself on the campaign trail as “probably…the only Republican that doesn’t want to cut Social Security.” Trump named several individuals to serve on his transition team and in his administration, however, who support the privatization of Social Security, including former Dallas Mayor Tom Leppert and U.S. Rep. Mick Mulvaney .
This page tracked major events and policy positions of the Trump administration on social security from 2017 and 2018. This page was updated through 2018.Think something is missing? Please email us at .
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For 70 Million Americans The Presidents Bid To End The Payroll Tax Could Be The Most Important Election Issue Of All
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One way U.S. voters are being played during this presidential election campaign is the deceitful manner in which key issues are being framed for their consumption. Arguably the biggest and most important of these concerns the so-called third rail of American politics: Social Security.
President Donald Trump has vowed to kill funding for this critical, gargantuan program that nearly 70 million Americans depend on.
What? You havent heard Trump say he wants to kill Social Securitys funding? Actually, you have. Trump says he wants to kill the payroll tax which is how Social Security is funded.
Perhaps like many Americans, youre unaware of how Social Security is financed. It comes from payroll taxes that are paid by you and your employer. The past four years have convinced me that there are many other things that Trumps supporters dont seem to understand either but I digress.
If victorious on November 3rd, the president said on Aug. 8th, I plan to forgive these taxes and make permanent cuts to the payroll tax. He then added: Im going to make them all permanent.
So when Trump talks of a payroll tax cut, you might think that sounds great. A tax cut! But this is deceptive election year politics, designed to take advantage of voter ignorance. Anyone in the media thats going along with Trumps framing of this as a mere tax cut is also being played.
A Partial Or Permanent Elimination Of The Payroll Tax
The third and most recent example of President Trump’s call for Social Security benefit cuts involves his pursuit of a partial or permanent cut to the payroll tax. The 12.4% payroll tax on earned income was responsible for $944.5 billion of the $1.06 trillion that Social Security collected in 2019.
In an effort to combat the economic struggles tied to the coronavirus disease 2019 pandemic, Trump signed an executive order in mid-August that deferred payroll tax collection between Sept. 1 and Dec. 31. This deferral was designed to beef up workers’ paychecks for the remainder of 2020 but have those same workers repay what was deferred in 2021. Some states and businesses have chosen to opt out of the voluntary deferral program.
President Trump has also tossed around the idea of permanently eliminating the payroll tax, if reelected. This would allow workers to receive beefier paychecks but would remove the most critical source of Social Security’s funding. It should be pointed out that while Trump has mentioned the idea of eliminating the payroll tax on more than one occasion, no one else in his administration has taken the idea seriously, as it would leave a gaping hole in the Social Security program. Neither Democrats nor Republicans would be in favor of eliminating the payroll tax.
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Trump Payroll Plan Would Deplete Social Security By 202: Administrator
Donald TrumpFlorida GOP-led legislature passes congressional maps despite DeSantis veto threatTexas judge rules Biden administration can’t exempt migrant children from Trump-era orderNYU reports spate of attacks on Asian students in the last monthMORE‘s proposal to eliminate payroll taxes would deplete the Social Security retirement trust fund by 2023, and its disability insurance fund by the middle of next year, according to the Social Security Administration.
Absent other sources of revenue, the programs would stop paying out benefits when the funds were depleted.
In early August, President Trump signed an executive order permitting companies to stop withholding payroll taxes from their employee paychecks, a gambit to increase take-home pay.
But Trump also went a step further, promising that he would cancel the tax altogether if he were to be reelected in November, a move that has little support from either party on Capitol Hill and is unlikely to advance. Federal payroll taxes fund Social Security.
If Im victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax, he said upon signing the order.
In other words, Ill extend beyond the end of the year and terminate the tax, he added, though he did not specify whether he would seek to pay out benefits using general tax funds or other revenue sources.
Without other taxes to refill the funds or cover the benefits, they would be wiped out in a matter of years.
President Trump’s Views On America’s Most Important Social Program Have Changed Considerably Over Time
In approximately 17 months, Americans will go to the polls to decide who should lead our great country for the next four years. On one side of the aisle are nearly two dozen declared, or expected-to-declare, candidates for the Democratic ticket. On the other is incumbent Donald Trump, who announced last week that he’d be seeking his second term as president under the Republican ticket in 2020.
While there are no shortage of issues that concern the American public heading into this election, perhaps none impacts more folks, especially our nation’s elderly, than the long-term well-being of Social Security.
Donald Trump signing paperwork at his desk in the Oval Office. Image source: Official White House Photo by Shealah Craighead.
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Republicans Want To Sacrifice Your Social Security But Not Their Tax Cuts
You knew it was coming:
Senior Trump administration officials are growing increasingly wary of the massive federal spending to combat the economic downturn and are considering ways to limit the impact of future stimulus efforts on the national debt, according to six administration officials and four external advisers familiar with the matter.
While no one in the administration is advocating immediate cuts, the unease among senior Trump advisers about federal spending comes as the White House halts talks with Congress on additional emergency measures to rescue a U.S. economy facing its worst crisis in generations.
Some White House officials have gone as far as exploring policies such as automatic spending cuts as the economy improves, or prepaying Social Security benefits to workers before they become eligible, although these measures are unlikely to advance given the political stakes, said these officials and advisers, who spoke on the condition of anonymity because of the sensitivity of internal deliberations.
To begin with, two key points: 1) due to pedal-to-the-metal fiscal stimulus policy, interest rates are incredibly low so debt is very cheap, and 2) a Great Depression from inadequate stimulus during a pandemic will have far larger long-term impacts on both the debt and the deficit than up-front stimulus to maintain GDP and consumer demand.
President Trumps Record On Social Security
In 2016, the president distinguished himself from other Republicans by promising to leave Social Security alone. Over the past four years, hes pretty much done just that.
There have been no Bush-like privatization plans from the Trump administration, no Simpson/Bowles-inspired murmings over cutting benefits or raising the full retirement age. Theres been no real plan to do much of anything. The Biden campaign ad is as close as theres been to a controversy, and even that misrepresents the presidents aims.
Should Trump win in November you can expect more of the same.
I haven’t seen anything discussed on Social Security reform, Andrew Biggs, a research fellow at the conservative-leaning think tank AEI told Forbes Advisor. The president has argued against any Social Security benefit cuts but hasn’t waded into how Social Security’s long-term funding should be secured.
While this should assuage any fears about changes to the Social Security status quo and soothe soon-to-be retirees worried about cuts to their monthly checks, its less than ideal that the Trump administration has no plans to shore up Social Securitys long-term finances.
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Trump: ‘we Will Be Terminating The Payroll Tax After I Hopefully Get Elected
If that were to happen in January of next year, the Social Security Administration estimates that the Disability Insurance Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter, Goss said.
For the main Social Security Old Age and Survivors Insurance Trust Fund for retired workers, Goss said that they predict reserves would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.
In a statement reacting to the estimate, Senate Minority Leader Chuck Schumer, D-N.Y., said President Trumps plan to eliminate Social Securitys dedicated funding would endanger seniors’ Social Security and could mean the end of Social Security as we know it by 2023.
House Speaker Nancy Pelosi, D-Calif., said that the analysis shows the swift potential devastation of President Trumps reckless call to terminate the payroll tax: shattering the sacred promise of Social Security.
The letter from Goss came in response to a request from Schumer and Sens. Bernie Sanders, I-Vt., and Ron Wyden, D-Ore., after Trump said he would permanently terminate the payroll tax cut if hes re-elected in November.
Earlier this month, he said at a press conference in Bedminster, N.J., If Im victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll taxIm going to make them all permanent.