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.
A Call For Means Testing
Another pathway to Social Security benefit cuts, loosely proposed by President Trump while on the campaign trail four years ago, is means testing, which would partially or fully phase-out benefits for individuals who earn more than preset income thresholds. In other words, it would keep well-to-do seniors from receiving a full benefit or perhaps any benefit at all, if they aren’t reliant on their Social Security income to make ends meet.
Trump has previously suggested that he wouldn’t take a Social Security benefit and that other wealthy individuals should follow suit. However, without seeing Trump’s tax returns, it’s unknown whether or not the president is currently receiving a monthly payout from the program.
Additionally, it’s worth pointing out that President Trump has never made means testing for Social Security benefits an official proposal. It was merely a discussion point tossed out by Trump prior to his 2016 election as a way to reduce Social Security’s long-term outlays.
Release: Trump Plan To Permanently Cut Social Security Taxes Would Drain The Programs Trust Fund By 2025
- Date: August 13, 2020
- Contact: Julia Cusick
- Email: gro.ssergorpnacirema& commat kcisucj
Washington, D.C. A new analysis from the Center for American Progress shows just how quickly Social Securitys trust fund would be exhausted and benefits cut if President Donald Trump permanently cuts payroll taxes, as he said he wanted to do in recent days.
In Trumps Plan To Defund Social Security, Seth Hanlon and Christian E. Weller find that cutting payroll taxes for the last four months of the year would delay about $100 billion in tax revenue from going to the Social Security trust fund. However, if the president were to eliminate the employee payroll tax not only for this fall but permanently, as he vowed to do in a second term, the trust fund would run dry by either 2025 or 2026. This threatens a dramatic loss of income for tens of millions of retirees, disabled people, and surviving spouses and children of workers.
Trumps latest comments on Social Security come on the heels of his that Social Security and Medicare cuts would be on the table in his second term. Trump famously pledged not to touch Social Security but then his administration proposed cuts to the program in each of its budgets.
Based on the latest Social Security trustees projections, Hanlon and Weller estimate:
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Fact Check: Trump Claims Biden Wants To ‘close All Charter Schools’ That’s False
“Biden also vowed to oppose school choice and close all charter schools, ripping away the ladder of opportunity for Black and Hispanic children,” Trump claimed on Tuesday night.
This is false. The Biden campaign does not oppose charter schools, though they’ve advocated against for-profit charter schools and supported different regulations and oversight of the schools.
And while “school choice” is a buzzy word, it can means different things to different people. Trump supports letting students take federal funds to private schools, something Joe Biden and many Democrats oppose, instead supporting allowing families to make choices within publicly-funded school districts.
President Trump Wont Destroy Social Securitybut Hes Not Going To Save It
Former Vice President Joe Biden is running campaign ads that claim President Trump signed an executive action directing funding cuts for Social Security and proposed slashing hundreds of billions of dollars from the Social Security Trust Fund every year.
The problem is, however, that this just isnt so.
A Biden campaign TV ad falsely claims that a government analysis of President Donald Trumps planned cuts to Social Security shows that if Trump gets his way, Social Security benefits will run out in just three years from now, says FactCheck.org.
The cliche politics aint beanbag exists for a reason: Campaigns use overhyped rhetoric to distort their opponents positions and make them appear less electable. Seniors should rest easy and understand that their Social Security benefits arent going anywhere.
But this dynamic of misleading charges belies a more fundamental problem: Something will eventually need to be done to buttress Social Securitys finances. Episodes like this dont bode well for future attempts to reform Social Security.
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Ap Fact Check: Trump Payroll Tax Cut Is Social Security Risk
BALTIMORE President Donald Trumps proposed payroll tax cut is a threat to Social Security no matter how he casts it.
During a news conference Wednesday, he insisted he could eliminate the tax if he were reelected, and do it without undercutting retirement benefits or greatly adding to the deficit. He said economic growth would offset the revenue losses.
That claim has little basis in reality.
He also pointed to a manufacturing boom during the coronavirus pandemic but there isnt one.
A look at some of his economic claims:
TRUMP: At the end of the year, the assumption that I win, Im going to terminate the payroll tax … Well be paying into Social Security through the General Fund.
THE FACTS: Trump, in effect, has proposed a dramatic restructuring of how Social Security is financed by not relying on the payroll tax as a dedicated source, but instead by tapping the general fund. Trump campaign officials stressed that the general fund consists of assets and liabilities that finance government operations and could do so for Social Security. The general fund is nicknamed Americas Checkbook on the Treasury Departments website.
That average is so large that it suggests Trump either wants to eliminate the payroll tax or he did not understand his administrations own policies.
Trump The Disrupter Takes Dead Aim At Social Security
Throughout the 3 ½ years of his presidency, Donald Trump has disrupted nearly every major institution of government, save one. He has politicized the military, upended strategic alliances that have been a bedrock of US foreign policy for 75 years, overturned civil rights protections, undone the postal service, andwith help from a Republican Congressremade much of the federal income tax code.
But in his 2016 campaign, Trump vowed to leave Social Security untouched. And he has, somewhat uncharacteristically, kept that promise. Until now.
On Saturday, in a press briefing to promote a package of unilateral initiatives aimed at responding to the COVID-19 economic slump, Trump declared a longer-term goal. He announced that if reelected, he would terminate the payroll tax that funds Social Security and the payroll tax that supports the hospital insurance piece of Medicare. Currently, employers and employees each pay 6.2 percent of wages up to $137,700 for Social Security and 1.45 percent of wages for Medicare, with no cap.
Short-run deferral
Trumps unilateral deferral of the employee share of the Social Security tax is likely to have little impact on either the programs finances or the economy. His initiative will not benefit the 30 million people who have lost their jobs in the pandemic, since they earn no wages and pay no Social Security tax.
Long-run repeal
Altering the status of Social Security
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Biden Claims Trump Has Planned Cuts To Social Security By Killing The Payroll Tax What Are The Facts
CHARLOTTE, NORTH CAROLINA – AUGUST 24: U.S. President Donald Trump waves on the first day of the … Republican National Convention at the Charlotte Convention Center on August 24, 2020 in Charlotte, North Carolina. The four-day event is themed “Honoring the Great American Story.”
Last week, I objected to Kamala Harriss claim that Trumps plan would cause Social Security checks to stop coming.
Now, the Biden campaign itself has a commercial, with Biden-approved text:
The Chief Actuary of the Social Security Administration just released an analysis of Trumps planned cuts to Social Security. Under Trumps plan, Social Security would become permanently depleted by the middle of calendar year 2023. If Trump gets his way, Social Security benefits will run out in just 3 years from now. Dont let it happen. Joe Biden will protect Social Security.
I cant even begin to say how false this is.
The Chief Actuary did not release an analysis of Trumps planned cuts. They responded to a request by Senate Democrats to evaluate a hypothetical scenario in which payroll taxes were eliminated without replacement. But Donald Trump has said, of his proposal to eliminate payroll taxes, That money is going to come from the General Fund. In other words, it will be funded by the same set of revenues and borrowed money as every other sort of expense of the federal government that doesnt have a dedicated revenue source.
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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The Claim: President Donald Trump Promised To ‘terminate’ Social Security If He Is Reelected
Recent posts from Social Security Works a nonprofit focused on expanding Social Security, improving Medicare and lowering the cost of prescription drugs claim that President Donald Trump will end Social Security if he is reelected.
“Donald Trump says he will ‘terminate’ Social Security if reelected,” a post on Monday reads. “A vote for Trump is a vote to destroy our social security system.”
“Millions of seniors and people with disabilities struggle to make ends meet,” another post from the same day reads. “Yet Donald Trump says he will ‘terminate’ Social Security if reelected. That’s a disastrous plan.”
The posts come after Trump signed a series of executive orders on Aug. 8 intended to provide relief from the detrimental economic impact of the coronavirus pandemic.
More:Trump again threatens executive orders to extend benefits after stimulus talks fall apart
Biden Campaign Attacks A Trump Social Security Plan That Does Not Exist
The chief actuary of the Social Security Administration just released an analysis of Trumps planned cuts to Social Security. Under Trumps plan, Social Security would become permanently depleted by the middle of calendar year 2023. If Trump gets his way, Social Security benefits will run out in just three years from now. Dont let it happen. Joe Biden will protect Social Security.
Voice-over in a new ad by Joe Biden, Depleted, released Sept. 3
Without fail during a tough election season, Democrats bring up Social Security. The ads are often ubiquitous in states with high percentages of senior citizens who rely on Social Security as their main source of income.
Trump gets mentioned in this ad three times. But there is no such Trump plan.
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Bidens False Attacks On Trumps Social Security Plan
A Biden campaign TV ad falsely claims that a government analysis of President Donald Trumps planned cuts to Social Security shows that if Trump gets his way, Social Security benefits will run out in just three years from now.
The Social Security Administrations chief actuary analyzed hypothetical legislation that would eliminate the payroll tax that funds Social Security not a proposal from Trump. The president has said he wont cut benefits.
Democratic presidential nominee Joe Biden and others who oppose Trumps reelection have capitalized on confusing statements Trump made in August. He has said on multipleoccasions that, if reelected, he would look at ending or terminating the payroll tax.
But White House and Trump campaign officials have said the president actually wants to forgive a four-month payroll tax holiday he authorized via executive action last month. Trump himself has said: hen I win the election, Im going to completely and totally forgive all deferred payroll taxes without in any way, shape or form hurting Social Security. That money is going to come from the general fund.
Biden, though, has repeatedly claimed that Trump has a plan that would bankrupt,defund, or wipe out the Social Security program.
Advertising Analytics says the Biden campaign has spent over $1.3 million on the 30-second commercial, which has aired more than 5,500 times in swing states like Michigan and Arizona since Sept. 3.
What Has Trump Said?
What Does He Mean?
Trumps Plan To Defund Social Security
On August 8, at his golf club in Bedminster, New Jersey, President Donald Trump announced that his administration is seeking to delay much of the payroll tax that funds Social Security1 of 4 unilateral actions he took in lieu of negotiating with Congress on meaningful economic relief legislation. The president also said that if he is reelected, he wants not only to turn the delay into a tax cut that would result in significant revenue losses for Social Security, but also to eliminate employee payroll taxes for good. As our analysis based on the Social Security trustees projections shows, eliminating employee payroll taxes along the lines that the president has proposed would, absent additional action, completely exhaust the Social Security trust fund by 2026 or earlier and result in steep benefit cuts.
Trump has made clear that he wants the tax that is delayed this fall under his unilateral action to be permanently forgiven, which would result in a permanent revenue loss of about $100 billion for Social Security. At the Bedminster press conference, President Trump also stated, If Im victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax. Trump doubled down on these comments on Monday, August 10, reiterating, After the election, on the assumption that it will be victorious for an administration thats done a great job, we will be ending that tax, well be terminating that tax.
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