Trump Deferred The Tax That Funds Social Security And Vowed To ‘terminate’ The Tax In The Future
The vast majority of Social Security is financed through the payroll tax, according to the Social Security Administration. In 2019, 89% of Old-Age and Survivors Insurance and Disability Insurance was financed via payroll taxes equal to $944.5 billion.
One of the Aug. 8 executive orders instructed the Treasury Department to allow employers to defer payment of payroll taxes for employees who make less than $100,000 each year.
The deferrals, which may start Sept. 1 and extend through 2020, are intended to allow Americans to use the totality of their income amid the pandemic’s hardships.
The order also instructed Treasury Secretary Steven Mnuchin to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred” a goal Trump reiterated in remarks after he signed the order.
If Im victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax,” Trump said, per the Washington Post. Im going to make them all permanent.
“In other words, I’ll extend it beyond the end of the year, and terminate the tax,” he added. He reiterated his plan at a press conference on Monday.
“We will be ending that tax. We will be terminating that tax,” Trump said, per a transcript from CNN. “The payroll tax is a big deal for people. It’s a tremendous saving for people. And we’re going to be doing it, and we intend to terminate it at the end of the appropriate period of time.”
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.
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Other proposals would cut down on reimbursement rates to healthcare providers, reducing how much doctors, hospitals, and hospices are paid for providing healthcare. Cutting Medicare reimbursement rates is a controversial strategy in the past, its received both support and criticism from Democrats and Republican alike. Some say cutting reimbursement rates saves taxpayers money by cutting into medical industry profits. And the Trump administrations budgets highlights specific instances where they believe reimbursement rates for doctors are excessive: for example, they cite the fact that doctors offices owned by hospitals are often paid more for performing the same procedures than independent physicians.
But cutting reimbursement rates also means that some seniors could lose access to their favorite doctors. Dan Adcock, director of government relations at the National Committee to Preserve Social Security and Medicare, said of the cuts to Medicare, he was most worried about the lower reimbursement rates. When reimbursement rates decrease, “you start to affect access, because doctors decide they can’t make a decent living,” said Adcock.
The Budget Takes Aim At Social Security Disability Insurance
Trumps proposed budget contains a number of changes to Social Security Disability Insurance . SSDI is a federal program that protects workers who develop a life-changing disability after having paid into the fund by earning work credits.
Veterans Issues Are a Bright Spot
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The Biden Campaigns Questionable Social Security Claims
The Biden camp justifies its claims about President Trumps proposed cuts to Social Security by pointing to the Trump administrations recent efforts to implement a payroll tax holiday as part of the ongoing efforts to blunt the economic impact of Covid-19. Payroll taxes help fund Social Security, but they are not synonymous with the program.
In August, the CARES Acts supplemental $600 weekly unemployment benefit ran out. Negotiations for a second stimulus package among the White House, the House Democrats and the Senate Republicans were going nowhere fast. In response to the deadlock in Congress, President Trump enacted a payroll tax holiday by executive order.
Ending the payroll tax has been something of a pet goal for President Trump, even though economists say it wont do much to alleviate the pain endured by laid-off workers.
At the end of the year, the assumption that I win, Im going to terminate the payroll tax, which is another thing that some of the great economists would like to see done, Trump said in mid-August. His political team tried to clarify and massage those comments later, saying Trump was referring to his executive order to defer payroll taxes.
At the end of August, the chief actuary at the Social Security Administration penned a letter saying that removing payroll taxes would cause funding for Social Security to run dry by the middle of 2023.
Is Trump Defunding Social Security And Medicare Concerns Mount After President’s Executive Order
President Donald Trump’s Saturday decision to sign an executive order to defer payroll taxes has fueled concerns that he is attempting to defund Social Security and Medicare, with the latest order drawing criticism from conservatives and liberals alike.
“First one is on providing a payroll tax holiday to Americans earning less than $100,000 per year,” the president said during a Saturday press briefing. “In a few moments, I will sign a directive, instructing the Treasury Department to allow employers to defer payment of the employee portion of certain payroll taxes…”
Trump said that he would make the temporary tax deferral permanent if he was re-elected in November. “So I’m going to make them all permanent,” he said.
Notably, this is not a tax cut. Under the wording of the executive order, the payments would simply be deferred until next year unless further actions were taken.
Whether Trump’s executive orders, which also provided an extension of extra federal unemployment benefits at a reduced rate of $400 per month, will withstand legal scrutiny is a matter of debate. His decision came as Republicans and Democrats in Congress remained at an impasse over a new round of coronavirus economic stimulus legislation. Under the Constitution, Congress, not the Executive Branch, is granted power over spending federal funds.
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Trump Opens Door To Cuts To Medicare And Other Entitlement Programs
The president signaled a willingness to scale back Medicare, a shift from his 2016 platform of protecting entitlement programs.
WASHINGTON President Trump suggested on Wednesday that he would be willing to consider cuts to social safety-net programs like Medicare to reduce the federal deficit if he wins a second term, an apparent shift from his 2016 campaign promise to protect funding for such entitlements.
The president made the comments on the sidelines of the World Economic Forum in Davos, Switzerland. Despite promises to reduce the federal budget deficit, it has ballooned under Mr. Trumps watch as a result of sweeping tax cuts and additional government spending.
Asked in an interview with CNBC if cuts to entitlements would ever be on his plate, Mr. Trump answered yes.
At some point they will be, Mr. Trump said, before pointing to United States economic growth. At the right time, we will take a look at that.
Mr. Trump suggested that curbing spending on Medicare, the government health care program for the elderly, was a possibility.
Were going to look, he said.
Spending on Social Security, Medicare and Medicaid is expected to cost the federal government more than $30 trillion through 2029, according to the Congressional Budget Office.
In a tweet in May 2015, a month before he formally began his campaign, Mr. Trump discussed another Republicans promises to keep entitlements intact, former Gov. Mike Huckabee of Arkansas.
Trump Suggested Medicare And Social Security Are The ‘easiest’ Things To Cut Democrats Pounced
President Trump backtracked Wednesday on his 2016 campaign promise to protect funding for entitlements like Medicare and Social Security, suggesting in an interview with CNBC that he would be open to slashing “at some point” them since they’re “the easiest” thing to cut.
Well, unsurprisingly, that didn’t sit well with his Democratic opponents, who quickly pounced on the comment.
OOPS. Trump just told on himself.He said he’s looking to cut your Medicare and Social Security because it’s “the easiest of all things” to cut.
DNC War Room
Sen. Elizabeth Warren , who is one of the leading candidates in the Democratic presidential primary, used Trump’s words to call for an expansion of such programs, while the House Ways and Means Committee the suggestion “unacceptable.” Rep. Bill Pascrell thinks it’s a warning from Trump that people should take seriously.
Trump is in court trying to destroy the ACA and steal your health care. That’s not all. He’s openly admitting that if he’s re-elected he’ll go after Social Security and Medicare next. Believe him.
Bill Pascrell, Jr.
Trump’s reasoning for possibly cutting entitlements is that the trajectory of the country’s economic growth could one day allow for it. But don’t expect that to change any minds on the other side of the political aisle.
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Trump’s Election Year Budget Proposal Slashes Medicaid Other Social Safety Nets
WASHINGTON President Donald Trump unveiled a $4.8 trillion election-year budget plan on Monday that recycles previously rejected cuts to domestic programs like food stamps and Medicaid to promise a balanced budget in 15 years all while leaving Social Security and Medicare benefits untouched.
Trumps fiscal 2021 plan promises the government’s deficit will crest above $1 trillion only for the current budget year before steadily decreasing to more manageable levels, relying on optimistic economic projections, lower interest costs, scaled-back overseas military operations and proposed cuts to agency budgets that run counter to two previous budget deals signed by Trump.
The budget sets the course for a future of continued American dominance and prosperity, Trump said in a message accompanying the document.
There is optimism that was not here before 63 million Americans asked me to work for them and drain the swamp, Trump said. For decades, Washington elites told us that Americans had no choice but to accept stagnation, decay, and decline. We proved them wrong. Our economy is strong once more.
The plan had no chance even before Trump’s impeachment scorched Washington. Its cuts to food stamps, farm subsidies, Medicaid and student loans couldn’t pass when Republicans controlled Congress, much less now with liberal House Speaker Nancy Pelosi, D-Calif., setting the agenda.
Taking Scissors To Safety Net
That sinking feeling youll get if Donald Trump is elected to a second term will be caused by plummeting through the hole in your safety net. The one he plans on cutting.
Social Security snip, snip.
Medicare snip, snip.
Medicaid snip, snip.
In his most recent town hall among some friendly hosts from FOX News the president was asked about plans for his next term, should he be reelected. He spoke of how he believes the economic growth will be tremendous. One of the hosts cut in, saying, But if you dont cut something in entitlements
And Trump interrupted, saying, Oh, well be cutting.
The presidents mostly silent press secretary, Arizonas own Stephanie Grisham, tried to soften the blow by asking people not to hear what they actually heard, tweeting, Fake news POTUS was taking about cutting deficits, NOT entitlements.
He was talking about cutting entitlements.
And it isnt the first time hes said this.
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How Trump Is Proposing Changing Medicare Medicaid And Social Security
When it comes to Medicare, the White House has been very clear: Hes not cutting Medicare in this budget, Vought said. What we are doing is putting forward reforms that lower drug prices. Because Medicare pays a very large of drug prices in this country, has the impact of finding savings. We are also finding waste, fraud, and abuse.
Heres whats actually happening: This budget proposes finding $845 billion in savings over 10 years from Medicare as we know it. But $269 billion of that figure is reclassified under the Department of Health and Human Services, bringing the Medicare cuts to $575 billion. As Vox explained, the administration says it will achieve these cost reductions by targeting wasteful spending and provider payments and lowering prescription drug costs.
The Committee for a Responsible Federal Budget, which advocates for fiscal responsibility, estimates that 85 percent of these cuts will come from reductions in provider payments, 5 percent would come from policies around medical malpractice, and 11 percent would come from reducing drug costs through the Medicare Part D program. Medicare Part D is the only area of these reforms that could raise out-of-pocket drug prices for some while lowering it for others. Otherwise, premiums, deductibles, and copays would largely be left unaffected.
But when it comes to Trumps proposed changes to Medicaid and Social Security, the intent is unambiguous: These are cuts to benefits.
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.
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.
Altering the status of Social Security
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Trump Broke This Promise From The Beginning
This is Trump on the campaign trail in 2015:
I was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare & Medicaid. Huckabee copied me.
Donald J. Trump May 7, 2015
Trumps budgets and the policies he has supported around health care and government spending in Congress reflect the opposite. Some of this can be attributed to Trumps appointed budget chief Mick Mulvaney the former Congress member who was part of the ultraconservative Freedom Caucus has long rallied for cutting Medicare, Social Security, and Medicaid.
In fact, Mulvaney once bragged to a Politico reporter that he tricked Trump into accepting a proposal to cut Social Security by calling SSDI just disability insurance spinning it to the president as general welfare reform. The idea has been in every single one of Trumps budget proposals to Congress since the president came to office.
Then there was the Republican Obamacare repeal push every bill proposed massive cuts to Medicaid in order to pay for tax cuts elsewhere. Trump supported every iteration of Republicans Obamacare repeal-and-replace bills. He even held a party for House Republicans in the White House Rose Garden when the lower chamber of Congress narrowly passed a proposal that slashed more than $800 billion from Medicaid over 10 years.
Now his policy positions around those programs break from that promise.