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.
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
Biden Fires Head Of Social Security Administration A Trump Holdover Who Drew The Ire Of Democrats
President Biden on Friday fired Social Security Commissioner Andrew Saul, a holdover from the Trump administration who had alienated crucial Democratic constituencies with policies designed to clamp down on benefits and an uncompromising anti-union stance.
Saul was fired after refusing a request to resign, White House officials said. His deputy, David Black, who served as the agencys top lawyer before his appointment by former president Donald Trump, resigned Friday upon request.
Biden named Kilolo Kijakazi, the current deputy commissioner for retirement and disability policy, to serve as acting commissioner until the White House identifies a permanent nominee to lead the agency.
As the head of an independent agency whose leadership does not normally change with a new administration, Sauls six-year term was supposed to last until January 2025.
The White House said a recent Supreme Court ruling, followed by a Justice Department memo on Thursday affirming the presidents authority to remove the SSA Commissioner at will, gave the president power to treat the position like that of other traditional political appointments.
But Saul said in an interview Friday afternoon that he would not leave his post, challenging the legality of the White House move to oust him.
There was terrible abuse, he said, adding: I quite frankly feel Im doing an excellent job there.
Saul said the court opined solely on the presidents power to dismiss the housing agency head.
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Trump White House Claim The Tax Relief Will Not Impact Social Security
On Sunday, as he boarded Marine One, Trump told reporters that the executive order deferring payroll taxes for some Americans will “have zero impact on Social Security.”
“We protect Social Security,” he added, according to Fox News.
An official from the White House told USA TODAY on Tuesday that the Social Security Trust Fund is not at risk, since payment deferral is only temporary, and at present, must be paid back early in 2021. The official confirmed, though, that the president called on Congress to make the deferral permanent, thereby eliminating the tax.
Garrett Watson, a senior policy analyst at the Tax Foundation, an independent tax policy think tank, told USA TODAY that eliminating the tax is not the same as eliminating Social Security.
“Strictly speaking, Social Security could be funded using general fund revenue or alternative revenue source, so terminating a tax and terminating a program are distinct things,” he wrote in an email.
“However, it would be reasonable to ask what would happen with the program absent an alternative plan to fund it,” Watson added.
On Wednesday, Trump suggested an alternate source for the first time the general fund of government revenues per Fox Business.
Republicans Arent Going To Take Away Social Security
Without beating around the bush, the Republican Party is often associated as being the party of the well-to-do and the rich typically arent reliant in any way on Social Security income. Theres, therefore, been a long-running belief that Republicans would aim to do away with Social Security sometime in the future. This is nothing more than another in a long line of pervasive Social Security myths.
Both Democrat and Republican lawmakers on Capitol Hill have an understanding of the importance that Social Security plays in keeping some 22 million people currently receiving benefits above the federal poverty line. Though both parties may have suggested tweaking how revenue is generated for the program, neither party would remove or replace any of the three funding sources: the payroll tax on earned income, the taxation of benefits, and interest income on the programs asset reserves.
In other words, no Republican is going to advocate scraping Social Security. And even if they did, the idea would have no chance of gaining traction in Congress.
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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.
Social Security Is Facing A Nearly $17 Trillion Funding Gap
If Biden wins in November, hell have a host of issues to immediately tackle, including the ongoing response to the coronavirus pandemic, job creation, and growing the U.S. economy. But dont overlook perhaps the biggest long-term challenge facing the president: Social Securitys widening cash shortfall.
Every year, the Social Security Board of Trustees releases a report that examines the short-term and long-term outlook for the program. In each of the past 35 years, the Trustees have cautioned that long-term revenue collection wont be sufficient to cover outlays. This is a fancy way of saying that the existing payout schedule, inclusive of cost-of-living adjustments , isnt sustainable. Social Security is facing an estimated $16.8 trillion funding shortfall between 2035 when the Trustees anticipate the program will exhaust its $2.9 trillion in asset reserves and 2094. Benefit cuts of up to 24% may await retired workers as a result.
Something needs to be done soon to shore up Social Security otherwise, our nations retired workforce could be in big financial trouble in less than 15 years.
However, Biden has a plan.
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These Direct And Indirect Proposals Would Reduce Social Security’s Spending
Social Security, our nation’s most prized social program, is responsible for providing benefits to over 46 million retired workers each month and is singlehandedly pulling more than 15 million of those retirees out of poverty. It’s also a program that’s in some pretty big trouble.
Since 1985, the annually released Social Security Board of Trustees report has cautioned that the program’s long-term outlays wouldn’t cover projected revenue collection. As of 2020, Social Security’s unfunded obligations through 2094 had ballooned to a whopping $16.8 trillion. Without intervention from Capitol Hill, retired workers could face sweeping benefit cuts of up to 24%, beginning in 2035.
There’s no question Social Security needs some help, and that’s expected to start at the top, with President Trump. For the most part, Trump has maintained a hands-off approach with Social Security, choosing instead to indirectly influence the program by attempting to boost payroll tax collection via lower corporate and individual tax rates. But make no mistake about it — even though Trump has largely avoided calling for direct policy changes to Social Security, he’s previously suggested cutting benefits three separate ways.
President Trump speaking with White House reporters. Image source: Official White House Photo by Shealah Craighead.
Is The Media So Jaded It Barely Noticed That Trump Just Proposed Bankrupting Social Security And Medicare Too
By Dan Froomkin
U.S. President Donald Trump speaks on the South Lawn of the White House on July 16, 2020 in Washington, DC.
I get it. They’re tired. And it’s hard to summon outrage anymore.
But still, there’s no excuse for the lackluster reporting from major news organizations about Donald Trump’s announcement on Saturday evening that he wants to permanently eliminate the payroll taxes that fund Social Security and Medicare.
Decoupling Social Security’s funding from the payroll tax would either drain it of money or, at best, make it subject to the year-to-year political whims and gamesmanship of Congress and the president.
To defenders of the social safety net, Trump’s call was clearly an act of war.
And you might think that political reporters would take notice when a president seizes with both hands what has historically been called the “third rail of American politics.”
But to our major news organizations, it was just another day in Trumpland.
Among several other actions, Trump on Saturday released a memo calling for the deferral of four months of payroll taxes starting in September. He also : “If I’m victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax. So I’m going to make them all permanent.”
Where’s the outrage?
Like that’s a good thing.
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