GOP Payroll Tax Cut Will Deplete Social Security Funding by 2023
by Phil Dodderidge, Vice-Chair Florida Keys Democrats
The chief actuary of the Social Security Administration released an analysis of Republican’s planned cuts to Social Security funding. Under their plan, Social Security would become permanently depleted by the middle of calendar year 2023. Don’t let that happen. Democrats will protect your Social Security.
- The president signed an executive order that suspends the payment of payroll taxes which fund Social Security until the end of the year.
The executive order halts collection of the 6.2 percent payroll tax imposed on wages for Social Security, starting Sept. 1. After signing the executive order, Trump said several times that he wanted to permanently end payroll taxes.
Aug. 8: “If I’m victorious on November 3rd, I plan to…make permanent cuts to the payroll tax. So, I’m going to make them all permanent.”
Aug. 11: “Payroll tax holiday, that’s a big, and what we’re doing is sometime after the election, if we win, we’re going to make that permanent, the payroll tax holiday. The payroll tax will be rescinded.”
Aug. 12: “On the payroll tax, we’ll be terminating the payroll tax. After I hopefully get elected, we’ll be terminating the payroll tax.”
- On Aug. 19, four senators wrote to the chief actuary of the Social Security Administration, Stephen Goss, asking for “your analysis of hypothetical legislation” that would mandate “zero percent” payroll taxes. Specifically, they wanted to know how soon the Social Security Trust Funds would be depleted if they suddenly stopped receiving any money.
- On Aug. 24, the Social Security Chief Actuary letter to Senators Van Hollen, Sanders, Wyden, and Schumer concludes:
“We estimate that OASI (Social Security’s Old Age and Survivors Insurance) Trust Fund reserves would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.”
The GOP plan to eliminate payroll taxes that fund Social Security to put more money into the pockets of working Americans may sound like a good idea, in theory. However, in reality, it is a horrible proposal for seniors because these taxes, split between employers and employees, fund Social Security and Medicare.
Employers withhold 6.2 percent of earnings of American workers and contribute another 6.2 percent of an employee’s wages to fund Social Security. “Trump’s payroll tax cut plan not only fails to help Americans struggling to get by right now, it would also completely decimate Social Security for the millions of Americans who rely on it,” said Sen. Chris Van Hollen, a Democrat from Maryland and one of the senators who sent the questions to Goss.
The August 2020 GOP and Trump plan to defund Social Security provides proof that Republicans have lied (again) to the American people in their promise(s) to protect Social Security and Medicare.
- Despite Trump’s State of the Union pledge—“We will always protect your Medi and Medicare/Medicaid, and we will always protect your Social Security. Always.”—it was less than a week before he unveiled a budget proposal that included cuts to Medicare. The previous year’s budget plan, included cuts to both Medicare, Social Security and other programs seniors rely on. When it comes to supporting seniors, Trump and the GOP have a long history of saying one thing and doing the opposite.
- Trump, who in 2016 vowed he would never cut entitlements, and supported by the GOP, is arguing in the Supreme Court to eliminate the Affordable Care Act and the protections for people with pre-existing conditions that come with it. It should be noted that should this happen, 8,300,000 Americans who contracted COVID19 would suddenly have a pre-existing condition and be ineligible for health insurance.
Republicans have a long history of proposing reforms to reduce benefit increases for future retirees. Here, however, Trump and the GOP are threatening to pull the plug on current retirees, with no alternative funding mechanism (sort of like his effort to destroy Obamacare with no substitute). Trump and his GOP enablers are proving, once again, they are not our seniors’ friends.
If the Democrats win the Presidency, Senate, and continue their majority in the House, such a proposal has ZERO chance of making it through Congress. The safety of Medicare, Social Security, and our seniors is at stake in this election.