Opposition Builds Against Elimination of Social Security’s Payroll Tax

Published in the Pawtucket Times on September 28, 2020

With the looming 2020 presidential elections, the National Committee to Preserve Social Security and Medicare (NCPSSM) announces its first ever Presidential endorsement, throwing its support to the Joe Biden/Kamala Harris campaign. The Washington, DC-based aging advocacy group, founded by James Roosevelt, Jr., the son of President Franklin D. Roosevelt, who is credited with founding Social Security, fears for the retirement program’s future survival under a second Trump term. NCPSSM’s endorsement breaks the National Committee’s 38-year tradition of steering clear of Presidential campaigns in order to focus its resources on House and Senate races.

NCPSSM support of Biden follows the endorsements of other aging advocacy groups including AARP, Social Security Works, Alliance for Retired Americans, Medicare for All, American Federation of Government Employees and National Treasury Employees Union.

“During the past four years, we’ve seen this president pay lip service to seniors’ needs while actively undermining their best interests, the latest example being his reckless pledge to terminate the payroll taxes that fund Social Security and Medicare,” says NCPSSM’s president and CEO Max Richtman. “As the pandemic has worsened, we have seen an abject failure to protect nursing home residents and workers, who represent 40 percent of all COVID deaths. Never in our organization’s history have we seen such a consistent level of threats to the health and retirement security of America’s seniors,” he added, noting that the most effective way to protect the solvency of Social Security is to elect Joe Biden as president,” he said.

Adds, James Roosevelt, Jr., Vice-Chairman of the National Committee’s advisory board, “By enacting Social Security, my grandfather, President Franklin Roosevelt, gave workers the promise of dignity and financial security in retirement. Thirty years later, President Lyndon Johnson signed Medicare into law, providing older Americans with affordable, accessible health insurance. There’s a reason Social Security and Medicare have been around for 85 and 55 years, respectively. Americans value and depend on them. My father and grandfather would be outraged that President Trump and his allies want to dismantle both programs. I am 100 percent behind the National Committee’s decision to endorse Joe Biden, the candidate who can be trusted to protect seniors’ earned benefits from any attempts to undermine or privatize them.”

Trump’s Changing Policy Positions on Social Security

On Oct. 4, 2016, at vice presidential debate at Longwood University, Democratic vice-presidential nominee Tim Kaine noted that in 2000, Donald Trump wrote a chapter in a book, The America We Deserve, calling Social Security a” Ponzi scheme” [an investment fraud] and stating that “privatization [of the program] would be good for all of us. ”

One month before Trump formally announced his candidacy on June 16, 2015, with a campaign rally and speech at Trump Tower in New York City, he tweeted, “I am going to save Social Security without any cuts. I know where to get the money from. Nobody else does.”

As a presidential candidate, Trump continued calling for protecting Social Security, long regarded as one of the most successful and popular social programs ever enacted by Congress. During a June political rally in 2016, Trump claimed, “We’re going to save your Social Security without killing it like so many people want to do” and throughout the 2016 presidential campaign repeatedly promised “not to touch” seniors’ earned benefits and to “protect your Social Security and your Medicare.”

Once in the Oval Office, Trump’s views changed. Congress was forced to block his proposed budget cuts and rule changes that would hurt Social Security beneficiaries, says Richtman.

“Trump has betrayed older Americans through his bungled response to the COVID pandemic and by blatantly breaking his promises to protect senior’s cherished social insurance programs. He has proposed more than $1 trillion in cuts to Social Security, Medicare and Medicaid. He has vowed to eliminate the payroll taxes that fund seniors’ retirement and health benefits if re-elected to a second term. He has urged the Supreme Court to strike down the Affordable Care Act, which improved Medicare benefits and solvency. In short, the President has listened to advisors who want to dismantle the country’s most effective social safety net programs” says NCPSSM’s top official.

A Stark Warning

On August 8, Trump has signed an Executive Order, Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster, to authorize a payroll tax holiday/deferral to give American taxpayers extra cash as they deal with the coronavirus pandemic. The president’s action allows employers to stop deducting the 6.2 percent employee payroll contribution toward Social Security for the rest of the year.

An Aug. 28 IRS memo noted that employers who participate in the payroll tax holiday will then have to pay back the taxes starting in 2021. Simply put, more money will take out paychecks from Jan. 1 to April 30 in 2021 to repay the taxes owed.

Richtman warns, don’t count on payroll tax forgiveness. “Unless Congress passes legislation to address this, the workers will ow every cent of that payroll tax deferral in 2021, and employers would have to deduct more from their paychecks starting January to repay it,” her says.

NCPSSM, Democratic lawmakers, and Social Security advocacy groups don’t see Trump’s elimination of the Social Security payroll taxes as an effective economic stimulus especially to unemployed workers. This action could effectively defund the Social Security and Medicare programs could ultimately bankrupt these programs.

In the letter released on Sept. 23 , Nancy A. LeaMond, AARP’s Executive Vice President and Chief Advocacy and Engagement Officer said “As AARP raised in letters to Congress back in March and President Trump and Treasury Secretary Mnuchin in August, we believe suspending, reducing, or eliminating contributions to Social Security will interfere with the program’s long-term funding stream… This deferral, along with the President’s recent statements on the permanent elimination of the Social Security payroll tax contribution, are engendering uncertainty among older Americans and the general public about Social Security and its ability to pay promised benefits. As such, AARP supports the resolution of Congressional disapproval.”

Trump counters NCPSSM, AARP and others condemning his Executive Order. He claims that eliminating the Social Security tax would not impact the solvency of Social Security, because the money would be shifted from the government’s general fund. Both continuing his payroll tax cut and shifting funds would require Congressional action. That, also, would require an act of Congress.

With this first time political endorsement, NCPSSM hopes to see a Democratic administration take over the White House to strengthen and expand Social Security, not weaken it by eliminating the program’s payroll taxes. “After nearly four decades of fighting to protect American seniors, the National Committee has determined that many older Americans cannot afford – let alone survive – another four years of President Trump. By endorsing Joe Biden and Kamala Harris today, we will work tirelessly to help voters of all ages understand that Trump’s promises are empty. He offers seniors a one-way ticket to nowhere. Americans deserve a President who will protect and strengthen the federal government’s commitment to older Americans.”

This article was updated on Sept. 24.

Social Security – the Third Rail in Politics

Published in RINewsToday.com on May 17, 2020

As Congress begins to hammer out the fifth coronavirus stimulus package to continue its efforts to jump start the nation’s economy, President Donald Trump warns he will not sign any bill that does not include a payroll tax cut.

“We’re not doing anything without a payroll tax cut,” President Trump said at a two-hour “virtual town hall” event hosted by Fox News, at the Lincoln Memorial in Washington, D.C. According to Nielson Media Research, nearly 4 million viewers tuned into this the town hall, titled “America Together: Returning to Work,” on May 3rd, that focused on COVID-19 and the reopening of the nation’s economy.

Aging advocates and Democratic lawmakers charge that President Trump is using the virus pandemic as an excuse to slash payroll contributions, Social Security’s dedicated funding. Cutting the Social Security payroll taxes would reduce the amount of money withheld from employee paychecks, increasing their take-home pay. Republican lawmakers see it as a much-needed relief for hurting Americans. And so it goes…

Payroll Tax Cuts: Reducing Social Security’s Financial Stability

The Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM) quickly released a statement warning that removing the payroll tax by a provision in the next COVID-19 stimulus package will ensure the fiscal insolvency of Social Security. 64 million Americans depend on Social Security benefits in their retirement years.

“President Trump set off alarm bells for America’s seniors and their advocates by insisting once again on eliminating Social Security payroll taxes – both employer and worker contributions. The President even threatened to hold hostage the next phase of badly needed Coronavirus relief legislation unless he gets his reckless payroll tax cuts. Make no mistake: by pushing to cut off the program’s funding stream, President Trump is taking the first step toward dismantling Social

“While we agree that providing tax relief to middle class Americans is an important consideration as we respond to the coronavirus pandemic, we do not believe that cutting, eliminating or deferring the Social Security payroll tax is an appropriate way to accomplish this goal, says Richtman, reminding the president in a letter that Social Security is an earned benefit fully funded by the contributions of workers throughout their working lives.

He pointed out that a payroll tax cut is an assault on that fundamental idea, equally true even if the funds are replaced by general revenues from the Treasury.

In his correspondence, Richtman suggests that a payroll tax cut should not be viewed as an economic stimulus because it leaves out large segments of the population. “Large numbers of federal, state and local government workers do not pay into Social Security, and therefore would not benefit from the payroll tax cut. Ironically, the senior population, those who are directly affected by taking their money from the trust fund, will not see a single dime of relief since most of them are not working,” he notes.

Richtman identified alternatives to the payroll tax cut that he believes would be more targeted and effective to fire up an economy slowed by the spread of the coronavirus. “Another one-time payment by the federal government can put money in the hands of taxpayers quickly, and the Making Work Pay Tax Credit can be passed by Congress rapidly as can an expansion of the Earned Income Tax Credit. Spending in other programs that directly help those who lose employment as a result of the virus can be the most targeted relief of all,” he suggests.

“In light of the recent Social Security Trustees report, it is clear that Social Security needs more revenue – not less,” observes Richtman, who served as a former staff director of the Senate Special Aging Committee.

While Democratic lawmakers push for strengthening and expanding the Social Security Program, GOP lawmakers are signaling their opposition to risking political capital on supporting the effort to cut the payroll tax. Sen. Chuck Grassley (R-Iowa), the Senate Finance Committee chair, responded, when asked by Politico, if he supports the tax cut, “Right now, not much.”

“I’m going to give it due consideration, if I can see a strong group of people who think it’s the right thing to do,” added Grassley, whose Senate committee oversees federal tax policy.

Although Senate Majority Leader Mitch McConnell (R-Kentucky) is not ruling out payroll tax cuts, he is focusing his efforts to put liability protections provisions in the next major stimulus package to protect businesses against virus-related lawsuits from workers, stockholders, and consumers.

Political insiders consider Social Security to be the “third rail of a nations politics.” Wikipedia states that this metaphor comes from the high-voltage third rail in some electric railway systems. Stepping on it usually results in electrocution and the use of the term in the political arena refers to “political death.”

Can President Trump politically survive, keeping his loyal voter base, if he steps on the “third rail” by continuing his efforts to cut payroll taxes, some say seen as pushing the Social Security program toward fiscal insolvency? When the dust settles after the upcoming November 2020 elections, we’ll see if the older voters consider Social Security an untouchable program.

Search on for GOP Senators to Protect Medicare

Published in Woonsocket Call on January 29, 2017

Since President Donald Trump took the oath of office on January 20, he is making good on some of his hundreds of campaign promises. During his first week in office Trump signed three executive orders declaring new government policies and eight presidential memoranda detailing the priorities of his new administration.

But, for aging groups, with Trumps arrival in Washington, D.C, the skirmish officially begins to protect Medicare in this new session of Congress.

With Trump and Congressional Republican Leadership on record for their support of repealing the 2010 Affordable Care Act, popularly known as Obamacare, President and CEO Max Richtman, of the National Committee to Preserve Social Security and Medicare (NCPSSM), clearly sees the writing on the wall. If successful, Richtman warns that GOP legislative actions will severely damage Medicare impacting 57 million seniors and disabled adults who rely on the program for their health care.

Building A Firewall Against Privatizing Medicare

With the GOP holding a slim majority of the U.S. Senate seats, 52 to the Democrats 48 seats, Richtman sees swaying Republican Senators away from their party’s position on privatizing Medicare to protect the federal health care program.

On January 24, 2017, Richtman urged Senator John McCain (R-AZ), Senator Susan Collins (R-ME), Senator Charles Grassley (R-IA), and Senator Lamar Alexander (R-TN) to be the Senate’s “firewall against Medicare cuts.” His correspondence asked them to vote against proposals to privatize Medicare, raise the Medicare eligibility age from 65 to 67, and repeal provisions in the Affordable Care Act (ACA), President Barack Obama’s landmark health care law, that provided additional benefits to beneficiaries.

Richtman reminded the GOP Senators that the Affordable Care Act (ACA) improved Medicare benefits and extended the solvency of the Part A Hospital Insurance Trust Fund by more than a decade. ACA’s closing of the prescription drug donut hole has put money into the pockets of Medicare beneficiaries. The health care law also added coverage of an annual wellness visit and eliminated copays for preventive services like cancer screenings, he said.

“I am also troubled by “premium support” [GOP] proposals to privatize Medicare,” says Richtman. According the aging advocate who was a former staff director of the U.S. Senate Special Committee on Aging and a 16-year veteran of Capitol Hill, under previous privatization plans, beneficiaries would not enroll in the current program; rather, they would receive a capped payment or voucher to be used to purchase private health insurance or traditional Medicare. Private plans would have to provide benefits that are at least actuarially equivalent to the benefit package provided by fee-for-service Medicare, but they could manipulate their plans to attract the youngest and healthiest seniors. This would leave traditional Medicare with older and sicker beneficiaries whose higher health costs would lead to higher premiums that they and others may be unable or unwilling to afford, reducing the fee for service risk pool even further resulting in a death spiral for traditional Medicare.

GOP Medicare Fix Financially Hurts Beneficiaries

Richtman also told the GOP Senators that NCPSSM opposed the raising of the Medicare eligibility age from age 65 to 67 because the proposal would increase costs for millions of older Americans. Absent the guarantees in the existing ACA, such as requiring insurance companies to cover people with pre-existing medical conditions and limiting age rating, millions of seniors 65 and 66 without Medicare would find private insurance unaffordable. Raising the eligibility age would also increase average costs for Medicare as younger, healthier seniors are eliminated from the risk pool and costs are spread across an older, less-healthy population, he says.

Richtman urged the GOP Senators to oppose efforts underway in the 115th Congress to block grant Medicaid, cap Medicaid payments on a per-beneficiary basis (per capita caps) and/or repeal the ACA’s Medicaid expansion. He noted that these policy changes would “financially hurt states and lead to states cutting services, quality and eligibility for the most vulnerable of our senior population.”

Many seniors would not be able to absorb the loss of coverage and increase in their costs that would occur if these proposals became law. In fact, half of all Medicare beneficiaries in 2014 had incomes below $24,150 and Medicare households spent over two times more than the average American household on out-of-pocket health care costs,” he says.

“If Senate Democrats stand strong, we only need a handful of Republicans to protect the commitment to Medicare,” says Richtman. “We hope Senators McCain, Collins, Grassley, and Alexander to do the right thing for seniors in their states – and across America.”

Richtman correspondence to the four GOP Senators is part of NCPSSM’s pro-active legislative strategy to protect the existing Medicare program. The letters sent quantify the economic impact that proposed Medicare cuts would have on seniors in the four GOP Senators’ states: Arizona (with 1.3 million beneficiaries), Maine (306,000 beneficiaries), Iowa (nearly 572,000 beneficiaries), and Tennessee (1.2 million beneficiaries).

“We know that these four Republican Senators have the wisdom and judgment to protect seniors in their states from legislation that would impose painful Medicare cuts,” says Richtman. “It’s time to slam the brakes on any attempts to pass harmful legislation.”

Senate Democrats Attempt to Block HHS Nomination

Two days before Trump was sworn in as president, the Senate Health, Education, Labor and Pensions (HELP) Committee held confirmation hearing on Rep. Tom Price, (R-Ga), Trump’s nominee to oversee the Department of Health and Human Services, the federal agency that oversees the Medicare program. In confirmed, he is expected to play a key role in the GOP’s efforts to privatize Medicare.

No formal vote was taken at the HELP Committee hearing but the Congressman is scheduled to testify a week later at the Senate Finance Committee, which will vote on his nomination.

During the four-hour heated confirmation hearing, held in 430 Dirksen Senate Office Building, HHS nominee Price dodged questions lobbed by Democrats about the Trump Administrations position on the future of Medicare. They also zeroed in on his personal financial investments in health care companies, calling them conflicts of interest which the denied.

Price, an orthopedic surgeon and a six term congressman, considered to be one of the most vocal critics of Obamacare on Capitol Hill, is expected play a key role in the GOP’s efforts to repeal and replace the Affordable Care Act.

Rhode Island Sen. Sheldon Whitehouse, sitting on the HELP Committee, gave this take on Price after the first of two confirmation hearings: “Price hasn’t been able to win Democratic support for any of his health care legislation [in the House] and today confirmed that he and his allies have no plan that can win support from across the aisle or the millions of Americans who would be affected by tearing down the Affordable Care Act. He conceded that he should not stop Americans under twenty-six from staying on their parents’ insurance, re-open the dreaded prescription drug doughnut hole for seniors, deny coverage to those with pre-existing conditions, and reinstate lifetime limits on care. But he has no plan to make that happen.”

Adds Whitehouse, “Price also failed to reassure the Rhode Islanders I serve who rely on Medicare for their care. He has fought to voucherize the program, which would gradually unload costs onto seniors while eroding their benefits. He needed to tell the American people they could depend on him to faithfully administer Medicare and keep the sacred promise we’ve made to our seniors of a dignified retirement with access to good health care. He did not.”

“Congress must protect Social Security and Medicare, but many Republicans see the latest election results as an opportunity to hollow out these vital programs. President Trump’s pick to oversee Medicare has long championed efforts to privatize Medicare, which I strongly oppose. Cutting benefits and privatizing these programs could hurt millions of Americans and harm our economy,” said Sen. Jack Reed, noting that these programs reduce poverty and improve public health in ways that benefit all Americans.

As NCPSSM’s Richtman continues his effort to sway GOP Senators, rallying the troops at the state-level may well be the path to blocking GOP attempts to privatize Medicare. Voters in states with Republican Senators must send this message to their elected official, “don’t touch my Medicare.” Let the movement to strengthen Medicare in these states begin today.