Trump’s Campaign Pledges Could impact Social Security’s Financial Stability

Published in Blackstone Valley Call & Times on November 4, 2024

When voters go to the polls on Tuesday, they should know that Social Security will only be nine years away from insolvency when the next President takes office. According to projections by the Congressional Budget Office (CBO), the law calls for a 23 percent cut in Social Security reductions in fiscal year 2034. Restoring solvency in the retirement program over the next 75 years would require the equivalent of reducing all future benefits by 24 percent or increasing revenue by 35 percent, says CBO.

As the presidential campaign winds down, with voting taking place on Nov. 4, 2024, Vice President Kamala Harris calls for protecting and expanding Social Security while former President Trump says would “fight for and protect Social Security.” But both candidates don’t provide a specific detail plan as to how to fix the financially ailing Social Security program, despite the looming $16,500 cut facing a typical couple retiring just before the projected insolvency.

But campaign promises, if enacted, can have a devastating impact on the Social Security Programs ability to pay all future benefits.

Analysis Shows Campaign Promises Weaken Social Security

A new report, “What Would the Trump Campaign’s Mean for Social Security,” released by US Budget Watch 2024, a project the Committee for a Responsible Federal Budget (CRFB), details how former President Donald Trump’s proposed policies, if enacted, would advance Social Security’s insolvency by three years, from FY 2034 to FY 2031 – hastening the next President’s insolvency timeline by one-third. CRFB is a non-partisan government watchdog group based in Washington, D.C. that analyses the fiscal impact of federal budget and fiscal issues.

According to CRFB’s new report, released on Oct. 21, 2024, Trump campaign pledges would weaken Social Security’s financial stability by ending taxation of Social Security benefits. This would eliminate a revenue stream currently used to help finance Social Security. If enacted, the analysis notes that Trump’s plans would increase Social Security’s ten-year cash shortfall by $2.3 trillion through FY 2035. Additionally, ending all taxes on overtime pay and tips, would also reduce the payroll taxes accruing to the Social Security trust funds.

CRFB’s analysis also predicted that Trump’s policies would worsen Social Security’s finances by increasing Social Security’s annual shortfall by roughly 50 percentin FY 2035, from 3.6 to 4 percent of payroll.

Trump’s calls for large tariffs on imports, which would either increase cost-of-living adjustments (COLAs) through higher inflation or reduce taxable payroll would impact the financial viability of the Social Security program. Enhancing boarder security and deporting unauthorized immigrants would reduce the number of immigrant workers paying into the Social Security Trust funds.

CRFB also questions whether Trump’s fixes would reduce Social Security’s long-term shortfalls.

From the Sideline…

According to Aimee Picchi is associate managing editor for CBS MoneyWatch, the personal finance website received a statement from Trump spokeswoman Karoline Leavitt disputing the CRFB analysis: “The so-called experts at CRFB have been consistently wrong throughout the years. President Trump delivered on his promise to protect Social Security in his first term, and President Trump will continue to strongly protect Social Security in his second term,” she said.

Additionally, Leavitt told CBS Money Watch that Trump’s plans for “unleashing American energy, slashing job-killing regulations, and adopting pro-growth America First tax and trade policies” would put Social Security “on a stronger footing for generations to come.”

“President Trump has said he would close Social Security’s long-term shortfall by increasing drilling for oil and natural gas and by growing the economy. However, we’ve shown that increased energy exploration is unlikely to have a meaningful effect on Social Security – even if the gains were deposited into the trust fund. We’ve also shown that it would require unrealistically fast economic growth to close Social Security’s existing long-term funding gap,” says CRFB’s analysis. .

“Faster growth can reduce Social Security’s shortfall [says Trump]. But based on available analyses and understanding the effects of President Trump’s agenda on the national debt, it is unlikely his plans would significantly boost the size of the economy, and many estimates find his plans would reduce long-term out-put long-term output,” adds CRFB.

Responding to CRFB’s analysis, in a statement Harris-Walz 2024 spokesperson Joseph Costello said: “Vice President Harris is committed to protecting Social Security benefits and is the only candidate who will actually fight for seniors, not just pay them lip service on the campaign trail.

Expand Social Security Caucus House Co-Chairs Reps. John B. Larso (D -CT), Raúl Grijalva (D-AZ), and Debbie Dingell (D – MI) )call Trump’s campaign pledges “a no starter.” If implemented, they would eliminate revenue streams used to help finance Social Security and accelerate the depletion of Social Security funding,” they say.

“Maintaining the solvency of Social Security is vital for promoting economic security, and a moral obligation to honor the commitments made to those who have contributed to the system throughout their working lives. To safeguard the future of Social Security, we cannot allow for Trump’s policies to gut these hard-earned benefits and instead must engage in a simple reform like the Social Security 2100 Act that fixes insolvency by having the wealthy pay into the system the same as everyone else,” note the Co-Chairs.

And Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare, gives his thought’s to Trump’s campaign pledges: “We oppose his proposal to eliminate the taxes on benefits that help to fund the system, and any other measure that would deprive Social Security of much needed revenue,” he says.

“Once again, Trump postures as a friend of the working class, then puts forward plans that endanger the benefits working people have earned — and depend on in retirement. It is irresponsible for a presidential candidate to advocate plans that would hasten the depletion of the Social Security trust fund reserves, triggering an even larger automatic benefit cut if that happens,” adds Richtman.

According to Richtman, Trump’s plans reveal his “overall recklessness” with Social Security. “He suspended the payroll tax that funds the program during Covid — and hoped it would be eliminated. His White House budgets would have slashed Social Security Disability Insurance (SSDI) by billions of dollars. He said earlier this year that he was ‘open’ to ‘cutting entitlements,’ then tried to walk it back. He once called Social Security a ‘Ponzi Scheme,” he adds.

“Time and again, Trump has chosen political expediency without considering – or caring about – the consequences. Despite his posturing, Donald Trump is no friend to Social Security or American seniors,” charges Richtman.

Looking Back on Efforts to Fix Social Security

“The history and reasoning in both Congress and the White House on protecting Social Security is still important and persuasive– as it was to President Obama, and House and Senate leaders Pelosi and Reid,” says Robert Weiner, former chief of Staff of the House Aging Committee and later a White House senior staffer

“The great Claude Pepper helped forge the Reagan-O’Neill-Pepper deal of 1983 that stopped cuts and even partial insolvency through 2034,” says Weiner, noting that he remembers Pepper saying “over my dead body” to cabinet officers and congressional leaders who wanted to impose severe cuts.

Weiner noted that Nancy Pelosi said “First, do no harm” to the would-be cutters right through all the years of her Speakership and leadership. “’We did that’ to stopping the Social Security cutters, she told Weiner.

Senate Leader Harry Reid’s staff removed the term ‘reform’ from his Social Security talking points when they were given the documents and realized that the program has a surplus, not a deficit,” noted Weiner. “These great leaders knew that Social Security ‘reform’ meant cuts, breaking Social Security’s promise to American seniors, and that the deficit was a myth and excuse to take from the program and its two-trillion-plus dollar surplus,” he said.

“And House Majority Leader Steny Hoyer told me that congressional leaders knew that, if necessary, if the time comes, and it’s not now, a slight tweak by Congress to raise the income level for tax payments could fix it, if necessary, if the growing economy hadn’t already maintained full solvency,” says Weiner.

“Let’s hope this kind of sanity and sensitivity continues to prevail,” Weiner concludes.

https://www.crfb.org/blogs/what-would-trump-campaign-plans-mean-social-security

Trump’s Budget Proposal Comes ‘Dead on Arrival’ to Aging Groups

Published in Woonsocket Call on February 18, 2018

Last Monday, President Donald Trump released his 2019 budget proposal, “An American Budget,” providing guidance to Congress on how to spend hundreds of billions of dollars in new federal spending plan authorized by the Bipartisan Budget Act recently passed into law. Trump’s federal spending wish list clearly shows that many programs and services for older Americans will take a huge hit if any of these proposals are picked up by the Republican-controlled Congress.

The Washington, DC-based National Committee to Preserve Social Security and Medicare (NCPSSM) expresses concern that Trump’s budget proposal contains many of the same harmful proposals that the Administration and Republican-controlled Congress has pushed before, including $1.4 trillion in Medicaid cuts, $490 billion in Medicare cuts, and repeal of the Affordable Care Act.

Social Security on the Chopping Block

According to the NCPSSM’s analysis released this month, the President’s budget blue print calls for deep cuts to Social Security Disability Insurance, breaking his campaign promise not to touch Social Security.

Trump proposes to slash up to $64 billion from Social Security Disability Insurance (SSDI) benefits through eight demonstrations “ostensibly” geared toward helping disability beneficiaries to stay at work or return to work, says NCPSSM, noting that these Social Security Administration’s (SSA) demonstration projects, established in 1980, had only “a modest effect on beneficiaries’ workforce participation.”

NCPSSM’s analysis warns that the President’s proposed budget also calls for other benefit cuts for disabled seniors, including limiting the retroactivity of applications for disability benefits from 12 months to six months. It would also deny unemployment compensation payments to SSDI beneficiaries who work but get laid off. Social Security Income recipients that live together, even with families, would see their benefits reduced, too.

The Trump Administration also proposes $12.393 billion for SSA’s FY 2019 appropriation for administrative funding, says NCPSSM, warning that this $89 million funding cut will result in longer waits for decisions on initial disability claims and time to speak to a representative from SSA’s 800 number. “With 10,000 baby boomers reaching age 65 every day, SSA needs substantial yearly increases just to keep pace with increased workloads, says NCPSSM.

President Trump’s budget plan only funds production and mailing of only 15 million Social Security statements. “This proposal is part of SSA’s overall plan to limit sending statements only to individuals who are 60 or older rather than sending them to all workers every five years,” says the aging advocacy group, urging the Administration “to send these important financial planning documents to all workers, as is required in section 1143 of the Social Security Act.”

Medicare Takes a Blow

President Trump’s draconian budget calls for over $500 billion in cuts to Medicare, many of these savings coming from cuts to Medicare providers and suppliers. This is another campaign promise broken.

NCCPSSM warns that President Trump’s 2019 budget proposal also includes policy changes to the prescription drug benefit that would impact Medicare’s spending and beneficiary costs. It would create an out-of-pocket maximum for Part D. Medicare t beneficiaries with very high drug costs would no longer have cost sharing responsibility once they hit the catastrophic threshold. This would add $7.4 billion in costs over 10 years.

Trump’s budget proposal would also change the way the threshold for moving out of the coverage gap or “donut hole”” is calculated that would make it more costly to seniors to move through it. “Taken together with an out-of-pocket cap, it will mean savings for some seniors with very high drug costs, but costs will climb for a larger number of seniors. This saves $47.0 billion over 10 years,” reports NCPSSM.

Finally, Trump’s 2019 budget proposal saves $210 million over 10 years by eliminating the cost-sharing on generic drugs for low-income beneficiaries.

Hurting Medicaid Recipients

In FY 2015, federal and state governments spent about $158 billion or 30 percent of Medicaid spending on long-term services and supports (LTSS). The federal and state partnership pays for about half of all LTSS for older adults and people with disabilities.

The President’s 2019 budget proposal slashes the program’s funding by changing the structure of the program into either a per capita cap or Medicaid block grant, with a goal of giving states more flexibility of managing their programs. Through 2028, the president’s budget would cut $1.4 trillion from the Medicaid program through repealing the Affordable Care Act, restructuring the program.

NCPSSM expresses concern that if states lose money under per capita caps or block grants, state law makers would have to make up the funding themselves if federal funds do not keep up with their Medicaid population’s needs. This can happen by either by cutting benefits and/or limiting eligibility, requiring family members to pick up more nursing home costs, or scaling back nursing home regulations that ensure quality, service and safety protections.

And That’s Not All

NCPSSM’s analysis says that Trump’s budget proposal also calls for the elimination of the Older Americans Act Title V Senior Community Service Employment Program (SCSEP). The program, funded $ 400 million in FY 2017. provides job training to nearly 70,000 low-income older adults each year.

Community Services Block Grants ($715 million), the Community Development Block Grant ($3 billion) and the Social Services Block Grant ($1.7 billion) programs are also targeted to be eliminated. Some Meals on Wheels programs rely on funding from these federal programs, in addition to OAA funding, to deliver nutritious meals to at-risk seniors.

Trump’s 2019 Budget proposal would also eliminate funding for the Low-Income Home Energy Assistance Program (LIHEAP) This program received $3.39 billion in FY 2017. “Of the 6.8 million households that receive assistance with heating and cooling costs through LIHEAP each year, 2.26 million or one-third are age 60 or older,” says NCPSSM.

Trump’s budget plan also eliminates funding for Senior Corps programs including the Retired and Senior Volunteer Program, Foster Grandparents and Senior Companions. Current Senior Corps funding at the FY 2017 level is $202.1 million. “These programs enable seniors to remain active and engaged in their communities, serving neighbors across the lifespan, and benefitting their own health in the process. In 2016, 245,000 Senior Corps volunteers provided 74.6 million hours of service,” says NCPSSM. .

Finally, research into cancer, Alzheimer’s Parkinson’s and other diseases affecting older persons will be negatively impacted with $ 46 million in funding cuts to National Institute on Aging at the National Institutes of Health.

Aging advocacy groups view Trump’s second budget “flawed,” jam-packed with “damaging policies” for Congress to enact with an aging population. It’s “Dead on Arrival.” If Trump and GOP lawmakers choose not to listen to their older constituents, the results of the upcoming mid-term elections might just get their attention.

Social Security, Medicare Are Solvent…at least for Now

Published in Woonsocket Call on July 16, 2017

Just days ago, a released annual federal report, the 2017 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, says the nation’s Social Security and Medicare programs continue to work, are fiscally solvent, but future fixes will be needed to maintain their long-term actuarial balance.

The Social Security Administration’s (SSA) annual snap shot of the fiscal health of Social Security and Medicare, two of the nation’s largest entitlement programs, released on July 13, is important to millions of beneficiaries. According to the federal agency, in 2017 over 62 million Americans (retired, disabled and survivors) received income from programs administered by SSA, receiving approximately $955 billion in Social Security benefits.

The Good News

The trustee’s report projects that Social Security will be financially solvent until 2034 (unchanged from last year), after which SSA can pay 77 percent of benefits if there are no changes in the program. The 269-page report also noted that the Medicare Trust Fund for hospital care has sufficient funds to cover its obligations until 2029, one year longer than projected last year, then 88 percent afterward if nothing is done to strengthen the system’s finances

The trustees report says that there is now $2.847 trillion in the Social Security Trust Fund, which is $35.2 billion more than last year — and that it will continue to grow by payroll contributions and interest on the Trust Fund’s assets.

Social Security Administration efficiently manages its entitlement program, says the trustee report. The cost of $6.2 billion to administer to program in 2016 was a very low 0.7 percent of the total agency’s expenditures.

The trustee’s project a 2.2 percent cost-of-living adjustment (COLA) for Social Security beneficiaries in 2018, the largest increase in years. In addition, Medicare Part B premiums will also remain unchanged next year. Most beneficiaries pay a monthly premium of $134 (this amount increases for those with higher incomes.)

Social Security is “Stable and Healthy for Now”

According to the National Committee to Preserve Social Security (NCPSSM), the recently released trustee’s report confirms that the federal entitlement program is “stable and healthy for now,” while acknowledging there will be future challenges if “corrective action is not taken.”

“Forty percent of seniors (and 90 percent unmarried seniors) rely on Social Security for all or most of their income. The average monthly retirement benefit of $1,355 is barely enough to meet basic needs, and the Trustees’ latest projected cost-of-living increase of 2.2 percent will not keep pace with seniors’ true expenses. Under these circumstances, any benefit cuts (including raising the retirement age to 70 as some propose) would be truly painful for our nation’s retirees,” says Max Richtman, NCPSSM’s president and CEO, in a statement responding to the release of the federal report.

“Opponents of Social Security may once again try to use this report as an excuse to cut benefits, including raising the retirement age,” warns Max Richtman. “We must, instead, look to modest and manageable solutions that will keep Social Security solvent well into the future without punishing seniors and disabled Americans,” he says.

Depending on what the final Senate health bill looks like, the legislation could reduce the solvency of Medicare by two years, say Richtman. “The National Committee opposes the GOP health plan and rejects efforts to privatize Medicare. We advocate innovation and continuing efficiencies in the delivery of care, allowing Medicare to negotiate prescription drug prices, and restoring rebates the pharmaceutical companies used to pay the federal government for drugs prescribed to “dual-eligibles” (those who qualify for both Medicare and Medicaid) – in order to keep Medicare in sound financial health,” he says.

Safeguarding and Expanding Social Security Benefits

In a statement, Richard Fiesta, Executive Director of the Washington, DC-based Alliance of Retired Americans, notes that the Trustees project that the Social Security Disability Insurance (SSDI) trust will be fully solvent until 2028, five years longer than last year’s report. “In light of this data, it makes no sense that the President’s FY 2018 budget seeks to cut Social Security Disability Insurance funding by $63 billion,” he says.

Despite the trustees’ strong report, Fiesta believes that improvements can be made that would benefit all workers and retirees. His organization supports safeguarding and expanding Social Security benefits, providing a more accurate formula for cost-of-living adjustments, and lifting the cap on earnings for the wealthiest Americans.

Fiesta adds, “reining in the prices of prescription drugs would strengthen Medicare for the future and reduce costs to retirees.”

AARP CEO Jo Ann Jenkins, in a statement, calls for bipartisan action in Congress and the Trump administration to ensure the strong fiscal health of Social Security and Medicare programs. “Social Security should remain separate from the budget. Medicare can improve if we reduce the overall cost of health care, rather than impose an age tax, and if we lower prescription costs, instead of giving tax breaks to drug and insurance companies,” she says.

Finally, in a statement, Nancy Altman, President of Social Security Works, also chairing the Strengthen Social Security Coalition, says that this year’s trustee’s report clearly indicates that the nation can fully afford an expanded Social Security. Altman says that polling continues to show that Americans support expanding the program’s benefits.

Altman believes the Social Security program can solve the nation’s “looming retirement income crisis, the increasing economic squeeze on middle-class families, and the perilous and growing income and wealth inequality.” So, when confronting these challenges, she says, “the question is not how can we afford to expand Social Security, but, rather, how can we afford not to expand it.”

Ensuring the Long-Term Solvency of Social Security

Those nearing retirement or retired will be assured existing Social Security benefits, promises the 2016 Republican Party Platform. “Of the many reforms being proposed, all options should be considered to preserve Social Security. As Republicans, we oppose tax increases and believe in the power of markets to create wealth and to help secure the future of our Social Security system,” says the Platform. Simply put, the GOP opposes the raising of payroll taxes on higher income taxpayers to stabilize or expand Social security and supports privatization, allowing Wall Street to control your Social Security benefits.

On the other hand, last year’s Democratic Party Platform opposed Social Security cuts, privatization or the weakening of the retirement program, along with GOP attempts to raise the retirement age, slash benefits by cutting cost-of-living adjustments, or reducing earned benefits. The Democratic Platform called for taxing people making above $250,000 will bring additional funding into the entitlement program.

Congressional gridlock has not blocked legislation from being introduced to fix the nation’s Social Security program. According to Social Security Works, over 20 Social Security expansion bills have been introduced in the House and Senate since 2015. Recently, the Social Security 2100 Act, introduced by Rep. John Larson (D-CT), has 162 House cosponsors —around 85 percent of all Democratic representatives. Similarly, around 90 percent of Senate Democrats are on record in favor of expanding, not cutting Social Security.

Many consider Social Security to be the “third rail of a nations politics.” Wikipedia notes 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.” With the Social Security and Medicare programs now on firm financial footing, it is now time for Congress to seriously consider legislative actions to ensure the longevity and expansion of these programs. When the dust settles after the upcoming November 2018 elections, we’ll see if Social Security is truly “a third rail.”