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

Delegates Reject Bush’s Policies

Published in Senior Digest on January 2006

President George Bush and congressional Republican leaders supporting Social Security reform through private savings accounts, saw their policy soundly rejected at the White House Conference on Aging (WHCoA) held last month in Washington, D.C.

According to AARP State Director Kathleen Connell, who was appointed to the Rhode Island WHCoA delegation by U.S. Sen. Jack Reed, Bush’s private sector approach to Social Security reform got a big thumbs down.

The president also took a hit on his new Medicare prescription drug benefit program, which offers insurance coverage through the private sector. Delegates voted for a strategy that calls for replacing the new Medicare drug benefit with a government-run program.

By the end of the fifth WHCoA, 50 resolutions dealing with a variety of policy issues were approved by the 1,200 delegates. Most of the top 10 resolutions concern the need to create a comprehensive national strategy to address the long-term care of the nation’s frailest and most vulnerable seniors.

While the delegates took a couple of swings at Bush, the president made an obvious political snub when he failed to appear at the four-day conference and sent Health and Human Services Secretary Michael O. Leavitt, as a replacement. That goes in the record books as the first time a president was no-show at the national aging conference, held every decade since 1962. Presidents John Kennedy, Richard Nixon, Ronald Reagan and Bill Clinton did make a showing to welcome the delegates.

Moya Thompson, WHCoA deputy director for outreach, stated the conference’s Policy Committee had initially approved 73 resolutions, sharing them with the 1,200 delegates before they arrived in Washington. Thompson said that three voting sessions were scheduled at the beginning of the WHCoA, with each delegate having an opportunity to vote once to choose their top 50 resolutions. The 50 resolutions that received the most votes were presented at the conference.

According to Thompson, 56 implementation strategy workshops, at least one for each of the 50 resolutions, were held. By law, the resolutions must be delivered to the president and Congress six months after conference, Thompson said.

Counnell said many of the delegates felt that the WHCoA agenda was controlled too much by the Policy Committee appointed by the Bush administration and the Republican-controlled Congress. “This was very visible to those attending,” she said.

Another organizational issue, Connell said, was concern over the Policy Committee not allowing delegates to submit resolutions for a vote in addition to the selected 73. At previous conferences, she said, additional resolutions could be considered if petitioned by 10 percent of the delegates.

Connell said that the Rhode Island delegates were a very cohesive group. “Everybody was on the same page in advocating for issues. Given the size of our delegation, we were very effective,” she said.

Corinne Calise Russo, director of the state Department of Elderly Affairs, said she was pleased that the top vote-getting resolution was the reauthorization of the Older Americans Act, a priority of the Rhode Island delegation.

Russo, appointed by Gov. Donald Carcieri as a delegate, said, “Delegates throughout the nation attending the conference felt that the Older Americans Act should be enacted with increased funding for all of the act’s titles, within the first six months following the end of the conference.”

Ensuring older Americans have transportation options to maintain their mobility and independence was another resolution that received strong support, Russo said, stressing the importance of keeping seniors independent and driving for as long as possible. She believes the resolution can be implemented at the state level by using new signage on highways, making lane markings extremely visible in rain and at night and designing larger and more visible crossing signs at busy intersections.

While older worker issues and affordable housing designed to allow seniors to age in place are in the top 50 resolutions, and are high on Russo’s agenda, she stressed federal and state policy makers must not forget the growing numb er of grandparents who are raising their grandchildren.

“We need to expand our national family caregiver programs funded by the Older Americans Act, to provide more support for older persons taking on this new role,” she said.

Bush will fight to Privatize Social Security

Published in Senior Digest on January 2005

The Bush administration and aging groups are about to battle over the privatization of Social Security.

More than four years ago, the 16-member Presidential Commission divided evenly between Republicans and Democrats, voted unanimously to send its 165-page final report to the Bush White House. The charge of the commission was to develop a road map to reform the nation’s Social Security program.

With the commission kicking off the Social Security reform debate by releasing this report in December 2001, the federal panel called for three approaches to change the 70-year-old federal program. All the recommendations involved personal accounts, with a premise that workers’ investments would yield higher retirement benefits.

With President Bush keeping control of the White House and the GOP retaining control of Congress, Social Security is again under attack and the debate is expected to heat up.

According to recent Business Week On-Line article by Richard S. Dunham, Bush will begin to sell the partial privatization of Social Security by launching a “marketing blitz.”

“Advisors say the president, who sees private accounts as essential to his ownership society agenda, is determined to make retirement reform his top domestic priority for 2005,” Dunham wrote.

According to Dunham, Bush’s “three-phase sales plan” started with his Dec. 12 radio address Bush followed by calling for privatization of Social Security at his economic summit on Dec. 16.

Phase Two, a $ 40 million broadcast advertising campaign underwritten by nation’s corporations will tout the economic benefits of allowing workers to put a portion of their payroll taxes into investment accounts and the negative impact of inaction. Dunham wrote Phase Three would give the public the specifics.

A Wall Street Journal/NBC News poll found that Bush had his work cut out for him to sell the public. Results showed people are skeptical about any changes to Social Security, and that the public believes it is a bad idea to let workers risk their Social Security taxes in the stock market.

Critics are quick to pounce on Bush for his calls for radical changes to Social Security. They charge that the securities industry which heavily supported Republican candidates in the last election, would benefit financially under the president’s plan.

“Wall Street and big business are seated at the conference table-where are the voices of seniors?” asked Barbara Kennelly, president and chief executive officer of the National Committee to Preserve Social Security and Medicare.

“This seems like a repeal of the president’s Social Security Commission, where privatization wasn’t debated. It was a foregone conclusion – and that is a sure path to bad public policy,” she said in a prepared statement released after the White Houe Economic Conference.

Furthermore, Kennelly said that “a carefully orchestrated conference can’t hide the fact that privatizing Social Security may result in cuts in benefits and will dismantle Social Security, while dramatically increasing our nation’s debt.”

Just blocks away at the National Press Club, a diverse coalition of groups held a press conference on the day of Bush’s economic summit. The assembled groups, including the AFL-CIO, NAACP, National Organization for Women (NOW), disability groups, and the Alliance for Retired Americans, announced their strong opposition to Bush plan.

Those groups are part of the Campaign for America’s Future, which intends to mobilize opposition in every congressional district throughout the nation to Save Social Security benefits that would be slashed by the president’s plan.

At the news conference, George J. Kourpias, president of the 3 million plus member Alliance for Retired Americans,” told the crowd that the Social Security system is not broke or in the dire trouble Bush would have American’s believe.

“Let me remind those naysayers who conspired not to save Social Security but to bury it, that Social Security hasn’t missed a paycheck in almost 70 years, Kourpias said.

“With some changes designed to strengthen and secure the program, Social Security is well positioned to keep delivering monthly checks to millions of Americans for decades to come.”

Adds, NOW President Kim Gandy, “Social Security is not in trouble. George Bush is in trouble. More than half of elderly women would live in poverty without the benefits of this guaranteed insurance program. This destructive proposal is effectively economic violence against women- he’s risking our livelihoods to satisfy Wall Street donors and corporate cronies.

AARP President Marie Smith is also weighing in on the privatization issue by placing an open letter to 33 million plus members, on the nonprofit group’s Web site

Smith counters Bush’s statements that Social Security is in danger of going broke. Changes do not have to be drastic, she says. “Creating private accounts would only weaken Social Security and put benefits at risk for future generations.”

Smith estates that a new Social Security system would cost the nation as much as $2 trillion or more in benefit cuts new taxes or more debt.

In Rhode Island, a quick poll of the state’s Democratic U.S. senators and congressmen indicate that they oppose Bush’s retirement policy gamble. (Republican U.S. Senator Lincoln Chafee’s position could not be obtained). While each oppose the concept of privatization, the lawmakers are waiting to see the specific legislative proposals that will be introduced.

But even with Bush pushing for a major Social Security overhaul, only a bipartisan coalition of congressional lawmakers can either strengthen the existing Social Security program or scrap it through privatization.

It is crucial for seniors to send a message to Bush and the Republican congressional leadership that it’s time to go back to the drawing board to examine other approaches to strengthen America’s most popular domestic program.