Opposition Builds Against Elimination of Social Security’s Payroll Tax

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.

Can Trump Politically Survive Cutting Social Security’s Payroll Tax?

Published in the Pawtucket Times on May 11, 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,” Trump bluntly warns 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, entitled “America Together: Returning to Work,” aired on May 3, that focused on COVID-19 and the reopening of the nation’s economy.

Aging advocates and Democratic lawmakers charge that 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.

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 Trump’s efforts to remove the payroll tax by a provision in the next COVID-19 stimulus package will ensure the fiscal insolvency of Social Security, threatening the program’s ability to continue paying benefits to 64 million Americans who depend on those benefits to financially survive 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 Security, says NCPSSM’s president and CEO, Max Richtman in a statement.
.
“While we agree that providing tax relief to middle class Americans is an important consideration as we respond to 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.

In an April 24 correspondence to Trump, NCPSSM’s top official reminded the president 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 note.

Richtman also 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.
S
“The President’s campaign to eliminate payroll taxes is a violation of his patently false promises to seniors ‘not to touch’ Social Security. This proposal goes way beyond ‘touching.’ Choking off Social Security’s funding stream is an existential threat to seniors’ earned benefits,” charges Richtman.

Nancy Altman, president of Social Security Works, came out swinging when she heard Trump stating that he will block all coronavirus response measures unless they include cuts to the payroll tax, whose revenue is dedicated to Social Security.

In a statement, Altman stated: “More than 30 million Americans are newly unemployed due to the coronavirus pandemic. Their paychecks are gone, but their rent, utility, grocery bills and other expenses still must be paid. Seniors in nursing homes are dying at alarming rates. Hospitals are desperate, as are state and local governments.”

Dead on Arrival on Capitol Hill????

“Trump made it clear weeks ago that his obsession with cutting payroll contributions has nothing to do with the coronavirus or the resulting economic fallout,” says Altman, noting that he said he’d like a “permanent” reduction in payroll contributions, and that he’d support it “regardless” of the current situation. He has also said he wants to cut Social Security once he is re-elected, she added.

While Democratic lawmakers push for strengthening and expanding the Social Security Program, GOP lawmakers are signaling their opposition and aversion to risking political capital on supporting Trump’s efforts to cut the payroll tax. Trump’s calls for this tax policy change are falling on deaf ears. According to Politico, when asked if he supports Trump’s ultimatum that a payroll tax must be placed in the next stimulus package, Sen. Chuck Grassley (R-Iowa), the Senate Finance Committee chair, responded, “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, in the May 5 Politico article. “The president proposes, we dispose,” he quips.

Although Senate Majority Leader Mitch McConnel (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.

Stepping on the “Third Rail”

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.”

At an Iowa campaign rally in 2016, Republican presidential candidate Trump boasted that his loyal voter base would still standby him even if he shot someone in the middle of 5th Avenue in New York City. Many political pundits responded to his comment by rolling their eyes and chuckling.
Can Trump politically survive, keeping his loyal voter base, if he steps on the “third rail” by continuing his efforts to cut Social Security’s payroll taxes, pushing the 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.