Trump Vows To Make Payroll Tax Cuts Permanent AND Protect Social Security

Trump Vows To Make Payroll Tax Cuts Permanent AND Protect Social Security


Perhaps the #1 issue I hear about from people is "Will Trump protect my social security?"

Or:  "I heard Trump is going to destroy social security, is that true?"

Listen to me very clearly:  Trump has promised social security will be 100% protected under his watch.

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Fox Business explained more:

President Trump on Wednesday touted his plan to implement a payroll tax deferral, a levy he plans to eliminate entirely if re-elected, but promises Social Security will not be negatively affected.

“At the end of the year, on the assumption that I win, I’m going to terminate the payroll tax,” Trump said during a press briefing at the White House. “We’ll be paying into Social Security through the general fund.”

Trump has proposed implementing payroll tax deferrals from Sept.1 through Dec. 31 for employees whose bi-weekly wages are less than $4,000, on a pre-tax basis.

On Wednesday he said he will forgive all of these taxes next year, which means the measure would in fact be the equivalent of a payroll tax cut. After that he said he will terminate the tax entirely.

The payroll tax is paid separately from federal income taxes and funds Social Security and Medicare. Employers and employees each pay 6.2 percent for Social Security and 1.45 percent for Medicare, and an additional 0.9 percent is levied on the highest earners.

Without those taxes, Trump said funding for the popular programs will be taken from general government revenues.

When questioned on that strategy given the massive deficits currently facing the federal government, the president responded that it will be doable because the U.S. economy is “going to have tremendous growth.”

Trump defended his economic record on Wednesday, stating the U.S. has seen one of the “shallowest contractions” of any country throughout the global pandemic.

He also touted automobile demand, homebuilder sentiment and manufacturing activity as positive indicators of the recovery.

“It’s coming back at a level that’s far greater than anybody anticipated,” Trump said.

He has repeatedly predicted that 2021 may be a record year for the economy.

According to Trump, economists have said that a payroll tax cut is better than many other types of stimulus for American families.

And here's more from Fox Business and Steve Mnuchin saying social security is 100% safe:

President Trump’s payroll tax deferral plan will not damage the Social Security trust fund, Treasury Secretary Steven Mnuchin said, even though it will give businesses and employees a break from paying taxes that fund the popular program.

“We’re going to create a level of certainty for employers that want to participate – we can’t force people to participate but I think many small businesses will do this and pass on the benefits,” Mnuchin told FOX Business on Wednesday. “[Trump will] go back to Congress when he wins the election and ask Congress to have this money forgiven and have the Social Security trust fund fully topped up so that in no way does this impact Social Security.”

Trump has proposed implementing deferrals beginning on Sept.1 through Dec. 31 for employees whose biweekly wages are less than $4,000, on a pre-tax basis.

The payroll tax is paid separately from federal income taxes and funds Social Security and Medicare. Employers and employees each pay 6.2 percent for Social Security and 1.45 percent for Medicare, and an additional 0.9 percent is levied on the highest earners.

It is unclear what Mnuchin means when he said Congress would keep the trust fund “topped up,” but experts have warned that reserves could be depleted earlier than expected as a result of the financial effects of the pandemic.

An analysis conducted by researchers at the Penn Wharton Budget Model showed that Social Security is at risk of running out of funds as many as four years earlier than anticipated – in 2032 – depending on the shape of the U.S. economic recovery. Prior to the pandemic, the group had a 2036 estimate for the OASDI trust fund.

A separate analysis estimated that Social Security’s funding may run dry as soon as 2029.

A decline in payroll taxes is expected to be primarily responsible for draining Social Security’s coffers more quickly, given the dramatic rise in unemployment numbers. Unemployment compensation is not subject to payroll taxes. Deferring, and forgiving, payroll taxes may accelerate the timeline.

Low interest rates also affect reserves, as they reduce income on bonds held by the fund.

Even Bloomberg says Social Security is safe:

One of the Democrats’ favorite moments in any election cycle is when Republicans give them an opportunity to pretend that a serious plot to slash Social Security and Medicare is underway. In 2017, some remarks by Republican legislators were used to suggest that the programs for the elderly were about to be targeted.

This time it’s President Trump who handed Democrats the ammunition. He was in Davos for an economic conference when Joe Kernan of CNBC asked him, “Entitlements ever be on your plate?” His answer: “At some point they will be.” In his next few sentences, he seemed to be saying that a high rate of economic growth would make it easier to change the entitlement programs (which are called that because current law entitles large numbers of Americans to benefits under them).

Senator Chuck Schumer, the Democratic leader, responded, “Americans should hear that the president is casually talking about cutting their Social Security at a Swiss ski resort with the global financial elite.” A Democratic SuperPAC promised that more ads will hit Trump over his desire to cut Medicare and Social Security than over impeachment. Trump beat a fighting retreat, tweeting that Democrats would destroy Social Security while he would save it.

Trump’s statement in Davos is fair game: He said what he said. But that doesn’t mean that major changes to programs for the elderly in a second Trump term is a real prospect. The administration has no plans to move on this front, and would not come close to succeeding if it did.

During the 2016 campaign, Trump said, “I’m not going to cut Social Security like every other Republican and I’m not going to cut Medicare or Medicaid.” Democrats say he has already broken that pledge. Even during the campaign, he also said that he wanted to convert Medicaid into block grants to state governments — or, at least, his website did. When he took office and the Republican Congress tried to repeal Obamacare, he backed proposals that would have made major changes to Medicaid and reduced projected spending on it. His administration has proposed reining in Social Security’s disability program.

Democrats portrayed the administration’s budget proposal last year as an $845 billion cut to Medicare. That was an exaggeration. The proposal would, among other things, have shifted some parts of Medicare into other parts of the federal budget. It would also have undertaken various reforms — some of them supported by the Obama administration — to reduce spending without reducing benefit levels or increasing out-of-pocket costs for senior citizens.

Trump has from time to time hinted that he would be willing to go further. In addition to the Davos interview, he has mentioned this possibility to at least two Republican members of Congress who have spoken to me.

But this president says a lot of things from moment to moment, and not all of them amount to actual intentions. The idea that President Trump will get re-elected promising to protect Social Security and Medicare and then make big cuts to them is, to use a technical term, nuts.

Even if he is re-elected, he will almost certainly have to contend with a House controlled by Democrats. They would not cooperate with him on such cuts, and would in fact oppose them as a way of maximizing their gains in the 2022 elections. Senate Democrats would also almost certainly keep enough seats to retain the power to filibuster; they might even win a majority. And since presidents usually lose ground in midterm elections, we can’t expect Trump’s legislative influence to increase thereafter.

For their part, congressional Republicans show very little appetite for a battle over entitlements. They don’t want to relive their defeat in the legislative fight over Obamacare repeal. Their voters seem unconcerned about high deficits as long as a Republican is in the White House. They themselves feel no urgency to bring deficits down with interest rates as low as they are. And it would be especially difficult to spur them to action after a campaign in which the president was silent, or defensive, on the issue.

Changes to Medicare and Social Security would be less likely to happen under a re-elected Trump than under a newly elected Joe Biden, Michael Bloomberg, Pete Buttigieg, or Amy Klobuchar — and even under one of them, such legislation would be a longshot. (Bloomberg is founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)

Ok, did we get that covered now?

No more concerns?

Ok, now on with the second part of the story.

Do you want to take home a LOT more in your paycheck each week?

Then we're gonna need to put Trump back in office so he can make the payroll tax cuts permanent.  

Take a look:

When we win I, as your President, will totally forgive ALL deferred payroll taxes with money from the General Fund. I...

Posted by Donald J. Trump on Thursday, September 10, 2020

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