Trump’s Most Dramatic Attempt To Undermine Social Security

      From the Washington Post:

Another document signed by Trump on Saturday attempts to defer payroll tax payments from September through December for people who earn less than $100,000. The impact of this measure could depend on whether companies decide to comply, as they could be responsible for withdrawing large amounts of money from their employees’ paychecks in a few months when the taxes are due.

     Are we in a situation now where Republicans, no longer content with trying to undermine Social Security in subtle ways, decide to really own the libs by completely destroying the program’s finances? If Trump gains re-election does he dispense with ordinary American governance and rule by fiat?

Get Over It, GOP!

     From Michael Hiltzik writing for the Los Angeles Times:

Social Security advocates who breathed a sigh of relief when Senate Republicans rejected President Trump’s demand to place a payroll cut in the latest coronavirus relief bill exhaled too soon.

The version unveiled Monday by Senate Majority Leader Mitch McConnell (R-Ky.) incorporates a provision even more menacing for Social Security (and Medicare too).

This is the so-called TRUST Act, which was crafted by Sen. Mitt Romney (R-Utah) and has been bubbling along in Capitol Hill corridors since last year. ...

The TRUST Act — the acronym stands portentously for “Time to Rescue United States’ Trusts” — would work by ginning up a sense of near-term emergency about the finances of Social Security, Medicare and the federal highway trust fund. ...

Congress would then appoint bipartisan committees mandated to “draft legislation that restores solvency and otherwise improves each trust fund program,” as Romney has described the process. Whatever proposals these panels produced would be fast-tracked in Congress and not subject to amendment. (The bills would need 60 votes in the Senate.)

On the surface, this seems almost innocuous — so much so that the act has attracted co-sponsorships from a handful of inattentive and somewhat conservative Democrats, including Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona. They should pay better attention. ...

Since the TRUST panels’ deliberations will be offered to Congress on a take-it-or-leave-it basis, the process rather serves what the GOP refers to as the need to gut Social Security “behind closed doors,” to quote an unwittingly revealing line uttered last year by Sen. Joni Ernst (R-Iowa). ...

     I'm confident this isn't happening in this stimulus bill but it shows the implacable hostility that Congressional Republicans have for Social Security. This won't happen because mainstream Congressional Democrats are even more devoted to maintaining Social Security. I understand that Manchin is in a red state and Sinema is in a purple state but that doesn't explain why they would support this. They're certainly isolated within their party. Even if you could force a vote on a bill to cut Social Security in any significant way, it wouldn't get a majority vote even from Republicans. It's hopeless. Americans love Social Security. Get over it, GOP!

Why Eliminating The Cap On Earnings Taxed By FICA Is A Great Idea In One Chart

Effect of eliminating  cap on wages subject to FICA. From Office of Chief Actuary, SSA

Putting It In Context

From Dean Baker, Co-Director of the Center for Economic and Policy Research, writing at the Huffington Post:

There was both good news and bad news in the Social Security trustees' report released last week. The bad news is that the program is projected to cost somewhat more in the latest report than in the 2010 report. ...

This bad news about the program is also the good news. The main reason that the program's finances deteriorated between the 2010 report and the 2011 report is that in the 2011 report the trustees assumed that we would enjoy substantially longer life expectancies than they did in the 2010 report.

They increased their projected life expectancy for men turning age 65 in 2010 from 18.1 years to 18.6 years, a gain of 0.5 years. The trustees increased their projected life expectancy for women turning age 65 by 0.3 years. ...

Even accepting the 2011 report at face value the picture is hardly as dire as many politicians in Washington are claiming. We have seen much worse before. For example in 1997, the trustees projected a shortfall that was equal to 2.23 percent of payroll. At that time, their projections showed the trust fund first being depleted in 2029. ...

It is also important to keep the Social Security numbers in context. Proponents of cuts to Social Security have spent fortunes on pollsters and focus groups trying to put the program's finances in the most dire possible light. They are fond of reporting things like the program's $17.9 trillion shortfall over the infinite horizon. ...

The vast majority of this $17.9 trillion shortfall comes in years after 2200. Social Security does have a long planning period, but if anyone thinks that we are actually making policy for the 24th century then we should keep this person far removed from the levers of power. ...

The best way to make the size of the projected Social Security shortfall understandable is to put it in context. Relative to the size of the economy, the projected Social Security shortfall is equal to 0.7 percent of GDP. By comparison, annual spending on the military increased by more than 1.6 percentage points of GDP between 2000 and 2011. So the burden imposed by the wars in Iraq and Afghanistan are almost 2.5 times larger than the money that would be needed to eliminate the Social Security shortfall. ...

To take another point of reference, the Congressional Budget Office's analysis of the Ryan Medicare privatization plan implied that it would increase the cost of buying Medicare-equivalent policies by more than $34 trillion, a sum that is almost five times as large as the projected Social Security shortfall.