Saturday, August 29, 2020

Another Trump scheme - wrecking Social Security and Disability

Another one of Trump's desperate pre-election moves on the economy was to try to "cut payroll taxes", in order to claim that Americans had more money in their paychecks. This seemed like a cheap stunt on the face of it, especially given that it was only for the 4 months between August and the end of 2020. But Trump did promise to try to get rid of it permanently if the country was stupid enough to re-elect him, which was immediately ripped as a way to cut Social Security by reducing the amount of money going in to the program.

But we didn't know how bad that would look until the Social Security Administration answered a request from Senate Democrats to outline what this move would do to the program's finances. And as reports noted, the damage would be almost immediate.
If President Donald Trump were to deliver on his promise to eliminate the payroll tax, Social Security retirement funds would be depleted as soon as 2023—an entire decade earlier than previously estimated, according to a report from the Social Security Administration.

The chief actuary for the cash-strapped agency warned in a letter to Congress on August 24 that if legislation were passed ending the tax as of January 1, 2021, the trust fund which supports Social Security benefits would be empty by the middle of 2023. Funds for disability payments would run out even sooner, the letter said.

"With no alternative source of revenue to replace the elimination of payroll taxes on earned income paid on January 1, 2021 and thereafter, we estimate that DI (Disability Insurance) Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter," wrote Stephen Goss, chief actuary of the Social Security Administration, in his letter to lawmakers.
So disability gets cut off next year and Social Security runs out in 3 years. Hey Boomers, you like how that'll work out for ya?

Of course, that's a bit misleading, as these benefits could be paid by borrowing money the same way that Uncle Sam borrows for roads or the military or stimulus payments. The only concern is through the iist of problems that can come with huge deficits and debt in general (higher interest rates, inflation, etc.) But claiming Social Security is "bankrupt" has been a long-time strategy of RW slime in order to wreck the program and make more people have to gamble on stocks and other assets for their financial security.

And I'll leave it to one of the authors of that recent letter to Social Security to explain more to you - with special appearances by Trump economic advisor Larry Coke-blow and Wisconsin's own Paul Ryan!

But wait, it gets worse! Not only does Trump's scheme screw up Social Security and disability, but it also has a giant tax increase looming for next year!

TrumpWorld is just making it up as they go along. Nice policymaking, guys.

In addition, the Trump Administration now says it's up to the employer to decide whether they want to take part in this deferral, which means Trump's "executive order" was nothing more than a symbolic suggestion. TrumpWorld assumed that people would fall for the scam and give him the credit before November before it came back to bite them 2 months later. Which is insulting as hell to those of us with an ounce of pride.

At this point, I would encourage all of you to contact your employers and tell them not to cut payroll taxes, in order to avoid getting a surprise tax hike in 2021. Not taking part in this scam would increase the solvency of the successful Social Security program, which lessens the chances of our retirement plans getting destroyed with the next inevitable stock market crash, forcing us to work even longer while the fat cats cash out their profits. And it would prevent those who are unable to work from going broke through no fault of their own.

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