Is Trump Defunding Social Security And Medicare Concerns Mount After President’s Executive Order
President Donald Trump’s Saturday decision to sign an executive order to defer payroll taxes has fueled concerns that he is attempting to defund Social Security and Medicare, with the latest order drawing criticism from conservatives and liberals alike.
“First one is on providing a payroll tax holiday to Americans earning less than $100,000 per year,” the president said during a Saturday press briefing. “In a few moments, I will sign a directive, instructing the Treasury Department to allow employers to defer payment of the employee portion of certain payroll taxes…”
Trump said that he would make the temporary tax deferral permanent if he was re-elected in November. “So I’m going to make them all permanent,” he said.
Notably, this is not a tax cut. Under the wording of the executive order, the payments would simply be deferred until next year unless further actions were taken.
Whether Trump’s executive orders, which also provided an extension of extra federal unemployment benefits at a reduced rate of $400 per month, will withstand legal scrutiny is a matter of debate. His decision came as Republicans and Democrats in Congress remained at an impasse over a new round of coronavirus economic stimulus legislation. Under the Constitution, Congress, not the Executive Branch, is granted power over spending federal funds.
Did They Back Up Their Claim
Linked inside the tweet was a letter from Stephen C. Goss, the chief actuary of the Social Security Administration. In this letter, which was penned at the request of four Democratic senators, Goss explains the effects of a permanent payroll tax cut. Goss letter states that, f this hypothetical legislation were enacted we estimate that Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, and also that Trust Fund reserves would become permanently depleted by the middle of calendar year 2023.
This is a memo from a government official that describes what would happen if payroll taxes were to be permanently cut and no alternative source of revenue was used to pay for these benefits. But is that the presidents plan?
The Claim: President Donald Trump Promised To ‘terminate’ Social Security If He Is Reelected
Recent posts from Social Security Works a nonprofit focused on expanding Social Security, improving Medicare and lowering the cost of prescription drugs claim that President Donald Trump will end Social Security if he is reelected.
“Donald Trump says he will ‘terminate’ Social Security if reelected,” a post on Monday reads. “A vote for Trump is a vote to destroy our social security system.”
“Millions of seniors and people with disabilities struggle to make ends meet,” another post from the same day reads. “Yet Donald Trump says he will ‘terminate’ Social Security if reelected. That’s a disastrous plan.”
The posts come after Trump signed a series of executive orders on Aug. 8 intended to provide relief from the detrimental economic impact of the coronavirus pandemic.
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Bidens False Attacks On Trumps Social Security Plan
A Biden campaign TV ad falsely claims that a government analysis of President Donald Trumps planned cuts to Social Security shows that if Trump gets his way, Social Security benefits will run out in just three years from now.
The Social Security Administrations chief actuary analyzed hypothetical legislation that would eliminate the payroll tax that funds Social Security not a proposal from Trump. The president has said he wont cut benefits.
Democratic presidential nominee Joe Biden and others who oppose Trumps reelection have capitalized on confusing statements Trump made in August. He has said on multipleoccasions that, if reelected, he would look at ending or terminating the payroll tax.
But White House and Trump campaign officials have said the president actually wants to forgive a four-month payroll tax holiday he authorized via executive action last month. Trump himself has said: hen I win the election, Im going to completely and totally forgive all deferred payroll taxes without in any way, shape or form hurting Social Security. That money is going to come from the general fund.
Advertising Analytics says the Biden campaign has spent over $1.3 million on the 30-second commercial, which has aired more than 5,500 times in swing states like Michigan and Arizona since Sept. 3.
What Has Trump Said?
What Does He Mean?
The Press And The Public Fundamentally Misunderstand Social Security And They Always Have
The problem begins with already-dangerous levels of public ignorance and political opportunism regarding Social Security. Reporters and pundits truly do not understand much if anything about the system, so when they hear people say that the systems Trust Fund might be depleted at some point in the future, a Chicken Little response quickly follows.
Indeed, for many years, I knew that I would have to write columns here on Verdict or elsewhere as soon as the trustees of the Social Security system issued their annual reports. The news cycle would quickly be dominated by stories about the system going bankrupt, belly up, or running out of money. I would then feel honor-bound to publish a column pointing out that this is nonsense, even though I had written pretty much the same column the previous year .
As I noted in 2018, however, I had at that point gone almost two years without writing about Social Security here on Verdict. It was hardly a coincidence that the Republicans retirement fearmongering had stopped at the end of 2016. Trump, after all, had promised his older, White base of voters that he would leave Social Security alone and because the system was fundamentally sound, there was no need for anyone to make a big deal about it. And with Trumps relentless noise machine running full blast on other issues, everyone finally seemed willing to leave Social Security alone.
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Watch Ivanka Trumps Full Speech At 2020 Rnc
Ivanka Trumps remarks about the private sector are a reference to the president’s invoking of the Defense Production Act a 1950 law allowing the president to force U.S. businesses to produce materials in the national defense, such as ventilators and medical supplies for health care workers.
But Trump dragged his feet in actually putting the act into effect.
As NBC News noted in a fact check of remarks Tuesday night by Ivanka Trumps brother, Donald Trump Jr., the president had said on March 18 that he was going to invoke the DPA. But he waited more than a week to actually invoke it, finally using it on March 27 to force GM to make ventilators.
During that key stretch, hospitals and doctors implored the administration to use the DPA to increase the capacity to produce needed equipment. In a March 21 letter to Trump, the American Hospital Association, the American Medical Association and the American Nurses Association all urged Trump to “immediately use the DPA to increase the domestic production of medical supplies and equipment that hospitals, health systems, physicians, nurses and all front line providers so desperately need.” The first case of COVID-19 in the U.S. was found on Jan. 20, according to the Centers for Disease Control and Prevention.
Fact Check: Trump Hammers Biden On Nafta Support Which He Said Killed Jobs He’s Right
President Trump used part of his speech Thursday night to hammer Joe Biden on his support of catastrophic trade deals he said bled U.S. jobs to other countries.
Biden voted for the NAFTA disaster, the single worst trade deal ever enacted he supported China’s entry into the World Trade Organization, one of the greatest economic disasters of all time. After those Biden calamities, the United States lost 1 in 4 manufacturing jobs, Trump said.
This claim is true, although trade was not the only reason that U.S. companies shed these jobs.
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The Trump Executive Order And His Ramblings About Social Security Taxes
Donald Trump, however, has now blundered his way into the Social Security arena, and his semi-coherent musings suggest that he might be willing to undermine our countrys entire retirement program.
An executive order that Trump signed last month, and that took effect earlier this week, delays some workers payments of payroll taxes for Social Security from the end of this year to the beginning of next year. Interested readers might find my Dorf on Law column from two days ago useful in understanding the details of the order, but the bottom line is that workers earning less than about $100,000 per year will be able to pay no payroll taxes from September through December but would then pay double their payroll taxes from January through April 2021.
Trumps order is a terrible idea in many ways, as I discuss in my column, but the one thing it does not do is to threaten the long-term stability of the Social Security system. Setting some minor details aside, the Treasury would collect the same amount of money over the next eight months under either the old system or Trumps new one.
But it is Trumps non-binding loose talk about what he would do next that is both fascinating and horrifying.
But wait, theres moreand it is much, much worse. In his stream-of-consciousness remarks last month after announcing his Social Security order, Trump said: If I win, I may extend and terminate. In other words, Ill extend it beyond the end of the year and terminate the tax.
President Trump Wont Destroy Social Securitybut Hes Not Going To Save It
AFP via Getty Images
Former Vice President Joe Biden is running campaign ads that claim President Trump signed an executive action directing funding cuts for Social Security and proposed slashing hundreds of billions of dollars from the Social Security Trust Fund every year.
The problem is, however, that this just isnt so.
A Biden campaign TV ad falsely claims that a government analysis of President Donald Trumps planned cuts to Social Security shows that if Trump gets his way, Social Security benefits will run out in just three years from now, says FactCheck.org.
The cliche politics aint beanbag exists for a reason: Campaigns use overhyped rhetoric to distort their opponents positions and make them appear less electable. Seniors should rest easy and understand that their Social Security benefits arent going anywhere.
But this dynamic of misleading charges belies a more fundamental problem: Something will eventually need to be done to buttress Social Securitys finances. Episodes like this dont bode well for future attempts to reform Social Security.
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Trump Hits Biden Over Trade Manufacturing
Job losses resulting from NAFTA tend to be overstated but one major study found that more than 850,000 jobs were displaced by the pact.
Robert E. Scott of the pro-labor Economic Policy Institute found that about 851,700 U.S. jobs were displaced by the U.S. trade deficit with Mexico from 1993 to 2014.
When it comes to normalizing trade relations with China a status President George W. Bush formally granted in 2001 after China entered the World Trade Organization U.S. job losses have been larger, according to studies.
The nonpartisan Congressional Research Service wrote in 2018, citing a 2014 study by the Economic Policy Institute, that growth in the U.S. goods trade deficit with China between 2001 and 2013 eliminated or displaced 3.2 million U.S. jobs .
If you add the 851,700 figure with the 3.2 million figure, you would see a figure that approximates 4 million, which is roughly 25 percent of the estimated 17 million manufacturing jobs that existed in 1994.
Experts have pointed out, however, that technology and automation has likely had at least as much of an effect on these losses in manufacturing jobs, with many noting that the losses would have occurred even without NAFTA.
Vice President Pence Talks Law And Order On 3rd Night Of Gop Convention
Pence’s tack reflects a larger Republican strategy for the convention and the broader Trump re-election campaign that tries to focus voters on a generic fear of the unknown rather than problems at hand. It is, of course, Trump and Pence who have presided over the coronavirus crisis and its devastating impact on the economy, the civil unrest in the wake of police killings of Black men, women and children, and the emboldening of white supremacist militia groups.
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Everything You Need To Know About Trump’s Views On Social Security
According to the newest report from the Social Security Board of Trustees, the $2.9 trillion in asset reserves that have been built up since the program’s inception more than eight decades ago are expected to be completely exhausted by the year 2035. This expected net cash flow, which is forecast to begin in 2020 and grow in size with each subsequent year, is the result of a multitude of ongoing demographic changes, as well as inaction on the part of lawmakers in Washington, D.C. Should Congress fail to act, then-current and future retirees could see their monthly retired worker checks cut by as much as 23%.
Because of Social Security’s known importance — 62% of current retirees lean on their monthly benefit for at least half of their income — it pays for the American public to understand how each candidate, including the sitting president, views the program and potential solutions. With that being said, here are nine things you should know about Donald Trump’s views on America’s greatest social program.
Fact Check: Cotton Accurately Quotes Former Obama Defense Secretary On Biden
Sen. Tom Cotton, R-Ark., leveled several accusations against Joe Biden, mostly regarding his views and actions as vice president on foreign policy. This one, about what a former defense secretary had to say about Biden’s judgment, is accurate.
Cotton said that Barack Obama’s own secretary of defense said Joe Biden has been wrong on nearly every major national security decision over the past four decades.
This is true. Robert Gates, who served as President Obamas secretary of defense for more than two years, wrote in his 2014 memoir, Duty: Memoirs of a Secretary At War, that Biden had been wrong on nearly every major foreign policy and national security issue over the past four decades.”
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Trumps Plan To Defund Social Security
Permanently terminating the employee payroll tax along the lines President Trump has proposed would empty Social Securitys trust fund by 2026 or earlier.
On August 8, at his golf club in Bedminster, New Jersey, President Donald Trump announced that his administration is seeking to delay much of the payroll tax that funds Social Security1 of 4 unilateral actions he took in lieu of negotiating with Congress on meaningful economic relief legislation. The president also said that if he is reelected, he wants not only to turn the delay into a tax cut that would result in significant revenue losses for Social Security, but also to eliminate employee payroll taxes for good. As our analysis based on the Social Security trustees projections shows, eliminating employee payroll taxes along the lines that the president has proposed would, absent additional action, completely exhaust the Social Security trust fund by 2026 or earlier and result in steep benefit cuts.
people receive Social Security.
This would drain about $350$450 billion in payroll tax revenue in 2021 and more in later years.
The percentage of promised benefits recipients would receive in Social Security if the trust fund is exhausted
Based on the latest Social Security trustees projections, we estimate:
Seth Hanlon and Christian E. Weller are senior fellows at the Center for American Progress.
Trump Deferred The Tax That Funds Social Security And Vowed To ‘terminate’ The Tax In The Future
The vast majority of Social Security is financed through the payroll tax, according to the Social Security Administration. In 2019, 89% of Old-Age and Survivors Insurance and Disability Insurance was financed via payroll taxes equal to $944.5 billion.
One of the Aug. 8 executive orders instructed the Treasury Department to allow employers to defer payment of payroll taxes for employees who make less than $100,000 each year.
The deferrals, which may start Sept. 1 and extend through 2020, are intended to allow Americans to use the totality of their income amid the pandemic’s hardships.
The order also instructed Treasury Secretary Steven Mnuchin to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred” a goal Trump reiterated in remarks after he signed the order.
If Im victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax,” Trump said, per the Washington Post. Im going to make them all permanent.
“In other words, I’ll extend it beyond the end of the year, and terminate the tax,” he added. He reiterated his plan at a press conference on Monday.
“We will be ending that tax. We will be terminating that tax,” Trump said, per a transcript from CNN. “The payroll tax is a big deal for people. It’s a tremendous saving for people. And we’re going to be doing it, and we intend to terminate it at the end of the appropriate period of time.”
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Ben Carson Discusses Jacob Blake Says Trump Isn’t Racist
Ben Carson made what appeared to be the first mention of Jacob Blake, the Wisconsin man shot seven times by police, at the Republican National Convention on Thursday.
“Before I begin, Id like to say that our hearts go out to the Blake family, Carson said. The images everyone has seen from this tragic event in Kenosha are heart-wrenching. This action deserves a serene response, one that steers away from the destruction of a community that molded Jacob and his family into the kind of man his family and friends know today.”
In order to succeed in change, we must first come together in love of our fellow citizens, he continued. It may be hard to believe now, but indeed our country, our world, have been through worse and history reminds us that necessary change comes through hope and love, not senseless and destructive violence.
Carson then transitioned his speech into pitching Trump as not racist, echoing several other speakers of color at the Republican convention.