Trump Threatens Social Security (Again) While Biden Has a Plan to Strengthen It
One of the sticking points in negotiations over Coronavirus relief has been Donald Trump’s insistence on a payroll tax holiday. Many Republicans do not support the measure, and even after Trump signed an executive order allowing for the holiday, most companies aren’t taking it.
Regardless, Trump continues to push for a total elimination of the payroll tax, which is a real and direct threat to Social Security. In 2019, the payroll tax funded 89% of Social Security’s revenue. Without the tax, Congress would have to magically discover an extra $945 billion dollars — per year — to keep the program afloat.
According to the Social Security program’s chief actuary, eliminating the payroll tax at the end of 2020 would mean Social Security could no longer make disability payments after mid-2021, and payments to seniors would stop in 2023.
Joe Biden wants to strengthen Social Security. Instead of bankrupting the fund, he would apply the payroll tax to earnings over $400,000. Currently, top earners pay nothing into Social Security. Joe Biden will change that.
Biden’s plan also includes a provision that would set a minimum benefit, so all workers who put in 30 years of work would receive payment of at least 125% of the poverty level.
Donald Trump is no populist. He wants to upend one of the most successful anti-poverty programs of the last 100 years to appease his wealthy business owner friends. Protect Social Security with your vote November 3.
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About 80 cents of each dollar you pay in Social Security taxes goes to the old-age insurance fund, the rest to disability. In 2019, those taxes — called FICA for people with wage-earning jobs and SECA for the self-employed — brought in nearly $945 billion, accounting for 89 percent of Social Security’s revenue, according to the 2020 annual report from Social Security’s board of trustees.
THE FACTS: Trump, in effect, has proposed a dramatic restructuring of how Social Security is financed by not relying on the payroll tax as a dedicated source, but instead by tapping the general fund… The risk is that the loss of a dedicated funding source could destabilize an anti-poverty program that provides payments to roughly 65 million Americans. A 12.4% payroll tax split between employers and workers funds Social Security, while a 2.9% payroll tax finances Medicare. These taxes raised $1.24 trillion last year, according to the Congressional Budget Office. Over a 10-year period, Trump’s idea would blow a $16.1 trillion hole in a U.S. budget that is already laden with rising debt loads.