Monday, October 26, 2020

TRUMPS SOCIAL SECURITY

 Various fact check comments regarding the claims of social securities demise. 

Fact check: Biden suggests Trump could deplete Social Security by 2023. Needs context.

Biden suggested Thursday that Trump's policies could bankrupt Social Security.

The president is "the guy that the actuary of Medicare said, of Social Security, that if in fact he continues to withhold, his plan to withhold the tax on Social Security, Social Security will be bankrupt in 2023, with no way to make up for it," Biden said.

The Biden campaign has cited a letter by the Social Security Administration’s chief actuary that said that permanently eliminating all payroll taxes without a replacement would deplete the Social Security trust fund by 2023. But this is not Trump’s current position and the same letter noted that if Congress mandated the cost of the tax cuts come out of the general fund, as Trump has suggested, then benefits would be “essentially unaffected.”

But the White House quickly clarified that Trump doesn’t actually want to eliminate payroll taxes entirely, only to permanently forgive a four-month payroll tax holiday he issued via executive order during the coronavirus crisis. On Aug. 13, for example, press secretary Kayleigh McEnany told reporters: “What he was meaning yesterday is that he wants permanent forgiveness of the deferral.” 

Another important thing to keep in mind: There’s no scenario in which Trump could make any permanent changes to the tax system without the OK of Congress.

In a 1995 speech, Biden said: "When I argued that we should freeze federal spending, I meant Social Security as well. I meant Medicare and Medicaid. I meant veterans benefits. I meant every single solitary thing in the government. And I not only tried it once. I tried it twice. I tried it a third time, and I tried it a fourth time." 

 FactCheck.org® A Project of The Annenberg Public Policy Center 

https://www.factcheck.org/2020/09/bidens-false-attacks-on-trumps-social-security-plan/

A Biden campaign TV ad falsely claims that a government analysis of President Donald Trump’s “planned cuts to Social Security” shows that “if Trump gets his way, Social Security benefits will run out in just three years from now.”

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: “[W]hen I win the election, I’m 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.”

any permanent changes to Social Security would have to go through Congress, and the temporary payroll tax forgiveness — which Trump’s administration and campaign staff claim he really wants — would not “gut” or “wipe out” the program that pays retirement and disability benefits.

In 2019, nearly 90% of the funding for Social Security ($944.5 billion) came from a 12.4% payroll tax on income up to a certain threshold ($137,700 in 2020). That tax is split equally between employers and employees, while self-employed individuals pay the full tax.

In early August, Trump issued a memo allowing the deferral of the employee portion of the payroll tax for workers who earn less than $4,000 in taxable wages biweekly. The break from the tax goes from Sept. 1 to Dec. 31, and so individuals don’t have to pay back that deferred amount next year, the memo instructed Treasury Secretary Steven Mnuchin to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.”

In a press briefing on Aug. 8, Trump said: “If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax. So I’m going to make them all permanent.”

In another news conference on Aug. 10, he stated: “I signed directives to give a payroll tax holiday, with the understanding that after the election — on the assumption that it would be victorious for an administration that’s done a great job — we will be ending that tax. We’ll be terminating that tax.”

And on Aug. 12 he declared: “After I hopefully get elected, we’ll be terminating the payroll tax. So that will mean anywhere from 5,000 [dollars] to even more per family and also great for businesses and great for jobs.” He later added: “We’ll be paying into Social Security through the general fund. And it works out very nicely.”

In the Aug. 12 press conference McEnany referenced, Trump even said at one point: “When I win the election, I’m going to go 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. We’re not going to touch Social Security. I said from day one that we’re going to protect Social Security and we’re going to protect our people.”

“The President has called on Congress to make this deferral permanent,” a White House spokesperson said in an email. “If they do not, this action still effectively allows working Americans to get a sizable advance on their pay starting in a month, which is just when working Americans need it most as we are fighting to end the COVID-19 pandemic.”

President Trump and Administration officials have repeatedly said he wants to make the payroll tax cut deferral permanent to help America’s workers. The President has been clear: his payroll tax cut will have ‘zero impact’ on Social Security or the seniors that rely on the program. He supports transferring money from the government’s general coffers, protecting the program’s Trust Fund.”

The Committee for a Responsible Federal Budget has estimated that, depending on how many employers opt to withhold payroll taxes for their eligible employees, up to $100 billion in tax payments could be delayed. (The deferral is reportedly mandatory for federal workers and members of the military who qualify.)

If Congress doesn’t agree to forgive the withheld taxes, as Trump wants, employees will be required to pay the money back in early 2021, between January and April. “Because most of these taxes would be repaid later, we estimate a deficit impact of roughly $5 billion,” CRFB said in its analysis of Trump’s executive actions.

If lawmakers do forgive the deferred payments, the money needed to make up for the lost tax revenue could either come from Social Security’s trust funds or from general revenues. The first option would speed up the insolvency of Social Security’s trust funds a bit. 

Fact check: President Trump has not said he will terminate Social Security

Camille Caldera

https://www.usatoday.com/story/news/factcheck/2020/08/15/fact-check-donald-trump-hasnt-said-he-terminate-social-security/3343439001/ 

USA TODAY

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" —

“If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax," Trump said, per the Washington Post. “I’m 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.

An official from the White House told USA TODAY on Tuesday that the Social Security Trust Fund is not at risk, since payment deferral is only temporary, and at present, must be paid back early in 2021. The official confirmed, though, that the president called on Congress to make the deferral permanent, thereby eliminating the tax.

Strictly speaking, Social Security could be funded using general fund revenue or alternative revenue source, so terminating a tax and terminating a program are distinct things," he wrote in an email.

Notably, it's not within a president's power to unilaterally change tax law or re-appropriate government funds, experts told the New York Times.  

If reelected, Trump could continue to defer the payroll tax with executive orders, but he could not eliminate the payroll tax entirely or provide a new source of funding for Social Security without support from Congress.

Nancy Altman, the president of Social Security Works, told USA TODAY that the Social Security trust fund has a surplus of $2.9 trillion – only enough to last three years without new tax revenue. **THAT IS if the eliminatation of that tax were permanent.  That can only be done with action of Congress.

But Altman admitted that the administration's actions to date "aren't going to end Social Security." 

Did Trump Vow to ‘Terminate’ Social Security?

https://www.snopes.com/fact-check/trump-terminate-social-security/

  • PUBLISHED 10 AUGUST 2020

The president articulated several different plans for payroll taxes during a press conference at his golf club in August 2020.

On Aug. 8, Trump announced his executive actions at a press conference held at his golf club in Bedminster, New Jersey. During the course of his remarks, Trump referred to the payroll tax deferral, saying, “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 from September 1.”

However, the president made additional remarks that were not contained in the memorandum itself, indicating that he intended to extend that deferral beyond Dec. 31, 2020; to waive any later obligation on employees to pay the deferred contributions; and even that he planned to eliminate payroll taxes entirely. The following is an edited transcript of the relevant section of his remarks. (A full transcript of his press conference is available here, and his remarks can be viewed in full below.)

“If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax. So I’m going to make them all permanent … If I win, I may extend and terminate. In other words, I’ll extend it beyond the end of the year and terminate the tax. And so, we’ll see what happens.”

An important difference exists between extending the deferral of payroll tax obligations and forgiving deferred obligations — just as a very significant difference exists between cutting payroll taxes and terminating them entirely.

However, it should not be ignored that, in the same Aug. 8 speech, Trump also articulated several other plans in relation to payroll taxes, and that at least one of those plans was mutually incompatible with “terminating the tax,” since Trump could not initiate “permanent cuts” to payroll taxes if those taxes no longer existed. As a result, we are issuing a rating of “Mixture” for this claim. 

https://www.politifact.com/factchecks/2020/aug/12/social-security-works/did-trump-say-he-will-terminate-social-security-if/

The statement has an element of truth but leaves out critical information that would give a different impression. We rate this statement Mostly False.

"Donald Trump says he will ‘terminate’ Social Security if re-elected."

  • Trump has deferred about $100 billion in payroll tax payments through the end of the year. The payroll tax currently funds 90% of Social Security.
  • Trump told reporters that if he wins re-election he wanted to “terminate” the program’s primary funding source. He can’t do that on his own.

Trump did use the word "terminate" when speaking about the payroll tax that funds Social Security, but his actual memo only pauses the tax for some employees for a few months. Trump hasn’t said he would end Social Security payments, but he has made comments that many have interpreted as him wanting to eliminate the payroll tax entirely. 

defer the withholding of the payroll tax on wages paid between Sept. 1 and Dec. 31. Each paycheck, employees see 6.2% of their wages go to Washington to help fund Social Security, while employers pay the same amount.

By one estimate, the tax holiday would initially save taxpayers, or alternatively cost the Social Security Trust Fund, $100 billion.   **THAT WOULD EFFECTIVLY GET PUMPED INTO THE ECONOMY AND JOB GROWTH

Employees could be asked to pay the money back, though Trump has said he hopes to forgive the payments all together. 

If the money isn’t paid back, Congress will need to find different funding to support Social Security, as it did during the Obama years. Or the Social Security trust funds end up running dry sooner than expected.

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