It is politics as usual during this presidential election year. One of the issues important to retirees that has emerged is the funding of Social Security.
Because the National Retiree Legislative Network is a non-partisan organization, I believe I have a responsibility to try to be as objective as possible in my comments about Donald Trump, the 2020 Republican candidate, and Joe Biden, the Democrat candidate for President, and Social Security.
On August 8th President Trump issued a COVID-19 economic stimulus executive order that included the deferral of employees’ portion of the payroll tax from September 1 through the end of 2020. A 12.4% payroll tax split evenly between employers and workers earning up to $137,700 (for 2020) is an important funding source for Social Security. (Medicare is partially funded by a separate employer/worker payroll tax of 2.9%. The President’s tax deferral does not apply to this payroll tax.)
President Trump stated during a press conference on August 12th, “At the end of the year, with the assumption that I win, I’m going to terminate the payroll tax.” He went on to say that Social Security would be paid for through the General Fund.
The executive order stated: “the Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.” President Trump cited his authority to defer collection of the employee portion of Social Security FICA taxes by reason of a presidentially-declared disaster due to the Coronavirus pandemic.
Only Congress can terminate the payroll tax. On May 5, 2020, I sent letters to the Chairmen and Ranking Members of House Committees on Ways and Means, Energy and Commerce, and Senate Committee on Finance to urge them to oppose President Trump’s repeated requests to suspend the payroll tax. With House and Senate Democrats and many Republicans against the elimination of the payroll tax, it is unclear how President Trump could terminate the payroll tax if he is reelected.
The Biden campaign quickly issued an ad stating that Donald Trump “signed an executive action directing funding cuts for Social Security.”
There is an old adage that, “those who live in glass houses should not throw stones.” That could also apply to politics.
In 1973, Senator Biden supported a 7% increase in monthly Social Security benefits. However, in 1984, Senator Biden – during budget negotiations — co-sponsored a spending freeze plan that included the Social Security cost-of-living adjustments for the year. The proposal was defeated in the Senate by a vote of 65 to 33.
In 1995, Senator Biden supported an amendment to prevent Social Security cuts from being in any balanced budget legislation. A year later, he suggested raising the retirement age by one year and reducing the cost-of-living adjustment by 1% as a way to prevent the future insolvency of Social Security.
On September 8, 2019, the NRLN issued an Action Alert supporting H.R. 860 / S. 269, the Social Security 2100 Act. The bill comes the closest to the NRLN’s position to make Social Security financially strong for our generation, our children, grandchildren and great grandchildren. The NRLN, retiree associations and chapter leaders lobbied for the bill on Capitol Hill during our 2019 and 2020 fly-ins to Washington, DC. Unfortunately, no action has been taken on the Social Security 2100 Act in the House or the Senate.
As we move toward election day, the NRLN will continue to monitor the presidential campaigns on Social Security, Medicare and other issues important to retirees and speak out if necessary.
Bill Kedereit, President
National Retiree Legislative Network