If President Donald Trump follows through on his stated plans for this week leading up to his hundredth day in office, it will be a head-spinning time for those of us trying to keep up.
So let's take a look today at one of the nefarious ideas the Republicans are plotting for Social Security. We all know better now, don't we, than to trust anything Trump says on any given day. Just in case, here is a reminder of one promise from the campaign:
He said that about Medicare, Medicaid and Social Security over and over and over again at hundreds of rallies.
Then, about two weeks ago, AP reported that the Trump administration is mulling over tax cuts including a House Republican plan, proposed by “a GOP lobbyist with close ties to the Trump administration,” to cut the 12.4 percent Social Security payroll tax.
”This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security...”
Although the idea is short on details, it appears that the current Social Security funding via the payroll tax would be replaced with something like a VAT (value added tax) on imports that would be held in the general fund instead of in the Social Security trust fund.
Nancy Altman, the Social Security expert who works tirelessly to protect the program, calls the proposal a Trojan horse, as she explained at Huffington Post:
“[This proposal] appears to be a gift in the form of middle-class tax relief, but would, if enacted, lead to the destruction of working Americans' fundamental economic security...”
”Not only would the Trump proposal starve Social Security of dedicated revenue, it would ultimately destroy it. Social Security is not a government handout. It is wage insurance that the American people earn, as part of their compensation, and, indeed, pay for with deductions from their pay.
Let's back up a little. Here is a photo of President Franklin D. Roosevelt signing the Social Security bill into law on 14 Ausut 1935.
This is what he said during the signing ceremony:
"We can never insure one-hundred percent of the population against one-hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against…poverty-ridden old age.”
And so it does. Without Social Security, 22 million people it currently insures would be living in poverty.
The dedicated Social Security Trust Fund did not exist when FDR signed the original legislation so in 1939, he signed additional legislation creating it, he said,
“…to give the contributors a legal, moral and political right to collect their pensions…With those taxes in there, no damn politician can ever scrap my social security program.”
I guess Mr. Roosevelt didn't count on the damn politicians of the Trump regime.
[For an easily understandable explanation of how the Social Security Trust Fund works, see my post from December 2004.]
When this subject came up at a meeting I attended last week where all attendees were elders who receive a Social Security benefit, one said that it doesn't matter if the idea succeeds because any changes to the program will not affect current recipients.
I hear that way too often but I'm pretty sure that like me, most of you are ready to fight to maintain this program for your children and grandchildren and beyond – fewer and fewer of whom make enough money these days to save for their retirement.
So keep your eye on all Republican budget proposals to see what they're doing with the Social Security trust fund. That way you'll know what you're talking about when the time comes to call your representative and senators in Washington about this.
Here's is a last word on the subject of scrapping the payroll tax (for today) from the estimable reporter, Michael Hiltzig of the Los Angeles Times:
”Already, conservatives and budget hawks repeat as a mantra that the cost of Social Security is 'unsustainable.' That’s their claim even though the program runs a surplus today and ensuring its fiscal stability for the future would require a modest increase in the tax rate or removal of the cap on taxable wages ($127,200 this year).
“Scrapping the payroll tax would make it easier for Congress to cut Social Security benefits under the guise of saving the government money. And that’s just another way to funnel more money to the rich, at the expense of the working class. And who needs that, other than people who already have enough?”