“It’s bad enough that seniors and people with disabilities are bearing the brunt of the COVID-19 pandemic. Using it as a subterfuge to undermine their financial security is unconscionable and unacceptable.” -- National Education Action
By Miriam Raftery
August 29, 2020 (Washington D.C.) – Disability payments will end next year and Social Security payments to the elderly will stop in 2023 under President Trump’s executive order to cut payroll taxes, which took effect Friday, unless alternative funding is provided, Market Watch reports. That dire warning was issued August 24 by the program’s Chief Actuary, Stephen Goss, in a letter to key Senators.
Effective Aug. 28, Trump’s executive order temporarily suspends the 6.2% payroll tax collections from employers for employees under $104,000, which is used to fund Social Security and disability payments. (Employers until now have matched a 6.2% deduction paid by workers.)
Trump wants to make that permanent if reelected. On Aug. 8, Trump stated, “If I’m victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax.” He made clear, “In other words, I’ll extend it beyond the end of the year and terminate the tax.”
But Goss, the Chief Actuary for the Social Security and Disability Insurance programs, warns that making the cut permanent will mean the near-immediate end of both programs. In his letter, he warns that if the payroll tax cut is eliminated with no alternative source of revenue to replace it (and Trump has not proposed any alternatives), “We estimate that DI (disability insurance) Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter. We estimate that OASI Trust Fund reserves would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI (Social Security) benefits thereafter.”
For many elderly and disabled people without pensions or paychecks, those payments are their only income sources – and many are not physically able to work. Prior to adoption of Social Security under President Franklin Roosevelt in the 1930s, 50% of U.S. seniors lived below the federal poverty level. Adoption of Social Security reduced that to 10%, giving seniors dignity and security. Seniors have paid into the system throughout their working careers, so ending the program would rob them of their investment.
The National Education Action, in an email to members in the education field, called the cuts the “potentially worst of all” proposals. According to the NEA, suspending collection of the payroll tax that funds Social Security and Medicare for the rest of this year is a “backdoor approach to dismantling both programs as we know them. He has pledged to cancel the tax permanently if reelected – a move that would put their very existence of these essential programs at extreme risk.”
The education group concludes, “It’s bad enough that seniors and people with disabilities are bearing the brunt of the COVID-19 pandemic. Using it as a subterfuge to undermine their financial security is unconscionable and unacceptable.”