You wouldn’t know it from watching the news, but Social Security’s future is on the ballot. If President Trump is re-elected, it’s clear that he will try to greatly weaken and even eliminate Social Security. That’s despite his repeated – but hollow – claims to protect it.
This should not come as a surprise. When he first ran for president, in 2000, he said he wanted to privatize Social Security, calling it a “Ponzi scheme.” He wanted to eliminate guaranteed benefits, and have people gamble on the stock market instead. He also promoted raising the age of full benefits up to 70.
After starting to serve as president in 2017, his budget proposals each year have sought large cuts in funding for Social Security disability. His latest one, for fiscal year 2021, seeks $75 billion in cuts for recipients of Social Security Disability (over half of whom are age 55 +), over 10 years. This includes $10 billion in benefit cuts, plus plans to reduce the number of people enrolled by about 5 percent. That would be accomplished with harsher work rules that determine who can qualify. Another cut is to lower the initial retroactive benefit that people get when they first go on Social Security Disability. It currently is 12 months retroactive, but Trump wants to reduce it to six months.
Sought cuts for administrative expenses
His budgets have also included cuts for Social Security’s administrative expenses. That translates into fewer offices, shorter hours, fewer staff, and longer times to process applications to get on Social Security, or even to get answers to simple questions.
Don’t be fooled by Trump’s focus on Social Security just for the disabled. People on regular retirement Social Security had better worry, too. His 2021 budget proposal talks about a need to “reduce the rate of increase” in Social Security payments. That sounds like code words to reduce the annual Cost Of Living Adjustment; increase the age to start getting benefits; reduce the initial benefit formula – or maybe all of the above.
When you think about the COVID-19 pandemic and its economic effect on families and workers, the importance of Social Security becomes all the more apparent. The recession that accompanies our pandemic in the U.S., (worsened by Trump’s botched response) will be depressing future Social Security benefits for an estimated 4 million Americans who become eligible in 2022, because of the severe drop in average wages nationally. According to a study by the Center for American Progress, their benefits will be about $1,428 per year lower than if the pandemic never happened.
The payroll tax issue
Trump has done something with Social Security in light of the pandemic: He is allowing businesses to forgo collecting Social Security payroll taxes for their employees, for September through December. After that, those missing taxes would have to be collected and paid. Not surprisingly, few businesses are choosing to follow this option. To get a four-month vacation from the payroll taxes, only to have to then pay them back, doesn’t make any sense.
Trump has said something else, which is extremely alarming: If re-elected, he will consider doing away with the payroll tax altogether. If that were to occur, and no other revenue source found to replace it, then we already know the result. Social Security’s chief actuary has testified that if this were to happen, all Social Security Disability benefits would cease in mid 2021, and all Social Security Retirement benefits would cease in mid 2023.
What was he thinking? Despite his coyness, we can see what Trump really wants: his long-held dream of destroying the current Social Security system, and turning it into a privatized gamble. Andrew Biggs, who helped write President George W. Bush’s ill-fated privatization proposal, explained recently that Trump’s ideas can lead to changing Social Security into two parts: a small, income-tax funded benefit for only the poorest, and private investment accounts for everyone else.
So, Trump really looks at the pandemic as a way to further his goal of wrecking and privatizing Social Security. We all need to be seriously concerned.
Buddy Robinson is a former staff director of MN Citizens Federation NE, who has worked for several years with MN AFL-CIO retirees.
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