Trump’s Plan for “Permanent” Reduction in Payroll Contributions Would Undermine Social Security

FOR IMMEDIATE RELEASE
April 8th, 2020
Contact: Linda Benesch, lbenesch@socialsecurityworks.org

(Washington, DC) — The following is a statement from Nancy Altman, President of Social Security Works, in response to Donald Trump yet again calling for a reduction in payroll contributions at last night’s press conference:

“For weeks, Donald Trump has single-mindedly demanded a reduction in payroll contributions. As a response to the coronavirus crisis, this makes no sense. It’s slow, inefficient, and (as the chart below shows) fails to get money into the pockets of those who need it most.

Last night, Trump admitted this was never about the pandemic at all. He said he’d support a “permanent” reduction in payroll contributions “regardless” of the current situation. The only reason to support this policy over better targeted, more efficient measures is if your true goal is to undermine Social Security.

Payroll contributions are Social Security’s dedicated revenue. They are premiums that workers pay every month in return for insurance against loss of wages due to old age, disability, or death of a breadwinner. They are the reason, as even conservative President Ronald Reagan understood, that Social Security does not add a penny to the deficit.

At a moment when the government is running unprecedented deficits, keeping Social Security self-financing is more important than ever. President Franklin D. Roosevelt understood this, famously remarking, “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.”

The “damn politicians” that Roosevelt foresaw have tried privatizing Social Security. They’ve tried cutting benefits behind closed doors. Each time, they failed. So now, they are trying to “starve the beast” by cutting the program’s funding. This is the most dangerous attack of all.

In this time of unprecedented crisis, we need to get assistance to people who need it the most without undermining their long-term financial security. Direct payments will do that. Trump’s plan to reduce Social Security’s dedicated payroll contributions would do the opposite.”

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