Experts: Analysis shows Trump proposal would "dramatically worsen Social Security’s finances"

Marin Scotten
Mon, October 21, 2024 

Donald Trump | Social Security Photo illustration by Salon/Getty Images

Social Security funds could run out in the next six years if former President Donald Trump wins in November, according to a new report from the bipartisan group Committee for a Responsible Federal Budget.

The program's funding is already in crisis and expected to become insolvent as early as 2033. Trump’s policies would add over $2.3 trillion to Social Security’s deficit between 2026 and 2033 and — and cause a 33% cut to benefits in 2035, the report found.

“We find President Trump’s campaign proposals would dramatically worsen Social Security’s finances,” the report released Monday states.


Many of Trump’s proposals would “widen Social Security’s cash deficits,” the report reads. Currently, 40% of Social Security recipients pay taxes on some portion of their benefit and that money goes back into the program. Trump has proposed to cut the taxation of all Social Security benefits, which would dramatically weaken the program’s longevity.

The Republican nominee has also promised to cut taxes on tips and overtime pay, which could cost Social Security anywhere from $150 million to $1 trillion, the report found. His proposed import tariffs and mass deportations of undocumented immigrants would also impact the program, which benefits over 71 million people.

“If President Trump’s campaign agenda were enacted in full, we estimate it would shrink that window by one-third, to only six years," the report said.

The watchdog group found that Vice President Kamala Harris’ proposed policies would neither accelerate or slow Social Security’s funding trajectory.

Despite Social Security’s uncertain future, the topic hasn’t come up much in this year’s election conversations. Both candidates have vaguely pledged to protect the program, but neither has shared a detailed plan for doing so.

Trump Proposals Could Lead to a 33% Cut in Social Security Benefits

Michael Rainey
Mon, October 21, 2024

Social Security will be forced to cut benefits by an estimated 23% in 10 years if Congress fails to prop up the program’s trust funds before then, but a new analysis from a budget watchdog group warns that Republican presidential candidate Donald Trump’s proposals would move up the day of reckoning by as much as three years while forcing an even larger benefit reduction.

The report from the nonpartisan Committee for a Responsible Federal Budget, which advocates for debt and deficit reduction, found that several of Trump’s proposals would widen Social Security’s projected financial shortfall. Ending taxes on Social Security benefits would reduce the program’s cash balance by an estimated $950 billion between 2026 and 2035. Eliminating federal income taxes on tips and overtime income would cost about $900 billion over the same time period, while the combination of more restrictive immigration rules, which would reduce the number of migrant workers paying into the system, and higher tariffs, which would increase the cost of many goods and thereby increase annual cost-of-living adjustments, would cost about $400 billion.

Altogether, the proposals would reduce the cash balance in the Social Security system by roughly $2.3 trillion over a decade, according to the group’s “central estimate” of the effects of Trump’s plans. (The “low” estimate for the revenue loss is $1.3 trillion over 10 years, while the “high” estimate is $2.8 trillion.)

As a result, the Social Security system would be forced to cut benefits in fiscal year 2031 rather than in 2034, as currently projected. “In other words,” the group said, “the trust funds would be insolvent only six years after the next President takes office instead of nine – reducing the remaining life of the trust fund by one-third.”

Additionally, the size of the benefit cut would increase under Trump’s proposals. The current projected 23% cut — roughly $16,500 a year for a typical dual-income household — would become a 33% cut by 2035.

No plans to bolster Social Security on the table: Neither presidential candidate has offered a plan to improve Social Security’s long-term financial health and avoid the projected benefit cuts. The CRFB analysts did note, however, that Vice President Kamala Harris’s proposals would not have a significant negative effect on the Social Security trust funds.

Harris campaign spokesperson Joe Costello told CBS News that the analysis shows that Trump is a threat to the Social Security system, while the Democratic candidate seeks to safeguard it. “Vice President Harris is committed to protecting Social Security benefits and is the only candidate who will actually fight for seniors, not just pay them lip service on the campaign trail,” Costello said.

Trump spokeswoman Karoline Leavitt rejected the CRFB analysis altogether while arguing without basis that undocumented immigrants are a serious threat to the Social Security system. “The so-called experts at CRFB have been consistently wrong throughout the years,” Leavitt said in a statement. “By unleashing American energy, slashing job-killing regulations, and adopting pro-growth America First tax and trade policies, President Trump will quickly rebuild the greatest economy in history and put Social Security on a stronger footing for generations to come,” she said.

In its analysis, CRFB addressed Trump’s argument about the curative power of energy production, saying, “increased energy exploration is unlikely to have a meaningful effect on Social Security.” And while faster economic growth could indeed help Social Security’s finances, CRFB was skeptical about the potential for Trump’s plans to do so. “[B]ased on available analyses and understanding the effects of President Trump’s agenda on the national debt, it is unlikely his plans would significantly boost the size of the economy, and many estimates find his plans would reduce long-term output,” CRFB said.
chart-Social-Security-trust-fund-CRFB-10212024-600.png




A Trump presidency would drain Social Security's finances faster, budget group warns

Grace Eliza Goodwin
Updated Mon, October 21, 2024 at 2:26 PM MDT·4 min read

Trump's proposals would dramatically worsen Social Security's finances, a nonpartisan budget group is warning.


The group predicts Trump's agenda would push up Social Security insolvency by 3 years.


Harris' proposals would have little impact on Social Security's insolvency timeline, the group says.

Americans are in danger of losing their full benefits by the mid-2030s — and a nonpartisan budget group is warning that if Trump is elected, his policies could push the funding crisis years sooner.

The Committee for a Responsible Federal Budget (CRFB), a nonpartisan nonprofit that examines the impacts of fiscal policies, released a report Monday outlining the negative effects it predicts a second Trump presidency would have on Social Security.

"We find President Trump's campaign proposals would dramatically worsen Social Security's finances," the CRFB wrote in its report.

In a recent report, the Congressional Budget Office predicted that a main Social Security trust fund could be exhausted in 2034, meaning that Americans wouldn't get their full benefits.

The Social Security and Medicare Boards of Trustees estimated that the fund would run out a year later, in 2035.

But the CRFB estimates in its report that if Trump wins a second term and enacts his current campaign proposals, those funds would become insolvent three years sooner than the CBO's prediction, in 2031. The CRFB says that would lead to Americans losing 33% of their Social Security benefits across the board by 2035 — a bigger cut compared to the CBO's current 23% projection.

The CRFB estimates that the Republican presidential nominee's promises to stop taxing Social Security benefits, eliminate taxes on tips and overtime, impose tariffs, and increase deportations would worsen Social Security's cash deficits when combined.

But that's not all the damage Trump's proposals would do, according to the CRFB.

In addition to advancing the insolvency timeline and reducing Americans' benefits, Trump's agenda would raise Social Security's ten-year cash shortfall by $2.3 trillion through 2035 and raise its annual shortfall by about 50% in 2035, the CRFB predicts in its report.

For Social Security to restore 75-year solvency under these conditions, current law benefits would need to be decreased by about a third, or revenue would need to increase by half.

The Trump campaign's national press secretary, Karoline Leavitt, disputed the CRFB's report in a statement shared with Business Insider.

"The so-called experts at CRFB have been consistently wrong throughout the years. President Trump delivered on his promise to protect Social Security in his first term, and President Trump will continue to strongly protect Social Security in his second term," Leavitt said in the statement.

"By unleashing American energy, slashing job-killing regulations, and adopting pro-growth America First tax and trade policies, President Trump will quickly rebuild the greatest economy in history and put Social Security on a stronger footing for generations to come, all the while eliminating taxes on Social Security for America's well-deserving seniors," Leavitt continued.

Meanwhile, the CRFB had a rosier outlook when it examined Kamala Harris' policy proposals.

The CRFB says in its report that the Democratic presidential nominee's campaign proposals "would not have large effects on Social Security trust fund solvency." Because Harris's policies would only affect the insolvency timeline by weeks or months, the group did not create a similar report for her, CRFB's senior policy director Marc Goldwein said, according to the Washington Post.

A spokesperson for the Harris-Walz campaign, Joseph Costello, said in a statement shared with BI: "Vice President Harris is committed to protecting Social Security benefits and is the only candidate who will actually fight for seniors, not just pay them lip service on the campaign trail."

Both Trump and Harris have said they would protect Social Security, but neither candidate has laid out specific plans to alleviate the expected $16,500/year cut to benefits that a typical couple retiring just before insolvency could face, the CRFB said in its report.

The promise of Social Security to provide a retirement free from poverty is already not living up to the reality many Americans are facing.

Business Insider previously spoke to over 40 baby boomers and some Gen Xers who said they're struggling to reach a comfortable retirement, and Social Security isn't doing enough to keep them afloat. Some retirees have even had their benefits unexpectedly slashed thanks to murky provisions.

Donald Trump's Proposals Would Hurt Social Security’s Finances, Analysis Finds

Arthur Delaney
Mon, October 21, 2024

The popular Social Security retirement insurance program would run out of money faster if Congress adopted policies promoted by former President Donald Trump, according to a new analysis by an authoritative budget group.

Despite Trump’s promise to protect Social Security, his proposals to cut tax breaks on tips and overtime pay, among other things, would “dramatically worsen” Social Security’s financial position, the Committee for a Responsible Federal Budget said Monday.

“Social Security will be only nine years away from insolvency when the next President takes office,” the CRFB said on its website. “If President Trump’s campaign agenda were enacted in full, we estimate it would shrink that window by one-third, to only six years.”

Social Security’s trust fund has enough money to pay full benefits until 2034, according to the Congressional Budget Office, at which point incoming revenue from payroll taxes would cover only 83% of benefits. The Committee for a Responsible Federal Budget, which opposes large budget deficits, said Trump’s various proposals would hasten the fund’s depletion to 2031.

The harm to Social Security’s finances under Trump’s agenda results from a combination of proposals, some directly related to Social Security, and others not.

Trump’s idea to cut taxes on tipped income, overtime pay and Social Security benefits, for instance, takes away money that funds benefits. Those proposals would reduce funding by as much as $2 trillion over a decade, per the CRFB.

Trump’s proposals for tariffs on imported goods, plus mass deportation of undocumented immigrants, meanwhile, could reduce trust fund revenue by as much as $750 billion. The former policy would impact Social Security by boosting inflation, thereby forcing Social Security to speed up its annual cost-of-living adjustments. Mass deportations would reduce the number of workers paying into the program.

The former president often claims immigrants are a drain on Social Security, but they help the program’s finances by contributing through automatic payroll deductions even when they are ineligible to receive benefits in the future.

Trump has steered the Republican Party away from its past support of cutting Social Security benefits in order to improve the program’s finances, but his ad hoc campaign promises to cut taxes for various voter groups would make it more difficult to balance the program’s projected revenue and spending. Trump has said he would close the gap with faster economic growth, which is a dubious proposition, while Democrats have suggested improving Social Security solvency entirely through taxes on higher earners.

“The so-called experts at CRFB have been consistently wrong throughout the years,” Trump campaign press secretary Karoline Leavitt said in an emailed statement, without pointing to examples of CRFB being wrong.

“The only candidate who poses a threat to the solvency of Social Security is dangerously liberal Kamala Harris — whose mass invasion of millions of illegal aliens will, if they are allowed to stay, cause Social Security to buckle and collapse,” Leavitt said. “By unleashing American energy, slashing job-killing regulations, and adopting pro-growth America First tax and trade policies, President Trump will quickly rebuild the greatest economy in history and put Social Security on a stronger footing for generations to come, all the while eliminating taxes on Social Security for America’s well-deserving seniors.”
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Report: Trump's plans could force Social Security benefit cuts in 6 years
Todd Spangler, Detroit Free Press
Updated Mon, October 21, 2024 at 6:18 PM MDT·5 min read
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A new report by a nonpartisan budget organization in Washington concluded Monday that while neither Democratic Vice President Kamala Harris' or Republican former President Donald Trump's plans would address Social Security's looming insolvency, Trump's would "dramatically worsen" the social safety net program's finances.

The Committee for a Responsible Federal Budget issued an analysis reported in the Washington Post that indicated that Trump's sweeping campaign promises of tax cuts on tips, overtime and Social Security benefits, along with higher prices caused by tariffs and mass deportation efforts he has said he would order would put Social Security in a position of becoming insolvent in as short a time as six years and requiring benefits to be cut by a third if enacted.

Harris' plans, on the other hand, which also include cutting taxes on tips, increasing border security and extending some parts of the 2017 tax cuts would "likely expand Social Security’s deficits," the report said, but proposed minimum wage increases and other measures could boost payroll tax collections. "On net, these changes are likely to modestly increase ten-year deficits and advance insolvency by several weeks or months," the report said in a footnote.

The group, which was founded more than 40 years ago to address and research fiscal policy, has a long history of bipartisan involvement and its current co-chairs include former Indiana Gov. Mitch Daniels, a Republican, and former Defense Secretary Leon Panetta, a Democrat.

The analysis comes near the end of a fractious campaign between Harris and Trump, with Michigan a key battleground state where polling shows them effectively tied. Both candidates have promised to protect Social Security's finances but neither has put forward a specific plan for staving off the social safety net's insolvency.

More: Silent mic, 'Black girl magic', crying baby: 1 day in Michigan as Trump, Harris woo it

The Congressional Budget Office (CBO), in testimony provided to Congress, has estimated that under current payroll tax revenues and expected benefit payments, the Old Age and Survivors Insurance trust fund, which pays out to retirees, would likely see benefits cut by 25% beginning in 2034 because of a shortfall and the Disability Insurance trust fund would see benefits cut by 13% in 2065. If the two were combined — which is not allowed under current law but could be to shore up a shortfall — estimated revenues will equal 77% of scheduled payments in 2035, requiring benefits to be reduced by 23% absent an increase in payroll taxes, the CBO said.

The Committee for a Responsible Federal Budget report found that while Harris' proposals would have a negligible effect on that prediction, Trump's would exacerbate it, cutting the time of predicted insolvency for a combined program from fiscal year 2034 to FY 2031 or 2032.

"Upon insolvency, the law calls for limiting Social Security spending to its revenue stream, which we've previously estimated would mean a $16,500 cut in annual benefits for a typical dual-income couple retiring in 2033. CBO estimates that benefits would have to be cut by 23% by 2035 under current law," the analysis said. "Under President Trump's agenda, we estimate that benefit cut would total 33% by 2035, with a range of 29% to 36% depending on the scenario."

The analysis relied on the group's other estimates of the effects of both Harris' and Trump's economic proposals and what they would mean if fully implemented. Those estimates, which included a range of potential outcomes, concluded that Harris' plan could be anywhere from deficit neutral over a decade to worsening it by up to $8.1 trillion, with a central estimate of costing $3.5 trillion.

Trump's plans, the group said, would cost at least $1.45 trillion on the low end and up to $15.15 trillion over a decade, with a central estimate of $7.5 trillion.

In the current analysis, the Committee for a Responsible Federal Budget said ending taxation of Social Security benefits, as Trump has proposed, will remove as much as $950 billion in revenue from the program over a decade, and ending taxes on tips and overtime wages could deny it more than $1 trillion. It also concluded that tariffs promoted by Trump as a way to cut imports and spur manufacturing in the U.S. but which most economists say would increase costs on Americans, as well as plans for a mass deportation of immigrants in the country illegally, could cost the program as much as $750 billion over 10 years.

Workers in the country illegally cannot collect Social Security benefits but still pay billions in payroll taxes, including those that go into bolstering Social Security.

Social Security, while doling out benefits to retirees, their families and disabled workers, is paid for through a trust fund supported largely by current payroll tax collection, not merely those that workers contributed while they were employed. Under the law, if revenues were to fall short of benefits, benefits would have to be reduced unless additional revenue, through taxes or other means, were added to the trust funds.

There were some 2.3 million Social Security beneficiaries living in Michigan as of December 2023.

Responding to the report, Trump Campaign National Press Secretary Karoline Leavitt maintained Trump protected Social Security during his previous term. "By unleashing American energy, slashing job-killing regulations and adopting pro-growth America First tax and trade policies, President Trump will quickly rebuild the greatest economy in history and put Social Security on a stronger footing for generations to come," she said.

Trump, however, also saw historic job losses due to the COVID-19 shutdowns at the end of that term, while Democratic President Joe Biden's tenure has seen some 16 million new jobs created, though there was a period of particularly high inflation for much of that time that offset wage gains. As for the Social Security trust funds, CBO estimated they would be exhausted in 2030 in 2017, Trump's first year in office; that moved only a year out, to 2031, in his last year in office in 2020.

“Donald Trump’s agenda poses an imminent threat to Social Security, and seniors could have their benefits cut by a third," said Joseph Costello, a spokesman for the Harris campaign. "This is yet another reason that Americans simply cannot afford the risk of another Trump term."

Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler.

This story has been updated to add new information.

This article originally appeared on Detroit Free Press: Report: Trump's plans could force Social Security cuts in 6 years

Social Security funds could run out in 6 years under Trump plans: Analysis
Aris Folley
Mon, October 21, 2024 



Social Security’s trust fund reserves could be depleted as early as 2031 under former President Trump’s proposals, several years earlier than recent projections, according to an analysis from the Committee for a Responsible Federal Budget (CRFB).

In an analysis published Monday, the fiscal watchdog weighed the impact several Trump proposals — including his plan to end taxation of Social Security benefits, scrap taxes on tips and overtime, impose new tariffs and expand deportations — would have on Social Security’s finances over the coming years, were he to return to the White House and implement them.

The combined trust funds for Social Security retirement and disability benefits are currently projected by the program’s trustees to run out in 2035, a year later than previously expected, after economic growth exceeded expectations last year.

But under Trump’s proposals, the CRFB estimated funds could run out by 2031 while increasing Social Security’s cash deficit $2.3 trillion between fiscal 2026 and fiscal 2035.

In a closer look at the price tag, the CRFB said its central estimate found the biggest cost stemmed from Trump’s proposal to do away with taxation of Social Security benefits — a move that would cost $950 billion.

The next big-ticket item, ending payroll taxes on tips and overtime pay, would cost about $900 billion, while proposed changes on tariffs and immigration could add $400 billion to Social Security’s cash deficit.

Ending taxes on tips and overtime pay would lead to a reduction in “payroll tax collection accruing to the Social Security trust funds,” and imposing large tariffs on imports could “either increase cost-of-living adjustments (COLAs) through higher inflation or reduce taxable payroll,” the analysis stated.

The CRFB also said expanding deportations could lead to fewer “immigrant workers paying into the Social Security trust funds.”

Trump’s campaign slammed the analysis in a statement Monday.

“The so-called experts at CRFB have been consistently wrong throughout the years. President Trump delivered on his promise to protect Social Security in his first term, and President Trump will continue to strongly protect Social Security in his second term,” Trump campaign national press secretary Karoline Leavitt said in a statement, while instead pointing the finger at Vice President Harris, saying immigration under her agenda “would cause Social Security to buckle and collapse.”

The CRFB said Harris’s plans to increase border security and extend some parts of Trump’s signature 2017 tax law could “expand Social Security’s deficits by reducing revenue collection from payroll taxes and taxation of benefits.” But the group said her campaign’s proposal overall would not “have large effects on Social Security trust fund solvency.”

“At the same time, increases in the minimum wage and various tax compliance measures would likely reduce Social Security’s deficits by boosting payroll tax collection,” the CRFB said. “On net, these changes are likely to modestly increase ten-year deficits and advance insolvency by several weeks or months.”

The watchdog additionally forecast potentially bigger cuts to benefits upon insolvency under Trump’s proposals than under current law. The group estimated a 33 percent cut to benefits after tax for roughly half of beneficiaries under Trump’s plans, compared to 23 percent under current law.

“But they would be cut by closer to 30 percent for the seniors with just enough income to be paying taxes on benefits, 26 percent for a household with income in retirement at about $100,000 per year, and 3 percent for the very highest income households,” the group said while assessing the potential impact of Trump’s proposed policies thus far.

Trump has said on the campaign trail that he will not “cut one cent from Social Security.” But experts say that lawmakers will likely need to find common ground on hiking taxes or reducing benefits, or both, to prevent across-the-board benefits cuts if the program goes insolvent in the years ahead.

“Restoring solvency over the next 75 years would require the equivalent of reducing all future benefits by 24 percent or increasing revenue by 35 percent,” the CRFB said in its analysis.

Recent scoring from the group on Trump’s previous Medicare proposals have been more favorable for the former president, however. A CRFB analysis looking at his last budget proposal as president found the proposals offered at the time would have “strengthened” Medicare’s fiscal position and “modestly slowed” its cost growth.

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Trump's policies would jeopardize Social Security, report finds. 'Beyond irresponsible,' says one expert.

The Committee for a Responsible Federal Budget says Donald Trump's proposed tariffs, tax cuts, and deportations would run the program dry earlier than expected.

Janna Herron
·Senior Columnist
Updated Mon, October 21, 2024 

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Seniors would face heftier cuts to their Social Security benefits sooner than expected if Donald Trump wins the presidential election and his campaign promises are implemented, a new analysis found.

The reserve fund for Social Security would run empty by 2031 instead of the current estimate of 2034 if Trump's tax breaks, tariffs, and mass deportations are imposed, according to a new report from the Committee for a Responsible Federal Budget (CRFB).

At that time, Social Security benefits would be cut by 30% to 31%, reaching 33% by 2035. If Social Security remains on the current trajectory, the reduction would be 23% by 2035.

"Social Security is nine years from insolvency, and neither campaign has a plan to solve it," said Marc Goldwein, a senior policy director for CRFB, a nonpartisan public policy organization. "But President Trump's plans would make it much, much worse."


Though not considered in this report, Goldwein also added that the policies would hurt Medicare's funding as well. Payroll taxes, specifically FICA taxes, fund both Social Security and Medicare.

While there are real questions if all these policies would be enacted should Trump win a second term, simply adding to existing concerns over Social Security's solvency could be enough to drive people to make poorer financial decisions.

"It’s beyond irresponsible, toying with people’s retirement," Laurence Kotlikoff, a professor of economics at Boston University and an expert on Social Security. "We already have too many people taking benefits too early, forfeiting hundreds of thousands of dollars in benefits."

Read more: Do you pay taxes on Social Security?

'They're paying into the Social Security program'

The report considered Trump's promises to get rid of taxes on Social Security benefits, tips, and overtime as well as his vow to deport undocumented immigrants and impose a 10% to 20% tariff on imported goods and a 60% tariff on Chinese goods.

By not taxing Social Security benefits — which directly go to Social Security and Medicare Trust Funds — Social Security would lose $950 billion, the analysis found.

Another $900 billion would be lost to the elimination of taxes on overtime and tips, the former of which is subject to FICA taxes and the latter must be reported at tax time.

The tariffs and deportations would reduce the money going to Social Security by $400 billion. In total, that's $2.25 trillion less than would be collected under current law.

Goldwein noted that tariffs increase Social Security spending because tariffs increase prices, boosting inflation. Benefits are indexed to inflation, so they would also increase with consumer prices. The Social Security Administration would then have to pay out more in benefits.

Undocumented immigrants also add to Social Security's coffers, Goldwein said.

"The vast majority of undocumented immigrants are of working age. Many of them work in jobs where they pay taxes either because they gain some legal status after they've gotten here, or they write down a random Social Security number," he said.

"Either way, they're paying into the Social Security program."

In fact, the Congressional Budget Office estimated that the recent surge in immigrants is expected to bring in $348 billion in Social Security taxes over the 2024–2034 period. The CRFB report assumes this would be reduced to $100 billion to $150 billion under Trump's immigration policies.

Republican presidential nominee Donald Trump delivers remarks on the damage and federal response to Hurricane Helene on Oct. 21 in Swannanoa, N.C. (AP Photo/Evan Vucci)

Another domino?

While the report only focuses on Social Security, Medicare would also be threatened, said Goldwein, who noted that he might do an additional analysis on that.

Right now, the reserves that Medicare uses for hospital coverage — known as Medicare Part A — are expected to run out in 2036. Eliminating just the taxes on Social Security benefits would move up that date to 2030.

Add in the other tax breaks, tariffs, and deportations, and "those extra should make it even more severe," Goldwein said. "Medicare would likely be insolvent before 2030 under these proposals."

The Medicare trustees have previously said the fund's insolvency could first cause delays in payments to health plans and hospitals. Additionally, seniors' "access to healthcare services could rapidly be curtailed."

The real-life consequences

The severity of Social Security cuts would differ by income. The report found that about half of beneficiaries would see the full 33% cut — typically those with lower incomes who don't pay taxes on benefits now. In 2024, an individual with income below $25,000 does not have to pay taxes on their benefits. That amount is $32,000 for a married couple filing jointly.

Seniors with just enough income to pay taxes would see a 30% cut to their benefits, while those with $100,000 in annual income in retirement would experience a 26% reduction. The very highest income retirees would only see a 3% nick off their benefits.

The cuts are regressive partly because the tax on Social Security benefits is progressive, meaning people are taxed more if they have higher incomes. Those with the top incomes would see a tax break that would largely offset the cut in their benefits.

"Those who are impacted, the majority of them are in the middle class," said Emmanuel Eliason, a certified financial planner in Centennial, Colo. "So less money in the pocket means that their lifestyle may have to be adjusted."

Read more: How to find out your 2025 Social Security COLA increase

The reserve fund for Social Security would run empty by 2031 instead of the current estimate of 2034 if Donald Trump's tax breaks, tariffs, and mass deportations are imposed, new report shows. (AP Foto/Jenny Kane, Archivo)

For those who rely on Social Security for the majority of their income, a cut like this could be devastating, said Monica Dwyer, senior vice president at Harvest Financial Advisors in West Chester, Ohio.

"It will increase the need for government aid such as affordable housing, Medicaid, and other social services, and it will likely mean more homelessness than we have ever seen," she said.

Just the threat of steeper Social Security reductions could hurt people's financial planning.

A survey last year from asset management company Schroders found that the top reason workers said they plan to take benefits before 70 is because they're concerned Social Security could stop paying out before they reach that age.

But if they wait until 70, their benefits would be larger — 8% more every year past full retirement age. Many experts encourage people to wait as long as possible to claim to get the bigger benefit.

"Sometimes the fear about whether Social Security is going to be available encourages people to make bad Social Security decisions," Dwyer said. "I am very concerned that [the effect of Trump's proposals] will make people’s irrational thinking worse."

Janna Herron is a Senior Columnist at Yahoo Finance. Follow her on X @JannaHerron.


Donald Trump's plans would drain Social Security years earlier than expected, report says

William Gavin
Mon, October 21, 2024 

Former President and Republican presidential nominee Donald Trump - Photo: Win McNamee (Getty Images)

Former President Donald Trump’s plans to slash taxes are expected to “dramatically” weaken Social Security’s finances — and make the program insolvent three years ahead of schedule.

The Social Security Administration (SSA), the government agency that administers the program’s benefits to Americans, expects its coffers to be depleted by 2035, according to a May report. But proposals Trump has made on the campaign trail would exhaust Social Security by 2031 or 2032 at the latest, according to a report released Monday by the nonpartisan Committee for a Responsible Federal Budget (CRFB).

As of 2024, almost 68 million Americans receive a check from the SSA each month. The vast majority of those people are at least 65 years old and many depend entirely on the program for income after retiring, the National Institution on Retirement Security found in 2020.

“SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!” the Republican presidential nominee wrote in July on his social media platform, Truth Social.

Recipients of benefits must pay federal income taxes if their combined income is higher than $25,000 each year if they file individually, or $32,000 for joint filers. That revenue helps helps fund the Social Security and Medicare Hospital Insurance trust funds.

Without that funding — combined with the many other tax cuts Trump has proposed — and the former president’s plans to impose massive tariffs and deport unauthorized immigrants, Social Security’s funding will be cut by as much as $2.75 trillion.

Ending taxation of Social Security benefits alone could cut between $850 billion and $950 billion from its cash reserves, while ending taxes on overtime pay and tips would slash anywhere between $150 billion and $1.05 trillion. Heavily restricting immigration and imposing tariffs would reduce the balance by between $300 billion and $750 billion, according to the CRFB.

After Social Security is insolvent, the program’s spending would be limited and likely result in a $16,500 cut in annual benefits for the typical dual-income couple retiring in 2033, the CRFB said.

Under current laws, benefits would have to be cut by 23% by 2035, according to the Congressional Budget office. Trump’s plans would raise that benefit cut to 33% by 2035, according to the CRFB. Although, some beneficiaries would likely see their real after-tax benefits cut by smaller percentages.

In the past, Trump has said he will “not cut one cent” from the program, nor will he change the retirement age. In a town hall last year, he proposed taking advantage of the “incredible wealth under our feet” by drilling for more oil and natural gas to grow the economy. However, that would cover less than 4% of Social Security’s shortfall, the CRFB said last year, noting that opening up “all federal land” to drilling couldn’t solve that problem.

Joe Biden Has Called for Social Security Benefit Cuts 2 Times
By Sean Williams – Sep 17, 2022 - Motley Fool

KEY POINTS

The vast majority of Americans are, or will be, reliant on Social Security income during their golden years.

On two previous occasions, Biden has offered suggestions to strengthen Social Security that would ultimately reduce benefits.

However, Biden's current four-point proposal to "fix" Social Security doesn't cut monthly payouts.

Tough choices will need to be made to tackle Social Security's estimated $20.4 trillion cash shortfall over the next 75 years -- and President Biden knows it.

For most Americans, Social Security is, or will become, a vital source of income during retirement. According to surveys conducted by national pollster Gallup, nearly 90% of current retirees lean on their Social Security income to make ends meet. Additionally, 84% of nonretirees expect to rely on Social Security as a "major" or "minor" source of income during their golden years.

But even though it's been our nation's most successful retirement program for more than eight decades, Social Security finds itself in some pretty serious financial trouble. According to the 2022 Social Security Board of Trustees Report, the program is facing a jaw-dropping $20.4 trillion cash shortfall over the next 75 years. While this doesn't mean Social Security is insolvent -- the program, thankfully, can't go bankrupt as long as Americans continue working -- it does portend the growing likelihood of steep benefit cuts on the not-too-distant horizon if nothing changes.

Social Security needs to be "fixed" so it can thrive for many more generations, and that means making the hard decision to collect more revenue, cut benefits, or enact some combination of the two.

While most lawmakers have shied away from directly calling for Social Security benefits to be cut, President Joe Biden has previously done so on two separate occasions.

1. Biden leaves the door open to raise the full retirement age

Speaking in a very broad sense, Biden's political party (Democrat) prefers to raise additional revenue for Social Security by increasing the payroll tax paid by high-earning workers. But every once in a while, we see prominent lawmakers break with their party on key issues, which is exactly what happened when Joe Biden was a presidential candidate for the 2008 ticket.

In September 2007, Biden released a plan that was, among other things, designed to shore up Social Security. Keep in mind that lawmakers have known since the 1985 Board of Trustees Report that Social Security wasn't on track to bring in enough revenue over the next 75 years to cover its projected payouts. Although this plan called for an increase to the maximum taxable earnings cap on high earners, Biden was also open to discussing bipartisan options, such as raising the full retirement age.

The full retirement age is the age at which a beneficiary becomes eligible to receive 100% of their retired worker benefit. For roughly six decades after the first Social Security check went out in 1940, the full retirement age stood pat at 65. But following two rounds of gradual increases, everyone born in 1960 and later has a full retirement age of 67.

Raising the full retirement age, which is a core solution touted by Republicans, would require eligible beneficiaries to wait longer to receive their full monthly payout. Regardless of whether retired workers choose to take their payout early -- therefore accepting a permanently reduced monthly benefit -- or wait until full retirement age, increasing the full retirement age would lower the lifetime benefits paid to a retired worker.

2. Joe Biden calls for means-testing

The second time President Biden called for Social Security benefit cuts happened more recently.

In May 2018, nearly a full year before declaring his candidacy for president, Biden advocated for benefits means-testing while speaking at a Brookings Institution event. Said Biden:

Paul Ryan [the former Republican speaker of the house] was correct when he did the tax code. What's the first thing he decided we had to go after? Social Security and Medicare. Now, we need to do something about Social Security and Medicare. That's the only way you can find room to pay for it. Now, I don't know a whole lot of people in the top one-tenth of 1% or top 1% [who] are relying on Social Security when they retire.

While Biden's remarks primarily emphasize the need to progressively increase payroll taxation on high earners, they also alluded to the idea of means-testing for benefits.

Means-testing would involve partially or fully removing Social Security payouts to eligible recipients based on predefined annual income thresholds. In other words, it would ensure that individuals and couples who don't need Social Security benefits to live comfortably would receive a reduced payout, or perhaps none at all. Even though this would only affect a small percentage of beneficiaries, it's nevertheless a call for benefits to be cut.


President Biden's four-point Social Security plan is a long shot to pass

The thing about our elected officials is that their views on policy tend to change over time. That's the case with President Biden, whose four-point plan to strengthen Social Security -- this plan was laid out during his campaign -- makes no mention of reducing or cutting Social Security benefits.

In no particular order, here are the four Social Security changes Biden now advocates:

Increase payroll taxation on high earners: In 2022, all earned income between $0.01 and $147,000 is subject to Social Security's 12.4% payroll tax. However, well over $1 trillion in wages and salary above $147,000 is exempted from this tax. Biden has proposed creating a doughnut hole between the current payroll tax cap and $400,000 where earned income would remain exempt. Meanwhile, the payroll tax would be reinstated on all wages and salary above $400,000 to generate more revenue for Social Security.

Boost the special minimum benefit: Biden advocates increasing the minimum monthly payout to lifetime low-earners to 125% of the federal poverty level. If this proposal were law in 2022, it would mean a special minimum benefit of $1,416/month instead of $951 for a lifetime low-earner with 30 years of coverage.

Lift benefits for long-lived Social Security recipients: Biden's plan calls for the primary insurance amount (PIA) to be increased by 1% annually from ages 78 through 82, which would equate to a 5% aggregate lift to the PIA. This proposed benefit increase is designed to help aged beneficiaries cover higher expenses as they age, such as medical transportation costs.

Switch the inflationary tether to the CPI-E from CPI-W:

 Lastly, Biden has called for the Consumer Price Index for the Elderly (CPI-E) to become Social Security's new inflationary measure. Though the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) has been the program's inflationary tether since 1975, it doesn't do a particularly good job of tracking the expenditures that matter most to seniors.

While these proposals have the potential to strengthen Social Security, Biden's plan doesn't have anywhere near the number of votes (60) that would be needed to amend Social Security in the Senate.

The conundrum of Social Security reform is that both of America's political parties have a working solution, which means neither is willing to cede an inch and find common ground with their opposition. Without cooperation on Capitol Hill and from the Oval Office, Social Security appears destined to spiral toward what could be a sizable benefit cut in as little as 12 years.

Social Security: 4 Big Changes Biden Wants to Make for Retirees

By Katie Brockman – Sep 17, 2022 - Motley Fool

KEY POINTS
Social Security is an important source of income for millions of retirees.

While none of these proposals are law just yet, they could have a significant impact on seniors.

Major changes could be coming to Social Security.

It's getting more difficult for seniors to live on Social Security, especially as inflation continues to surge. For years, lawmakers have been debating various proposals to improve Social Security for retirees.

While none of these laws have been implemented yet, President Biden has big plans for Social Security. Here are four of the most significant changes he's proposing.

1. Find a better way to measure inflation

Most years, seniors will receive a cost-of-living adjustment (COLA) that's designed to help Social Security keep up with inflation. Historically, though, COLAs have done a poor job of that. Since 2000, benefits have lost around 40% of their buying power, according to the Senior Citizens League.

This is partly because the annual COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). That data examines the spending patterns of workers under the age of 62, which can be vastly different from the spending habits of retirees.

To solve this problem, President Biden and other lawmakers have proposed using the Consumer Price Index for the Elderly (CPI-E) to calculate annual COLAs instead. This metric is more aligned with how seniors actually spend, which could make it easier for benefits to keep up with inflation.

2. Increase taxes for wealthy Americans

Along with inflation struggles, Social Security is also facing a cash flow problem. It's currently paying out more money in benefits than it's receiving in taxes. As a result, benefits could potentially face cuts of up to 20% by 2035.

The only way to avoid cuts is to increase funding to the program. Biden has proposed increasing payroll taxes for those earning more than $400,000 per year.

Currently, income up to $147,000 per year is subject to Social Security taxes. That wouldn't change under Biden's plan. Those earning between $147,000 per year and $400,000 per year would not see a tax increase. But if you're earning more than $400,000 per year, you would need to pay Social Security taxes on that income.

This proposal would increase Social Security's funding significantly and could go a long way toward preventing future cuts. It's also one of the most likely plans to pass in Congress, as around 81% of Americans across both political parties are in favor of it, according to a 2022 survey from the University of Maryland.

3. Boost benefits for older retirees

Another proposal in the works is an increase in benefits for those who are age 80 or older. Not only will this help older adults maintain buying power, but it will also provide a boost for retirees who are running low on savings. While nothing is set in stone, this plan proposes increasing benefits by around 5%.

This is one of Washington's more divisive proposals, as only 53% of Republicans and 56% of Democrats are in favor of it, according to the University of Maryland. But if it were to pass, it could provide much-needed relief for older retirees.

4. Increase the minimum benefit amount

Finally, President Biden has proposed increasing the minimum benefit amount from $951 per month to $1,341 per month for those who have worked at least 30 years. This plan would increase Social Security's cash shortage by around 7%, according to the University of Maryland. For the millions of seniors who depend on Social Security to make ends meet, though, a few extra hundred dollars per month could go a long way.

None of these plans have passed in Congress just yet. But if they do become law, they could bring major changes to Social Security in the coming years and make retirement more affordable.

Let's Be Clear: Social Security Is Not Adding a Penny to US Debt

All those charts and narratives ascribing Social Security the top spender of federal monies—and, thereby, implying the prime cause of the U.S. debt—need debunking.


A woman walks into a Social Security office in Houston, Texas on July 13, 2022.
(Photo by Mark Felix for The Washington Post via Getty Images)

FREDERIC H. DECKER
Mar 05, 2023

Common Dreams

The narrative that Social Security eats up government revenue, driving the federal debt upward, is deeply entrenched in the Republican Party’s psyche. Former-Vice President Mike Pence insinuated such February during a private meeting with business leaders when promoting the age-old Republican wish to privatize Social Security. So maybe Social Security won’t be off the table, as GOP leaders earlier promised, as the current debate over the debt ceiling unfolds.

The public has favored shoring up Social Security with more taxes. But, also, concern over federal deficits has increased among both Republican-leaners and Democratic-leaners. Concern over deficits translates into concern over the debt. Consequently, debunking the myth Social Security feeds the debt seems an inherent requirement in gaining support for progressive proposals to reform Social Security. That, in addition to outlining how cutting benefits unduly inflicts harm within the aging population.

Now consider all those misleading charts. Those charts showing Social Security the top spender of federal monies surely don’t help foster favorable public opinion or keep the GOP benefit-cutting hatchet in the sheath. Nor do stories like that February 9 on PBS Newshour when a segment on Medicare and Social Security closed with this on the screen: "Almost a third of federal spending this fiscal year is expected to go toward Medicare and Social Security." PBS Newshour (which I support and watch regularly) is not alone, of course; the spending attributed to Social Security and other social programs is a recurrent theme during this debt-ceiling news cycle. Even the Treasury Department on one website has, at the time of this writing, a bar chart with Social Security the top bar consuming 19 percent of all spending.

Busting the debt myth can start with a report from the Government Accountability Office where stated how for years the Social Security program “built up reserves” from revenue collected that “were invested in federal government securities, reducing the amount that must be borrowed from the public,” including from other countries, to cover federal deficits. (By law surplus funds in Social Security have to be invested in government securities.)

Surpluses were possible, of course, given Social Security is largely funded by its separate payroll tax. Not totally by general revenue as likely some surmise, or haven’t considered questioning, from those typical charts on federal spending.

And, relatedly, not enough is made of this fact: Today, Social Security (formally, the “Federal Old-Age and Survivors Insurance [OASI] Trust Fund”) actually owns more U.S. debt, $2.7 trillion in Treasury securities, than the top two foreign governments, Japan with securities valuing $1.1 trillion and China with under $1 trillion.

It is true Social Security’s dedicated revenue in 2021 was not alone sufficient to cover benefits paid, as detailed in a recent report by the Social Security Board of Trustees. Although, it was sufficient in the preceding year with additional securities purchased then. But in 2021, the government had to reconcile payment for OASI-owned federal securities cashed in to cover that year’s shortfall. Put differently, installment payments on the loan from Social Security came due. This, admittedly, entailed some additional spending of general revenue. But not in sums making the program a major debt maker, particularly not relative to the deficit amounts caused by tax cuts during the Trump administration.

As outlined in the Trustees’ report (Table II.B1, page 7), $838.2 billion from Social Security’s separate payroll tax covered 84 percent of the $1,001.9 billion in operational costs during 2021. The other revenue sources were the routine interest paid on securities owned, the income tax on Social Security benefits, and $59.1 billion collected from the liquidation of some securities—a liquidation representing a small percent of the 2021 deficit. Granted, the deficit grew in 2021 to nearly $3,000 billion partly from Covid spending, but even if using for illustrative purposes the 2019 deficit amount of around $1,000 billion, the $59.1 billion would only have represented 6 percent of that deficit.

Shortfalls are now predicted to happen regularly each year whereby reserves (that is, owned securities) in the OASI trust likely will be depleted by 2034 if no reforms. Then only an estimated 77 percent of benefits due would be payable. But annual payments on securities cashed in isn’t á priori a dominant driver of deficits and debt, as the preceding paragraph reveals.

Aside from erroneously blaming Social Security for deficits swelling the debt, there is also a related and persistent argument that cutting benefits via raising the retirement age to 70 is necessary to control expenditures given the increasing life expectancy over the decades. But issues around life expectancy, ironically, actually contribute to disproportionate harm incurred by raising the retirement age again. Yes again, since a 1983 law increased the age from 65 to eventually 67.

Research has shown those of lesser means have experienced smaller improvements in mortality over the years. Conceivably, as life expectancy declined during the Covid-19 pandemic, this discrepancy was magnified. In any case, what is known according to the Congressional Research Service is raising the retirement age to reduce costs “would [because of their lower overall life expectancy] affect low earners disproportionately (i.e., reductions in their lifetime Social Security benefits would be considerably larger than for high earners).” By the way, privatization of Social Security would also disproportionately harm the well-being in retirement years of those with lesser means.

Research by the Social Security Administration also revealed that a sizable portion of those retiring before the full retirement age had health problems impairing the ability to work. And these early retirees more likely worked in physically demanding blue-collar occupations. This and other studies led the Congressional Research Service to observe that “early retirees who have work-related health impairment…would be disadvantaged” by an increased retirement age, which worth noting they also were by the earlier increase legislated in 1983.

Cutting benefits, in general, subverts the intended purpose of Social Security. And justification for cutting benefits is partly based upon the faulty claim Social Security continually increases the debt, ignoring most expenditures on the program do not entail general revenue. If only charts on federal spending demarcated expenditures on programs by revenue type. The one on general revenue only would show a percentage attributed to Social Security considerably less than advertised in the all-inclusive charts today.Essentially, the Social Security program has not contributed in any markedly way to the totality of deficits and associated debt. Rather, paradoxically, the program has historically loaned the government monies to cover the debt and, thereby, help pay for other federal programs. So, don’t blame Social Security for the sum of existing debt today accumulated over the years.

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

FREDERIC H. DECKER is a Maryland-based sociologist and, today, an active writer with commentary appearing across local newspapers nationally. He earned his Ph.D. at Florida State University.

ALWAYS READ THE FINE PRINT
House Democrats urged to remove ‘insidious attack’ on Social Security hidden within senate coronavirus bill

March 26, 2020 By Jake Johnson, Common Dreams


“The only way to escape this trap is to avoid stepping into it in the first place. That’s why the House must remove the cut to Social Security’s dedicated funding before this bill passes.”

Progressives are demanding that the Democrat-controlled House of Representatives prioritize removing a little-noticed provision in the massive Senate-passed coronavirus stimulus bill that would allow employers to stop paying into Social Security for at least the rest of the year—potentially threatening the program’s long-term financial health.

“If Trump and Republicans retain power after November’s elections, they will make sure that corporations never repay Social Security.”
—Michael Phelan, Social Security Works

Section 2302 of the nearly 900-page legislation would let companies defer until next year their payment of the employer payroll tax, one of the primary funding mechanisms for Social Security. The bill would require that companies pay 50% of their owed 2020 payroll taxes by December 31, 2021.

While the section has thus far received little media attention, advocacy group Social Security Works said the language authorizes an “insidious attack” on the New Deal-era program and must be stripped out before final passage.

The House is expected to vote on the bill as early as Friday.

“The Democrats are walking right into the trap,” Michael Phelan, deputy director of Social Security Works, warned in an email Wednesday night ahead of the Senate vote. “If Trump and Republicans retain power after November’s elections, they will make sure that corporations never repay Social Security. Then, Republicans will use the reduced trust fund as an excuse to destroy our Social Security system.”

“The only way to escape this trap is to avoid stepping into it in the first place,” said Phelan. “That’s why the House must remove the cut to Social Security’s dedicated funding before this bill passes.”

Social Security Works urged the public to call their representatives and pressure them to remove the employer payroll tax deferral:

The Senate bill would let corporations stop paying into Social Security for the rest of the year. But the House can still fix it.

Call your Rep. at 202-224-3121 TODAY. Tell them:
1. Remove the cut to Social Security’s funding
2. Increase Social Security benefits by $200/month
— SocialSecurityWorks (@SSWorks) March 25, 2020

In a letter to senators last week, Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, denounced the proposal to defer employer payroll taxes as a serious threat to “Social Security’s ability to pay future benefits to 64 million Americans.”

“Social Security is an earned benefit fully funded by the contributions of workers throughout their working lives,” said Richtman. “A payroll tax suspension or deferral chips away at that fundamental idea, making it easier each time it is enacted to turn to it again to meet some future crisis, until the payroll tax is permanently eliminated.”

Linda Benesch, communications director for Social Security Works, told Common Dreams Thursday that whether or not the attack on Social Security is stripped from the Senate bill, the group plans to fight alongside its allies in the Congressional Progressive Caucus to ensure that an expansion of Social Security benefits is included in an expected fourth stimulus package.

Social Security Works president Nancy Altman last week called on Congress to adopt a proposal introduced by Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Senate Minority Leader Chuck Schumer (D-N.Y.) that would increase by $200 the monthly Social Security benefit for all recipients through the end of 2021.

“This will help beneficiaries afford housing, food, medicines, and other vital needs during this challenging time,” said Altman. “As a byproduct, it showcases Social Security’s efficiency and reach, which are so needed in this moment.”

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Trump is using the coronavirus crisis to to launch a stealth attack on Social Security


March 11, 2020 By Nancy J. Altman, Independent Media Institute- Commentary


Donald Trump’s proposal to cut the payroll contribution rate is a stealth attack on Social Security. Even if the proposal were to replace Social Security’s dedicated revenue with deficit-funded general revenue, the proposal would undermine this vital program.

The proposal is a Trojan horse. It appears to be a gift, in the form of middle-class tax relief, but would, in the long run, lead to the destruction of working Americans’ fundamental economic security. While the goal of the proposal is stated in terms of fiscal stimulus, its most important impact, if not its intent, is to do what opponents of Social Security have been unable to do—end Social Security as we know it.

The supposed purpose of a reduction in payroll contributions is to address the coronavirus crisis. Tax cuts do not meaningfully address the coronavirus, or even the resulting market panic. We do want to ensure that people have the cash they need while they face massive uncertainties around employment and other costs. We want people to stay home as much as needed without having to worry about paying their rent or other costs. What we need most is a robust public health response, which the Trump administration is utterly failing to provide.

Alongside that vital public health response, there are better options for economic stimulus. These include a one-time progressively structured direct payment, restoring and expanding the Making Work Pay Tax Credit, or expanding the existing Earned Income Tax Credit and provide greater economic stimulus, are more targeted and equitable, and place no administrative burdens on employers. The only reason to support Trump’s proposal above those others is to undermine Social Security.

As revealed in this chart, cutting the payroll contribution rate is a deficient stimulus. Most of the benefit would go to the wealthiest Americans—including CEOs, senators, congresspeople, and members of the Trump administration—who are the least likely to spend the extra money. The other big winners are the nation’s largest corporations and other employers. The lower workers’ wages are, the lower their benefit. Moreover, those state and local employees who do not participate in Social Security would get nothing.

What Trump is proposing to cut, to be clear, are Federal Insurance Contributions Act payments. As the name indicates, these payments are not general taxes, but insurance contributions, or, in today’s parlance, insurance premiums. By law, they can only be used to pay Social Security insurance benefits and their associated administrative costs. Social Security has no borrowing authority. Consequently, Social Security does not and, by law, cannot, add even a penny to the deficit. If Social Security were ever to have insufficient revenue to cover every penny of these costs, those benefits would not be paid.

The late President Ronald Reagan eloquently explained, in his words, “Social Security has nothing to do with the deficit.” This proposal would change that, at least temporarily, if Social Security’s dedicated revenue were replaced with general revenue. (Of course, more accurately, the dedicated revenue would be replaced with borrowed money since the general fund is running unprecedently large deficits.)

The proposal would either undermine Social Security’s financing or employ general revenue, both of which would set the stage for future demands to cut Social Security. And it likely would not be temporary. When the cut would be set to expire, opponents of Social Security would undoubtedly characterize its expiration as a middle-class tax increase.

Too many Americans believe, understandably, that their Social Security contributions have been stolen. Using their contributions for economic stimulus would reveal that their elected officials indeed do not respect the fire wall between their contributions that are held in trust and can be used only for their dedicated purpose and the taxes they pay to the federal government that are held in the general fund and can be used for any constitutional purpose that Congress chooses.

On March 8, Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer released an excellent list of steps we should take to combat the coronavirus. Their plan includes paid sick leave, free coronavirus testing, and treatment for all. Our government should enact these measures, not undermine Social Security by slashing its dedicated revenue.

Nancy J. Altman is a writing fellow for Economy for All, a project of the Independent Media Institute. She has a 40-year background in the areas of Social Security and private pensions. She is president of Social Security Works and chair of the Strengthen Social Security coalition. Her latest book is The Truth About Social Security. She is also the author of The Battle for Social Security and co-author of Social Security Works!

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Why Billionaires Hate Social Security

The real goal of billionaire-funded Social Security rhetoric is to prevent the public from drawing a connection between Social Security’s finances, the working-class retirement crisis, and the ludicrous amounts of wealth held by America’s billionaires.

Stephen Schwarzman, co-founder and CEO of Blackstone, speaks at a summit on November 5, 2019 in Lisbon, Portugal.
(Photo: Horacio Villalobos/Corbis via Getty Images)

RICHARD ESKOW
Jun 08, 2023

Common Dreams

Consider the billionaire.

I’m not talking about people who were born into wealth; they have their own issues. Let us specifically consider the so-called “self-made” wealthy person, the driven CEO or investor. He (and it is almost always a “he” in our society) is likely to share some characteristics with other billionaires and members of his cohort. Social science and simple observation tell us that these powerful figures are more likely than other people to be:

●greedy

●addicted to making money (which is psychologically distinct from greed)

●obsessed with making money, which leads to bad behavior

●surprisingly worried about the money they have

●less empathetic and more self-interested than other people

●breakers of certain laws and social norms

●less charitable on a percentage basis

●very politically influential

●and, determined to cut Social Security.

About that last item: While there may be exceptions here and there, the billionaire class overall is overwhelmingly opposed to Social Security. Most wealthy people would, in fact, like to see its benefits slashed. A 2013 study compared the political opinions of the wealthy with those of voters as a whole and found “major disagreement” between the two groups regarding Social Security. Among all voters, there was a 46 percent gap in favor of expanding its benefits rather than cutting them. The wealthy had the opposite take; they favored cuts, rather than expansion, by a gap of 33 percent.

The tax question surely accounts for some of the billionaires’ antipathy toward Social Security but, even so, their feelings seem to run unusually high on the subject.

Strikingly, the richer someone was, the likelier they were to want Social Security cuts. Each additional $10 million in personal wealth added measurably to the desire for Social Security cuts. The authors note that “this finding may help explain why cutting these popular programs has remained on the political agenda.”

Ya thinks?

Billionaires pay for think tanks and news outlets which fill the airways with lurid talk about the program’s costs. Billionaires and corporate CEOS have more political influence than any other part of society. That’s why, despite the outcome of the recent ‘debt ceiling’ crisis, they still represent an existential threat to Social Security.
Distraction

The real goal of billionaire-funded Social Security rhetoric is to prevent the public from drawing a connection between Social Security’s finances, the working-class retirement crisis, and the ludicrous amounts of wealth held by America’s billionaires.

We are supposed to be horrified, for example, by the gap between Social Security’s income ($1.244 trillion for this year) and its cash outlays ($1.237 trillion). We are not supposed to notice that Michael Bloomberg’s wealth gain since September of last year ($17.7 billion*) would cover almost the entire 2023 shortfall of $22 billion all by itself, or that the entire amount could be recouped by throwing in Bill Gates’ gains during the same period.

That’s right: the nine-month income of two billionaires alone would erase Social Security’s entire actuarial imbalance for a full year. (And 2022 was a bad year for billionaires; “bad,” of course, being a very relative term.)

A trillion-plus dollars sounds like a lot of money, and it is. But the personal wealth of just ten Americans would cover Social Security’s entire budget for an entire year. Not that it would, at least under current law. The law dictates that Social Security’s costs be covered by a payroll tax levied for that purpose alone. But a wealth tax, or something like it, could be a popular option if the program faces a real funding crisis.

There are already sound proposals to “scrap the cap” on income that is taxed for Social Security, and to include investment and other sources of income in that tax. Billionaires would face a tax hike under these proposals, although their total taxes would still be well below mid-20th century norms.

The tax question surely accounts for some of the billionaires’ antipathy toward Social Security but, even so, their feelings seem to run unusually high on the subject.

What They Say

The billionaires’ vituperation toward Social Security can be seen in Elon Musk’s ill-informed tweet about it (which The Intercept’s Jon Schwarz ably dissected). It can be found in CEO conclaves like “Fix the Debt,” where the heads of corporations like JetBlue, Bridgestone, and Microsoft, as well as government largesse recipients like Honeywell, GE, Boeing, Bank of America, and Goldman Sachs assembled to attack programs “entitlements.”

It oozes through op-eds like this one from predatory billionaire Steve Schwarzman, who magnanimously promised to “share the pain” of financial sacrifice with elderly Social Security recipients living on a few hundred dollars a month. (5.5 million seniors reportedly faced food insecurity in 2021; Schwarzman “took home a record $1.27 billion for 2022”.)

The goal is to frame Social Security cuts in false, technocratic terms as the inevitable outcome of simple arithmetic. They want it to look as if the decision to cut benefits made itself. That way, they leave no fingerprints on the corpse of retirement security.

It’s reflected in Mitt Romney’s bitter words at a 2012 fundraiser, when he told a roomful of fellow rich people that “they”—it’s always “they,” not “us”—"they believe the government has a responsibility to care for them, that they are entitled: to health care, to food, to housing, you name it.”

Added Romney, “That's an entitlement."

Most of all, it can be seen in works of the late billionaire Peter G. Peterson, a conservative hedge funder and former Nixon cabinet member who lavished money on politicians from both parties in pursuit of his curious obsession: to reduce government spending, with a special focus on cuts to Social Security and Medicare. The foundation, astroturf groups, and think tanks Peterson created have worked for decades to elevate the national debt above all other policymaking concerns, regardless of the effect on working Americans, with a special focus on cuts to Social Security and Medicare.

The goal is to frame Social Security cuts in false, technocratic terms as the inevitable outcome of simple arithmetic. They want it to look as if the decision to cut benefits made itself. That way, they leave no fingerprints on the corpse of retirement security.

Why They Hate

But why? Why do the ultra-wealthy hate Social Security so much? It’s not just self-interest, although there is certainly that. The answer lies in the anthropology, as well as the accountancy, of the billionaire class. Social Security represents everything the typical billionaire loathes, including community, solidarity, and the empowerment of the working class.

Social Security isn’t charity, and that galls them. Social Security is run for working people – people who know they have earned those benefits.

Billionaire CEOs belong to a group whose membership is earned through obsession, greed, competitiveness, and lack of empathy. It is a population self-selected for sociopathy and work-life imbalance. It’s hard to make a billion dollars without cheating people, and it’s hard to cheat people when you see them – really see them, through the eyes of understanding and emotion. That’s why someone like Schwarzman can equate his own “sacrifice” (of what, a fifth or sixth yacht?) with the suffering of an ailing grandmother trying to get by on $75 per week.

It's impossible to bargain with them by telling them they already have enough money to live like an emperor. At that level, money works the way social media likes work for some other people: it doesn’t affect their lives in any material way, but it boosts their sense of worth and validation. That’s why they’ll never quit. That’s why they’ll never say, “I have enough.” There is always someone else who is gaining on them every time they stop to eat, sleep, make love, express an emotion ...

Sure, they’ll write a check to charity from time to time. That’s good for the ego. It brings applause, praise, black-tie dinners, and fawning requests for more money. But Social Security isn’t charity, and that galls them. Social Security is run for working people – people who know they have earned those benefits. Pay a tax, with no effusive speeches or stroking of the ego for America’s 0.001 percent? The idea offends their sense of self-importance.

This is why they love to hear politicians like Alan Simpson insult Social Security recipients by calling them “greedy geezers.” They think they’ve won life’s race. People who have lived other kinds of lives – filled, perhaps, with love and kindness rather than competition and exploitation – are losers to them. In their minds, people like that are nothing. For them to ask anything of the wealthy is, well, impudence.

Controlling the Discourse

Unfortunately, the billionaire class increasingly controls US news outlets. Their obsession has warped the national discourse for decades. It has wormed its way into the media ecosystem, as billionaire-funded think tanks, lobbying groups, and politicians flood the airwaves and newspapers with false talking points about the “unaffordability” of such programs. “Both Medicare and Social Security are going broke and taking a larger share of the budget in the process,” ABC’s Martha Raddatz once told the national audience for a vice presidential debate. (Neither half of that statement is true.)

Their obsession is reflected in a news industry that has been increasingly centralized under billionaire control. Media elites sometimes sounded like jilted lovers when they reported that neither party pushed for Social Security or Medicare cuts in the debt ceiling deal.

The Washington Post, which often channels billionaire views on Social Security, ran a must-read article under the headline, “How a billionaires boys’ club came to dominate the public square.” As Michael Scherer and Sarah Ellison note,

“Technological change and the fortunes it created have given a vanishingly small club of massively wealthy individuals the ability to play arbiter, moderator and bankroller of not only the information that feeds the nation’s discourse but also the architecture that undergirds it.”

The billionaires’ obsession is also reflected at non-profit outlets like NPR—which, despite the word “public” in its name, relies heavily on corporate and billionaire donors for survival.

Dialing for Dollars

What the billionaires say, usually goes. “... (E)conomic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” a 2014 study found, “while average citizens and mass-based interest groups have little or no independent influence.”

Things have only gotten worse since then. Billionaires poured nearly $1 billion ($881,000,000) into the last round of congressional elections. How does this affect policy? Politicians who carry out the wishes of billionaires, corporate CEOs, and lobbyists raise more money, of course. But there is also a process of acculturation, where elected officials become so steeped in the world of elite consensus that they come to believe in it themselves.

Consider, for example, the infamous slide deck which advised incoming Congressional Democrats to spend four hours a day on “call time” and one hour per day on “strategic outreach,” both of which involve raising money for their next campaign. Imagine spending four to five hours a day calling people who despise Social Security, and it soon becomes clear that only a miracle has protected Social Security so far—and miracles don’t last forever.

It would be a mistake to assume that the recent “debt ceiling deal” means that Social Security is safe.

Unless you’re a candidate with mass support like Bernie Sanders, campaign fundraising requires constant immersion in the anti-Social Security mindset of the ultra-wealthy—which, when combined with the GOP’s longstanding hostility to the program, means that the people who make our laws are steeped in a worldview that considers “entitlement programs” expensive and superfluous.

That’s why it would be a mistake to assume that the recent “debt ceiling deal” means that Social Security is safe. Neither party wanted to take the unpopular step of calling for benefit cuts in this round of negotiations. But the billionaires and corporations who drive our political system won’t stop trying. That’s how they got where they are; by persisting until they win.

Previous attempts to cut Social Security have come in the form of ‘bipartisan commissions’ whose role was to obscure the process and shield both parties from blame. (Mitt Romney’s TRUST Act would follow the same playbook, as would other billionaire-backed proposals.) The White House has correctly called these commissions “death panels,” which may be one reason why billionaires primarily contributed to Republican candidates in the last election cycle. But public opinion must be mobilized to prevent any further softening of President Biden’s position on Social Security, before the billionaires let their money do the talking in the 2024 race.

Because, when it comes to money in politics, Bob Dylan’s words hold true: money doesn’t talk, it swears.

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RICHARD ESKOW
Richard (RJ) Eskow is a freelance writer. Much of his work can be found on eskow.substack.com. His weekly program, The Zero Hour, can be found on cable television, radio, Spotify, and podcast media. He is a senior advisor with Social Security Works.
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