WASHINGTON - Social Security funds would run out as early as
2023 if President Donald Trump opts to permanently cut payroll taxes and there
is no alternative source of revenue, according to an estimate from the chief
actuary of the Social Security Administration.
The estimate was done in response to a request by four
Democratic senators who asked the agency to conduct an analysis on the numbers
after Trump said he would permanently cut payroll taxes if he’s reelected.
Trump previously announced the federal government would defer
employee payroll tax collections for the rest of 2020, aimed at boosting an
economy rattled by the pandemic and an attempt to bypass Congress after talks
on a broader coronavirus relief bill have stalled.
During a news conference earlier this month, Trump said he
could eliminate the tax if he is reelected without undercutting the retirement
program or greatly adding to the deficit, arguing that economic growth would
offset the revenue losses. He added that the reduction would be a “number
that’s bigger than any of the numbers we talked about,” and a typical family
would get back $5,000 or more.
A 12.4 percent payroll tax split between employers and
workers currently funds Social Security, while a 2.9 percent payroll tax
finances Medicare. These taxes raised $1.24 trillion last year, according to
the Congressional Budget Office.
An analysis by the Associated Press found it “highly
unlikely” that economic growth would be enough to offset the loss of the
In a letter sent Monday, Chief Actuary Stephen Goss says the
analysis was based on hypothetical legislation that would not take money from
the general fund.
Assuming the legislation was passed as of Jan. 1, 2021, the
DI Trust Fund that provides monthly benefits to Americans living with disabilities
would be “would become permanently depleted in about the middle of calendar
year 2021, with no ability to pay DI benefits thereafter,” Goss writes.
The OASI Trust Fund, the fund that supports Social Security,
“would become permanently depleted by the middle of calendar year 2023, with no
ability to pay OASI benefits thereafter,” Goss added.
The senators who requested the analysis, Sen. Chuck Schumer,
D-N.Y., Sen. Bernie Sanders, I-Vt., Sen. Ron Wyden, D-Ore., and Sen. Chris Van
Hollen, D-Md., said they would “not be supportive of this hypothetical
legislation,” but would like to “be aware of its potential implications.”
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