Now I know there are some Republicans who would be just fine with allowing these programs to wither and die on the vine. The way they see it, Social Security and Medicare are wasteful “entitlement programs.”
But people who think this way need to rethink their position. It’s not unreasonable for people who paid into a system for decades to expect to get their money’s worth–that’s not an “entitlement,” that’s honoring a deal. We as a society must also make an ironclad commitment to providing a safety net for those who can’t make one for themselves.
Again, people have lived up to their end of the bargain and paid into the program in good faith. Of course they believe they’re “entitled” to receive the benefits they paid for–they are! – President Donald Trump
Seniors believed this was the position of Donald Trump in 2016, when he said he wouldn’t cut Social Security benefits, and he won a majority of voters 65 and older – 53% to 44%.
What a difference four years make. A poll released last week from Monmouth University found that 54% of voters, aged 65 or older, plan to vote for Joseph Biden, compared to 43% for Trump. That’s an 11 point negative shift in four years since his election.
Much of that change may be about a Trump order that appears to dismantle Social Security – a danger blasted to seniors daily in blistering emails like the following:
The basis of the above claim originates from Trump’s executive action to stop IRS collection of the 6.2% FICA Social Security tax until December 31. Opponents say he is de-funding the universal pension plan by removing its only source of income.
Trump said he will have Congress replace the deferred FICA deficit with general funds at the end of the year, making the FICA fund (nearly $3 trillion) whole again.
That assumes Congress agrees – a really big assumption. Otherwise, workers will receive a bill for the total amount not withheld.
What Trump really wants, according to Andy Biggs of the American Enterprise Institute, is to use general funds to pay for Social Security and stop FICA taxation altogether.
Here’s another email. Some days I get three or four different senders with basically the same message:
While this alleged threat to Social Security is used to raise small donor money, the real purpose is to sow doubt in the minds of seniors. What will happen to retirement, seniors wonder?
There is no clear communication to counter this de-fund claim. No emails. No position papers with details of what’s coming if Trump wins, just the suggestion that the President will “protect” Social Security.
Seniors recall that Barack Obama made the same protection promise, but within months appointed the Simpson/Bowles gang to change the retirement plan. Those members espoused gimmicks like raising the retirement age to 70 and slashing pension benefits for upper middle class workers. The commission failed to get enough votes to present its findings to Congress.
Current critics of the GOP can also point to a Republican who ran for President – Mitt Romney – who has proposed a plan to change Social Security with a fast track, two-hour hearing, no amendments, no filibuster commission.
“TRUST” Act can end Social Security as we know it – fast track rules for approval – only two hours debate!
Seniors know that Romney and his financial backers were experts at acquisitions, cutting costs and flipping companies to make a buck, regardless of the fate of workers or future of the firms. Some went bankrupt, some didn’t, and billionaire Romney’s threats to Social Security turned off seniors when he ran for President..
Critics overlook reality. If Trump and Romney were left on a desert island together, its population would be reduced to one within hours. These two have opposite views on most major issues.
Another warning to me to despise Trump and love Joe:
No Republican or White House email response to messages like the following:
Trump may have a good response to critics. Social Security has been distorted by Congress, mostly by advice from the Fed’s Alan Greenspan (Trilateral Commission member) in 1986, when the retirement age was raised, tax rate increased and middle class benefits cut to guarantee slightly more for poor pensioners. Income taxation of Social Security began on total earnings above $32,000 per couple (never increased for inflation since then)..
From articles by associates of Trump, this is my best estimate of what the President will promote:
- A basic guaranteed Social Security supplement – if needed – to bring beneficiaries above the poverty line if their “superannuation” funds fall below that level.
- General budget funds used to supplement any deficit, spreading the universal pension burden to all taxpayers, not just those earning less than $137,700.
- A mandatory payment by employers of about 10% on wages to finance employee pensions.
- All funds accumulated will belong to the pensioner and are part of their estate.
- Additional funds can be contributed tax free.
- A limited list of investment vehicles will be used for pension deposits.
- Withdrawals will be taxed at a maximum 15% with low amounts tax-free.
Critics may point to possible excessive fees paid to Wall Street for investments in their funds and administrative costs. However, current funds are invested in Treasury securities at only a 2.7% average return.
The wealthy will argue it’s unfair for them to pay a higher tax percentage than the middle class to fund Social Security. Currently they pay nothing on earnings above $137,700.
Congress will moan because they can’t just “borrow” trillions from FICA excess taxes for other purposes.
Advocates might note that low and middle income workers would avoid the current 6.2% tax on all wages up to $137,500 annually, and funds contributed by employer and employee would be owned by the beneficiaries – allowing transfer to next generation and avoiding early death loss of all contributions under the current system.
What we may be viewing currently is an overly reluctant GOP. Rather than advocate any new program that might hurt the down-ticket for Congressional races, they are ready to accept a Trump defeat.
The establishment branch of the Republican party, as well as Democrats, prefer the status quo, and its flexibility to use your excess FICA tax money and the resulting trust fund for pet projects and sweetheart deals for pet projects, lobbyists and friends.