Warning: Republicans are plotting to raid Social Security
Donald Trump is obsessed with defunding Social Security. In the midst of a catastrophic pandemic, millions of Americans are facing eviction and hunger if Congress doesn’t act now to extend unemployment benefits. Essential workers are in desperate need of testing and protective equipment.
But Trump doesn’t care. He has threatened to veto any COVID aid package that doesn’t include a cut to the “payroll tax”—Social Security’s dedicated revenue. On Monday, Minority Leader Kevin McCarthy (R-CA) announced that Congressional Republicans are on board with Trump’s plan to defund our earned benefits.
As a response to the economic crisis, with 40 million unemployed in just the last few months, cutting Social Security contributions (which are only paid by people who are employed) makes no sense. They are a poor economic stimulus. The money is paid out slowly over many months and fails to get cash into the pockets of those who need it most and will spend it immediately. Those shortcomings defeat the purpose of stimulus—creating needed economic activity. The only reason to support this policy over better targeted, more efficient measures is if your true goal is to undermine Social Security.
When reporters asked Senator Chuck Grassley (R-IA) for his thoughts on the Republican proposal, his response was refreshingly honest. Grassley worried that it “might create political problems” because “Social Security people think we're raiding the Social Security fund. And we are raiding it...”
Grassley should be commended for his candor. Also, for his political acumen. The American people want their Social Security contributions to be used for their dedicated purpose—paying Social Security’s earned benefits and the associated administrative costs. Working families do not want their contributions raided.
Americans overwhelmingly oppose cutting Social Security. Raiding its dedicated revenue is the first step to cutting those earned benefits. Republican activist Grover Norquist once famously stated that he wants to reduce government to the size where he can “drown it in the bathtub.” That’s exactly what Donald Trump and Congressional Republicans want to do to our Social Security system.
The Republican tactic to reduce government is to “starve the beast” with tax cuts. Thanks to that tactic, government revenue continues to be cut, most recently by a tax giveaway to the wealthy right before the 2018 election. The starvation diet has caused Congress to cut domestic spending to the bone. Now, Republicans want to employ the same scheme against another “beast,” Social Security. “Starving” Social Security of its dedicated revenue, they hope, will force cuts.
Grassley went on to say “…but we have always put in general fund revenue in it so it is made whole.” On this point, Grassley is singing from the Republican hymnal. In reality, substituting general revenue for dedicated revenue will not make Social Security whole.
Indeed, substituting general revenue for Social Security’s dedicated funning is what Republicans have proposed starting all the way back to the presidential campaign of 1936, just a year after Social Security was enacted. General revenue is in no way equivalent to Social Security’s dedicated funding.
Unlike the general fund, Social Security cannot run a deficit. If it does not have sufficient revenue to cover every penny of costs, full and timely benefits will stop. It cannot borrow the needed money, because it has no borrowing authority. Consequently, Social Security does not add a penny to the deficit. Indeed, according to the latest Trustees Report, Social Security has a $2.9 trillion reserve.
Trump and his allies know that they cannot succeed by attacking Social Security directly. It is too popular. Instead, they profess their support for Social Security, all while undermining the program’s funding so they can demand cuts down the road.
For years, Republicans have tried to claim that Social Security is in crisis, going bankrupt, and that they are simply trying to “save” it. They also claim that Social Security is a driver of the deficit and so must be cut. This is oxymoronic, because Social Security cannot be both. If it is a driver of the deficit, it cannot be in crisis, any more than the Defense Department is. If it is in crisis, it cannot add to the deficit.
Unfortunately for the Republicans, Social Security is neither in crisis nor a driver of the deficit. Republicans are desperate to change those facts so that they line up with their anti-Social Security rhetoric. That is the apparent thinking behind the obsession with cutting Social Security’s dedicated revenue.
If Republicans simply cut Social Security’s dedicated funding, they will cause a crisis. If they substitute general revenue, they will, like the criminal who murders his parents and asks the court for leniency because he is an orphan, claim that Social Security adds to the deficit.
President Franklin Roosevelt carefully designed Social Security as an earned benefit. He astutely recognized that contributions by workers “give the contributors a legal, moral, and political right to collect” Social Security. He predicted that those Social Security contributions, dedicated and able to be used only for payment of benefits and associated costs meant that “no damn politician can ever scrap my social security program.”
We must organize to ensure that today’s “damn politicians” do not succeed in their attacks on Social Security. In addition to worrying that the Republican proposal would cause political problems, Grassley also recognized that, “it creates a public relations problem.” That’s an understatement.
If 2020 payroll contributions to Social Security and Medicare are cut, Grassley will save $11,341.70. Majority Leader Mitch McConnell and his wife, Secretary of Transportation Elaine Chao, will together save $22,934.25.
Senator Joni Ernst (R-IA), who wants to cut Social Security behind closed doors, will benefit to the tune of $11,057.40, as would Senator Susan Collins (R-ME), Senator Lindsey Graham (R-SC), and every other Senate Republican.
Though the salaries of Donald Trump, Jr. and his brother Eric are not publicly reported, they will likely save hundreds of thousands of dollars, if not millions, if their father gets his way.
In stark contrast, the 30 million workers who are unemployed will get $0. One-quarter of state and local employees—including forty percent of public school teachers and over two-thirds of firefighters, police officers, and other first responders, not covered by Social Security, will save around $700 in Medicare contributions.
That self-dealing on the part of our elected officials and their families is on top of self-dealing from the Payroll Protection Program. That program was designed to help struggling small businesses and their employees survive the economic collapse. It is just starting to come out who was first at the trough: Almost $14 million of that assistance went directly—and apparently quickly—to members of Congress and their families.
It is bad enough that Donald Trump and his Republican cronies in Congress are seeking to destroy our Social Security. It is insult on top of injury that they profit so royally as they do so.
In November, when we decide whether Donald Trump will retain the presidency and whether Mitch McConnell (R-KY), Graham, Ernst, Collins, Cory Gardner (R-CO), David Perdue (R-GA), Steve Daines (R-MT), Thom Tillis (R-NC), John Cornyn (R-TX), and Kelly Loeffler (R-GA) retain their Senate seats, we should remember the money they are pocketing.
Donald Trump was right to say we should drain the swamp. What he failed to tell us is that he and his Republican allies are the swamp creatures.
Nancy J. Altman is president of Social Security Works and chair of the Strengthen Social Security coalition. She has a 40-year background in the areas of Social Security and private pensions. 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!