Payroll Tax Cut Would Fully Deplete Social Security by 2023, Chief Actuary Says

The Social Security Administration’s chief actuary estimated late Monday that eliminating the payroll tax would fully deplete Social Security’s disability and old-age trust funds by 2023, confirming the disastrous consequences progressive advocacy groups and lawmakers have been warning of since President Donald Trump threatened earlier this month to “terminate” the levy if reelected in November.

In a letter (pdf) to Sens. Chris Van Hollen (D-Md.), Bernie Sanders (I-Vt.), Ron Wyden (D-Ore.), and Senate Minority Chuck Schumer (D-N.Y.), SSA chief actuary Stephen Goss wrote that scrapping the payroll tax would “permanently” deplete the Disability Insurance trust fund by mid-2021 and the Old Age and Survivors Insurance trust fund by mid-2023 “with no ability to pay” the benefits afterward.

The letter comes days after the group of Senate lawmakers asked (pdf) Goss to analyze “hypothetical legislation” that would zero out the payroll tax as Trump has repeatedly proposed in recent months.

“The law does not provide authority for the trust funds to borrow in order to pay benefits beyond the limited authority for ‘advance tax transfers’,” explained Goss, a 30-year SSA veteran. “This limited authority allows all payroll tax income expected for a month to be advanced to the beginning of that month if needed to meet benefit obligations on a timely basis. Thus … benefit obligations could not be met after the depletion of the asset reserves and elimination of payroll taxes.”

Nancy Altman, president of advocacy group Social Security Works, said in a statement that Goss’ assessment further substantiates “what Democrats and Social Security advocates have been saying for weeks: Donald Trump’s plan to ‘terminate’ Social Security’s dedicated funding if he is reelected would destroy Social Security.”

“Trump has shown himself willing to undermine the post office, the free press, and other institutions. If he’s reelected, our Social Security system is his next target,” Altman warned. “Everyone should listen to Social Security’s independent chief actuary and alert your friends and family: If Donald Trump wins reelection, Social Security will be at his mercy.”

Goss’ letter came shortly before Donald Trump Jr., during a speech on the opening night of the Republican National Convention Monday, touted his father’s attempt to unilaterally suspend the payroll tax, referring to a directive the president signed last month that experts and employers have slammed as unworkable and illegal.

“They attacked my father for suspending the payroll tax for middle-class workers,” Don Jr. complained.

The “payroll tax cut” Don Jr. just bragged about?

This is what it really means – defunding and destroying Social Security. https://t.co/QxNNr0maHe

— SocialSecurityWorks (@SSWorks) August 25, 2020

In a statement responding to Goss’ analysis, Van Hollen said it is clear that Trump’s push to eliminate the payroll tax is “another thinly veiled attempt to gut Social Security and go after the American people’s hard-earned benefit.”

Sanders echoed Van Hollen in a tweet late Monday, writing that the SSA “confirmed what we already knew.”

“Trump’s disastrous plan to defund Social Security would eliminate retirement and disability benefits by 2023,” said Sanders. “That may make sense to the billionaires at Trump’s country club, but it makes zero sense to me.”