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Three ways Trump ‘wants to cut social security funding’ that 70 million Americans depend on

PRESIDENT Donald Trump’s proposed payroll tax cut is a clear threat to Social Security benefits that millions of Americans depend on.

Trump has maintained a hands-off approach with Social Security – choosing instead to indirectly influence the program by attempting to boost payroll tax collection via lower corporate and individual tax rates.

However, even though the president has largely avoided calling for direct policy changes to Social Security, he’s previously suggested cutting benefits three separate ways.

Eliminating waste in the SSDI program

Each of President Trump’s federal budget proposal while in office have called for cuts to the Social Security Disability Insurance (SSDI) program.

As of August 2020, the program has provided benefits to nearly 9.8 million people.

This overhaul focused on eliminating wasteful spending within SSDI, as well as reducing retroactive benefits paid to eventually approved beneficiaries from a  period of 12 months to six months.

Since presidential budget proposals estimate the economic impact of fiscal policy actions for a period of 10 years.

Trump’s federal budgets were expected to reduce SSDI outlays by the following amounts over the subsequent decade

These figures are a drop in the bucket relative to what Social Security is expected to outlay over the next decade.

According to estimates, Social Security is estimated to expend more than $15trillion, in aggregate, over the next 10 years.

That means a $24billion to $72billion outlay reduction to resolve perceived inefficiencies in the SSDI program represents a mere fraction of total outlays.

A call for means testing

Another way to Social Security benefit cuts proposed by President Trump is means testing – which would partially or fully phase-out benefits for individuals who earn more than present income thresholds.

This would keep well-to-do seniors from receiving a full benefit or perhaps any benefits at all, if they aren’t reliant on their Social Security income to make ends meet.

However, President Trump has never made means testing for Social Security benefits an official proposal.

It was merely a discussion point tossed out by Trump prior to his 2016 election as a way to reduce Social Security long-term outlays.

Although Democrats are generally against the idea of Social Security benefit cuts, reducing outlays to the highest-earning seniors might be something they’d consider.

Joe Biden, the Democratic nominee, has tossed around means testing as a Social Security solution in the past.

A partial or permanent elimination of the payroll tax

President Trump’s most recent call for Social Security benefit cuts involves his pursuit of a partial or permanent cut to the payroll tax.

The 12.4 percent payroll tax on earned income (wage and salary, but not investment income) was responsible for $944.5billion of the $1.06trillion that Social Security collected in 2019.

In an effort to combat the economic struggles due to the coronavirus pandemic, Trump sign an executive order in mid-August that deferred payroll tax collection between Sept. 1 and Dec 31.

This deferral was designed to beef up workers’ paychecks for the remainder of 2020 - but have those same workers repay what was deferred in 2021.

Some states and businesses have chosen to opt out of the voluntary deferral program.

The president has also tossed around the idea of permanently eliminating the payroll tax, if reelected.

As a result, this would allow workers to receive bigger paychecks but would remove the most critical source of Social Security’s funding.

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