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    • What would Harris and Trump do about the Social Security deficit?
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    What would Harris and Trump do about the Social Security deficit?

    Online Niel Posted on

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    Social Security is facing a crisis: it has no funding.

    According to the federal government, the program’s trust fund is facing a shortfall that will lead to an automatic reduction in benefits 17% in 2035.

    For nearly one in five seniors, Social security benefits provide at least 90% of their income. In polls, most Americans point to Social Security as a “top issue” that is “very important” to them.

    Donald Trump and Kamala Harris say they won’t allow benefits to be cut, but neither has laid out a specific plan to fix the problem. Still, they offered different approaches: Harris advocates raising tax revenue for Medicare and Social Security by increasing contributions from high-income earners, while Trump — at odds with nonpartisan budget experts and fact-checkers — says the problem is caused by illegal immigration . .

    Trump would also create tax breaks that would reduce income that fund these programs, according to studies by nonpartisan groups like the Committee for a Responsible Budget. The deficit watchdog on Monday released a projection that Trump will hike Insolvency of the social security trust fund with three years.

    “The future of Social Security has not been a major focus of this election, but it should be,” Alex Lawson, executive director of Social Security Works, a left-leaning advocacy organization focused on retirement benefits, told USA TODAY. “Congress must act on Social Security before 2035 to prevent automatic benefit cuts. The presidential candidates and their parties have very different visions for our Social Security system.”

    “Make millionaires and billionaires pay their fair share”

    Social Security and Medicare are funded through dedicated tax streams called payroll taxes. The typical employee pays 6.2% of their income in payroll taxes, while the employer pays the same amount on their behalf. Independents pay 12.4%.

    Medicare Trust Fund it is projected to run out of money in 2036, according to the 2024 report by the Medicare Board of Directors.

    When candidates from the first presidential debate were asked how he would fix the deficit, President Joe Biden said he would raise the cap on income that is taxed for Social Security and Medicare. Since only income below $168,000 is currently taxed, the average worker – who earn less than $60,000 per year − pays 6.2% of earnings, while someone earning $1 million a year pays less than 1%.

    Biden proposed applying payroll taxes to incomes above $400,000 a year, which would ensure the trust fund would not be depleted until 2066, according to the Social Security Office of the Chief Actuary. The Democratic National Convention Platform also included that proposal.

    of Harris the campaign website says that “She will strengthen Social Security and Medicare over the long term, making millionaires and billionaires pay their fair share of taxes.”

    The Harris campaign declined to elaborate on exactly what those tax changes would be when asked by USA TODAY.

    “Vice President Harris and Governor Walz are fighting to reduce costs and will always protect and strengthen Social Security and Medicare,” Harris campaign spokeswoman Mia Ehrenberg said in an email. “In stark contrast, Donald Trump has a long history of trying to cut Social Security and Medicare for the millions of Americans who rely on these programs, proposing cuts to Medicare and Social Security while in office and promising to target them if they are re-elected”.

    The Trump campaign says it would not cut Social Security benefits, which it does 67 million elderly and disabled Americans receive.

    Some advocates for increasing Social Security funding say they are confident Harris will sign a bill that raises payroll taxes for high earners, in part because there is widespread support among Democrats in Congress for such legislation.

    “Her entire agenda is a continuation of the Biden-Harris presidency,” Lawson said. “Her position is actually clear because the Democratic position is clear, where she’s been with Biden is clear and what she’s saying on her website is extremely clear that it fits with what’s been said before.”

    What Trump would do about Social Security

    Trump has not proposed a policy specifically designed to expand the solvency of the Social Security trust fund. He answered the debate question about the program by arguing − that has throughout the campaign − that illegal immigration is causing the trust fund’s impending deficit.

    “These millions and millions of people coming in, they’re trying to put them on Social Security,” Trump said at the debate. “(President Biden) is going to wipe out Social Security. He’s going to wipe out Medicare.”

    The fact checkers called foulpointing out that anyone living in the US illegally is not eligible to receive Social Security or Medicare. But many workers who entered the US without legal status do supports the programs by paying taxes.

    “Immigration can often help trust funds because many are still paying taxes into the system without receiving benefits,” Garrett Watson, senior policy analyst at the Tax Foundation, a center-right think tank, told USA TODAY. A study by the Social Security Administration found that unauthorized immigrants actually increased the Social Security trust fund by 12 billion dollars a year in 2010 and 2016 study by the pro-immigration group New American Economy found a contribution of $13 billion.

    The Trump campaign says Democrats would offer a path to citizenship — and eligibility for key benefits, including Social Security — for immigrants here illegally. Harris approved a path to citizenship for some immigrants without legal status.

    “Kamala Harris wants to bankrupt the country with free healthcare for 11 million illegal immigrants and benefits like Social Security and Medicare, draining resources from Americans and non-citizens who don’t pay for federal assistance programs,” said Karoline Leavitt, the Trump campaign’s national press secretary. in a statement. “President Trump is calling for the largest deportation program since President Eisenhower to end the financial drain on our health care system and ensure our country can continue to care for American citizens who rely on Medicaid, Medicare and Social Security – not illegal immigrants”.

    More: Donald Trump has promised a “mass deportation”. It would cost billions.

    Would Trump Cut Social Security Benefits?

    During this campaign, Trump repeatedly pledged not to cut Social Security or Medicare benefits.

    “As president, I will not cut a dime from Social Security or Medicare,” Trump said Faith and Freedom Coalition in June.

    But Trump has at times advocated cuts to Social Security and Medicare in the past. As president, proposed in 2019 cutting $25 billion from Social Security and $575 billion from Medicare over a decade. In 2020, he advocated cutting $45 billion from Social Security disability benefits.

    Trump seemed to suggest in March that he would cut benefits, when he said: “There’s a lot you can do in terms of rights, in terms of cutting and also in terms of rights theft and mismanagement.” The Trump campaign said it was only talking about reducing waste and fraud.

    “He said he’s not going to cut benefits, and I believe that,” Stephen Moore, a Trump campaign adviser and visiting senior fellow in economics at the Heritage Foundation, a conservative think tank, told USA TODAY.

    “You have to grow the economy”

    Some analysis suggests that — whatever his intentions — Trump’s tax plans are inevitable accelerate the social security deficit and resulting reductions in benefits.

    First, Trump proposed exempting Social Security benefits from taxation. Social Security benefits are taxed only to pay into the Social Security trust fund. So the tax exemption would reduce revenue by it is estimated at $1.6 trillion to $1.8 trillion until 2035.

    More recently, Trump has called for the elimination of taxes on tips and overtime wages. If that income is not subject to payroll taxes, then payroll tax revenues would decrease.

    Exempting overtime from payroll taxes at the employee level would reduce Social Security and Medicare revenue by at least $419.6 billion over 10 yearsaccording to the Fiscal Foundation, and exempting employers would also double the revenue loss.

    “That would make the problem worse, maybe accelerate the insolvency of the trust even more, make it even sooner,” Watson said. “Then you’re looking at the early 2030s or even earlier in the worst-case scenario.”

    The Committee for a Responsible Budget added up the Social Security costs of all of Trump’s proposals and found that it would increase the program’s deficit by about $2.3 trillion between 2026 and 2035. Benefits would have to be cut by a third in 2035, a noted the group. .

    Harris proposed exempting tipped wages only from income taxes, not from payroll taxes. Trump did not set such limits on the proposed payroll or overtime tax breaks, and did not say whether employers would also be exempt from their share of payroll taxes.

    Moore says Trump would avoid cutting Social Security benefits by increasing payroll tax revenue through faster economic growth. He notes that the deficit projections assume an average annual economic growth rate of 1.7 percent and argues that the economy will grow more under Trump, thanks to policies like the income tax cut.

    “You have to grow the economy,” Moore said. “What I always say to the (former) president is that if we can get to a sustained level of 3 percent growth, then the problem is solved. You will have a lot of income.”

    Online Niel
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