Could President Donald Trump singlehandedly destroy Social Security, the New Deal retirement program that for 85 years has provided critical support to old or disabled Americans — currently numbering 65 million?
At first blush, the idea that a president could singlehandedly destroy a program that was founded in 1936 by Franklin Delano Roosevelt, that has since then for 85 years had the solid backing of Congress, and that polls have consistently ranked as the most popular government program in history, is shocking.
And yet, a gradual surrender of its power of the purse by Congress, especially over the last half century, has steadily increased the powers of the Executive branch to the point that the answer at this point may be: Yes he can!
That’s the warning from Nancy Altman, president of Social Security Works, an advocacy organization dedicated to protecting and improving Social Security for all Americans.
Altman says that the mainstream media have been failing to report properly on the grave threat to the Social Security System that has been openly announced by President Trump, treating it as this president’s typical exaggeration and hyperbole. She warns that this current Trump move to use his executive authority to defer for four months the collection of the employee and employer FICA tax that funds Social Security, and the Medicare payroll tax that helps fund that government health care insurance program for the elderly and disabled, is a shot across the bow. Trump made the move citing an obscure power under 26 US Code 7508A (Authority to postpone certain deadlines by reason of Presidentially declared disaster or terroristic or military actions). That law, passed by Congress in 1997, allows the president to defer payment of taxes like the income tax and the payroll taxes for up to a year.
Altman warns, “The president has stated publicly that, ‘if re-elected’ he will make the deferral of the September-December payroll taxes permanent, and will also ‘do away’ with FICA, the Social Security payroll tax.”
Altman notes that last week, responding to a query from four US Senators, the Social Security Administration’s chief actuary Stephen C. Goss, stated in a letter that terminating collection of the payroll tax, if Trump were to go through with doing that, would force the Treasury Department to draw on the Social Security Trust Fund, which is currently about $2.9 trillion, to meet current benefit payment obligations. That may seem like a lot of money, but Goss said in his note that the benefits owed annually by the SSA to current beneficiaries who are retired, the widows of someone living on their spouse’s Social Security death benefits, or disabled, total about $1.15 trillion. Thus, he says, with payroll taxes being deferred for a year, the separately funded Social Security Disability program’s share of the Trust Fund would dry up entirely by the middle of next year, leaving 8.5 million disabled people (including many disabled veterans) without any income. Worse yet, if payroll taxes continued to be deferred by repeated declarations of emergency by the president, nearly 60 million elderly retirees as well as widows and dependent spouses and children who are receiving Social Security benefit checks would be left destitute by mid 2023.
The media are treating this as a minor story, perhaps imagining that no president would allow Social Security to simply suddenly disappear like that. But Altman sees method to President Trump’s madness. And the public — especially the 65 million people who are surviving on Social Security, and the even greater number of younger people who will have to care for their parents and grandparents if their parents and grandparents lose those monthly checks, need to pay attention. Says Altman, “The president could, if re-elected, declare a national emergency and use Section 7508A to delay collection of the payroll tax for Social Security and Medicare Tax for a year, and then, do it again a year later. By then, The program would be dead. Sure Congress could pass a measure to transfer funding for the program from the General Fund, but if Trump vetoed such a bill, it wouldn’t probably be overridden because even if the Democrats succeed in taking control of the Senate, it will be by a narrow majority.”
She could be right. Today’s Republicans seem to be fused at the hip to president Trump, and not in a mood to challenge him.
It’s not that Social Security would vanish. That would be impossible, with so many people depending upon it, but as she explains, “At that point Trump, who will be a lame duck not concerned about running for President again, would have tremendous leverage to shape a Social Security ‘reform’ that would be more like what Republicans have been wanting for decades.” What would that be? Probably making Social Security benefits means-tested, or essentially a welfare program, and also perhaps privatizing the system, a long-time dream of Wall Street investment houses and money managers.
All this suggests that Democrats seeking federal office this November, from the Presidency down to the Senate and House, at this point need to start campaigning hard on the hugely popular Bernie Sanders plan for expanding and defending Social Security. Trump in 2016 won heavily among older white people —especially older white people without a college education. But these are the very people who are most dependent upon Social Security checks and Medicare for their survival. It needs to be explained very clearly and graphically to such people why Social Security is at a crossroads in this election.
Altman says if Trump is elected Social Security could be lost, at least as what it was when it was created during Franklin Roosevelt’s New Deal. Recalling Republican tax-cutting activist Grover Norquist, she says, “He once declared that what conservatives needed to do to the welfare state was ‘drown the baby in the bathtub.’ And that is what Trump is saying he’s going to do.” Meanwhile, she says, Biden and the Democrats have largely adopted Sanders’ proposal, not for Medicare for All, but for expanding Social Security benefits and protecting the program from cuts, privatization or defunding.
“It’s a different time,” she explains. During the ‘90s and on into the Bush and Obama administrations, she says, “The Democrats, including Biden, were talking about compromising with Republicans in a ‘Grand Bargain’ on Social Security. Now Democrats have moved to talking about expanding the benefits and strengthening the program, not compromising it. I think if Biden wins on Nov. 3 and Democrats take control of the House and the Senate, we will see that happen.”
That ought to be more existentially important to current Social Security beneficiaries than the scare stories Trump and his backers are peddling about Antifa “thugs” or Black Lives Matter activists invading their homes or “shadowy masked men in black” flying around in airplanes and “pulling Biden’s strings.”