Social Security (Will Lose $1 Trillion Under Trump's Plan)

Published September 23, 2020

Dear Editor,

                I had not planned to respond to the writer of “Rolling My Eyes” (Letter to the Editor, Towns County Herald, Aug. 26, 2020) mainly because of his tacit agreement with my thesis that President Trump’s payroll tax deferral scheme is blatant vote buying with the unusual twist that he is paying for our vote with our own money.  While I think the writer’s false analogy to Medicare for All is spurious for many reasons, that is a discussion for another time.

                Rather than dwell on areas of agreement, I write to address where we disagree.  Without evidence, the writer claims Social Security has been mismanaged for decades.  Really?  On the investment side there is not much managerial discretion.  Trust funds, by law, may be invested only in Federal securities.  On the benefit distribution side, eligibility is controlled by specific criteria.  Overpayment errors consumed 0.64 percent of Social Security outlays in 2018.  For comparison, private industry loses 20 to 30 percent of revenues to inefficiency, according to marketing research.  The mythical “La la land” to which he consigned me, unless he has contrary evidence, is actually the habitat of his ipse dixit proposition.

                If an argument for mismanagement exists, it is in Trump’s handling of the COVID-19 pandemic and his intentions for the payroll tax.  His early and persistent inaction is deepening and prolonging the pandemic.  As a result, more than 13 million people are out of work.  When people don’t work they don’t pay into the trust fund, thus weakening it.  This has the potential to hasten Social Security insolvency by six years and could result in a 31 percent cut in benefits after 2029, according to the Bipartisan Policy Center.  His payroll tax deferral scheme is the greater mismanagement.  Paul Van de Water with the Center on Budget and Policy Priorities estimates the deferral could reduce the Social Security trust funds by another $100 billion, further exasperating the problem.  Moreover, Trump’s proposal to eliminate the payroll tax entirely, if not offset, would force Social Security into insolvency by the middle of calendar year 2023, according to the Chief Actuary of the Social Security Administration.  Offsetting the loss out of general revenues would require raising taxes by $1.034 TRILLION or increasing the debt by an equal amount annually.  (Budget cutting won’t work.)

                Finally, there is that claim Trump knows what he is doing with respect to the economy.  Trump’s record is hardly one of economic prowess, considering his properties declared bankruptcy six times, he lost $1 billion on bad investments over 10 years, and other business failures include $60 mail-order Trump steaks and the fraudulent Trump University.  This is not the record of an economic genius.

                As responsible voters we should emphasize facts over fear and truth over fiction when we assess any politician’s proposals and performance.  While I focused on areas of disagreement, I associate myself with the writer’s hope that our nation will recover with God’s help because it certainly won’t under Trump’s leadership.

David Plunkett