Last weekend President Trump issued, among other actions, a memorandum deferring employee payroll taxes from August through the end of 2020, denying Social Security billions of dollars that would have otherwise gone to the program. This action puts Social Security – and the millions of older adults and people with disabilities who rely on the program – at significant and serious risk of losing some or all of the benefits they rely on if this type of policy were expanded or continued.
Social Security is a vital program, with more than 61 million Americans receiving benefits through Social Security’s retirement, survivors, and disability insurance programs. It lifts over 21 million people, including over 14 million seniors, out of poverty. Payroll taxes are the primary source of revenue for Social Security, and this dedicated revenue, which can only be used to pay benefits and associated administrative costs, ensures that the program can pay benefits to current and future beneficiaries.
Attempts to starve the program of revenue through schemes like this payroll tax deferral are dangerous to the endurance and effectiveness of the program for all of us. The vast majority of Americans support paying taxes to ensure that Social Security continues to thrive. The president’s efforts to undermine the program through this payroll tax deferral threaten the economic security of millions of people, now and in the future.
In addition to taking critical funds from Social Security, this action does not help those struggling as a result of the pandemic. Payroll tax cuts are an ineffective way to provide economic stimulus, especially to lower-wage workers, and will do absolutely nothing to support the millions of people who are unemployed. It also does little to support older adults, who are most at risk, or communities of color, including the Black and Latino communities that have been disproportionately harmed by the pandemic.
At a time when people in this country are falling behind on their rent and mortgage, losing their jobs, attempting to care for children who cannot attend school in person, being confined in long-term care facilities with no access to their loved ones, and falling ill and even dying, we could do far more and far better. Expanding the crucial programs that support us, like Social Security, would be a better first step.