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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?

    Umito Posted on

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    Social Security is facing a crisis: it lacks funding.

    Program trust fund faces deficit that will result in automatic benefit reduction, federal government says 17% in 2035.

    For nearly one in five elderly people, Social security benefits provide at least 90% of their income. In polls, most Americans cite Social Security as a priority. “main question” it’s “very important” to them.

    Donald Trump and Kamala Harris both say they won’t allow benefits to be cut, but neither has laid out a specific plan to address the problem. They have, however, proposed different approaches: Harris argues for increasing tax revenue for Medicare and Social Security by raising premiums on high earners, while Trump – at odds with nonpartisan budget experts and fact-checkers – says that the problem is caused by illegal immigration. .

    Trump would also create tax exemptions that reduce income who fund these programs, according to studies by nonpartisan groups like the Committee for Responsible Budgeting. The deficit watchdog released a projection Monday that Trump would raise the exchange rate. Social Security Trust Fund Insolvency Within 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 on retirement benefits. act on social security before 2035 to avoid automatic reductions in benefits. The presidential candidates and their parties have very different visions of our Social Security system. »

    “Make millionaires and billionaires pay their fair share”

    Social Security and Medicare are financed by dedicated tax streams, called payroll taxes. The typical employee pays 6.2% of their income in payroll taxes, while their employer pays the same amount on their behalf. Self-employed workers pay 12.4%.

    The Medicare Trust Fund is expected to run out of money in 2036, according to the Medicare Board’s 2024 report.

    When candidates for first presidential debate When asked how they would close the deficit, President Joe Biden said he would lift the income cap imposed on Social Security and Medicare. Since only incomes below $168,000 are currently taxed, the average worker − who earns less than $60,000 per year − pays 6.2% of earnings, while someone earning $1 million per year pays less than 1%.

    Biden has proposed applying payroll taxes to incomes above $400,000 a year, which would ensure the trust fund does not run out until 2066, according to the Social Security Office of the Chief Actuary. THE Democratic National Convention Platform also included this proposal.

    at Harris the campaign website says that “it will strengthen Social Security and Medicare in the long term by making millionaires and billionaires pay their fair share of taxes.”

    The Harris campaign declined to specify what exactly these tax changes would be when asked by USA TODAY.

    “Vice President Harris and Governor Walz are fighting to lower costs and will always protect and strengthen Social Security and Medicare,” Harris campaign spokeswoman Mia Ehrenberg said in an email . “In contrast, Donald Trump has long attempted 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 power and promising to target them if they are re-elected.

    The Trump campaign says he won’t cut Social Security benefits, which 67 million elderly and disabled Americans receive.

    Some supporters of increased Social Security funding say they are confident Harris would sign a bill that would raise payroll taxes on high earners, in part because he has broad support among Congressional Democrats for such legislation.

    “His 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 stands with Biden is clear, and what she says on her website is extremely clear and consistent with what has been said before.”

    What Trump would do on Social Security

    Trump has not proposed a policy specifically designed to expand the solvency of the Social Security trust fund. He responded to the debate question on the program by arguing – as he did it throughout the campaign − that illegal immigration is the cause of the imminent trust fund deficit.

    “These millions and millions of people that are coming in, they’re trying to get them on Social Security,” Trump said during the debate. “(President Biden) will eliminate Social Security. He will eliminate Medicare.”

    Fact checkers called misconductemphasizing that anyone residing illegally in the United States is not eligible for Social Security or Medicare. But many workers who entered the United States without legal status do so support programs by paying taxes.

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

    The Trump campaign argues that Democrats would open a path to citizenship — and eligibility for key benefits, including Social Security — for illegal immigrants here. Harris endorsed a path to citizenship for some immigrants without legal status.

    “Kamala Harris wants to bankrupt the country with free health care for 11 million illegal immigrants and benefits like Social Security and Medicare, draining resources from Americans to non-citizens who don’t contribute to federal aid programs,” said Karoline Leavitt, national press secretary for the Trump campaign. in a statement. “President Trump is calling for the largest deportation package 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 expulsion”. 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 the Faith and Liberty Coalition in June.

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

    Trump seemed to suggest in March that he would cut benefits, when he said: “You can do a lot in terms of entitlements, in terms of reduction, but also in terms of theft and mismanagement of entitlements. The Trump campaign said it was all about reducing waste and fraud.

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

    “We have to grow the economy”

    Some analyzes suggest that – whatever his intentions – Trump’s tax plans would inevitably lead to accelerate the Social Security deficit and the resulting benefit reductions.

    First, Trump proposed making Social Security benefits themselves tax-exempt. Social Security benefits are taxed only to fund the Social Security trust fund. This tax exemption would therefore reduce the revenue of an amount estimated between 1,600 and 1,800 billion dollars until 2035.

    More recently, Trump has called for eliminating taxes on tips and overtime. If this income were not subject to social security contributions, tax revenues on wages would decrease.

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

    “It would just make the problem worse, maybe accelerate the insolvency of the trusts even more, make it even faster,” Watson said. “We are then looking at the beginning of the 2030s, or even earlier, in the worst case.”

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

    Harris proposed exempting tipped wages only from income tax, not payroll taxes. Trump did not set such limits on his proposed wage or overtime tax exemptions, or indicate 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 deficit projections assume an average annual economic growth rate of 1.7%, and he says the economy will grow stronger under Trump, thanks to policies such as income tax cuts .

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

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