Biden was referring to Trump’s suggestion to eliminate the payroll tax, the funding mechanism that supports Social Security and Medicare. The Associated Press explained: “These taxes raised $1.24 trillion last year, according to the Congressional Budget Office. Over a 10-year period, Trump’s idea would blow a $16.1 trillion hole in a U.S. budget that is already laden with rising debt loads.”
The chief actuary of the Social Security Administration, Stephen Goss, sent a letter last week to Senate Democrats, explaining, “If this hypothetical legislation were enacted, with no alternative source of revenue to replace the elimination of payroll taxes on earned income paid on January 1, 2021 and thereafter, we estimate that [the Disability Insurance] Trust Fund asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter.” Goss added, “We estimate that [the Old Age and Survivors Insurance] Trust Fund reserves would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.”
This poses some crucial questions: If Trump eliminates the payroll tax, is he going to raise some other taxes to keep the trust funds going? Would he bleed other programs dry to come up with the money? He does not say, and you can bet he and his Republican allies will never run on a plan to impose new taxes.
The notion that “growth” (What growth? We are in a massive recession) would pay for Trump’s cuts is daft. Just like the $2 trillion tax cut paid for itself? (It didn’t.) It is doubtful Trump thought through, or even understands, the ramifications of his proposal. No Republican on the ballot in November is going to run on it. It is a cheap gimmick meant to please the donor class and escape Trump’s responsibility for failure to make a deal for a new stimulus bill. Unfortunately for Republicans, it might be disastrous as it scares off voters who turn out in high numbers.
Biden was handed a gift from the president, who once vowed he would never cut entitlements (although he is trying to rip out Obamacare entirely, which presumably would cut back on Medicaid as well). Trump made an impulsive, reckless promise to wreck the chief funding mechanism for the two programs most seniors rely upon in retirement. In key swing states with large numbers of seniors such as Florida, Arizona and Pennsylvania, Biden will have a field day telling seniors (whom Trump already endangered by playing down the pandemic and racing to reopen prematurely) that Trump wants to put their retirement and health care in peril.
Republicans have gotten reamed in the past whenever they proposed reforms to reduce benefit increases for future retirees. Here, however, Trump is threatening to pull the plug on current retirees, with no alternative funding mechanism (sort of like his effort to destroy Obamacare with no substitute). Biden, uncommonly for a Democrat, is doing very well with senior voters. With this issue, he might obliterate Trump with over-65 voters.
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