Apparently When Trump Said He Wouldn’t Cut Social Security, This Wasn’t Meant Literally
One canard of Trump apologists during the election was ‘The media takes Trump literally but not seriously, but his supporters take him seriously but not literally.’
In truth you can’t take someone who wants to be President seriously without taking them literally. And it’s clear that as an-illegitimate-POTUS, Trump meant many things he said literally.
But not everything. When he said he wouldn’t touch Social Security, Medicare, and Medicaid, he clearly didn’t mean that literally. His healthcare bill that polled at 17% cut 24 million off of health insurance and 14 million off of Medicare. It also cut $880 billion dollars out of Medicaid.
For that matter it also cut a number of ‘essential benefits’ covered by the health insurance people get with their employer. Considering 150 million people get employer health insurance, it’s no surprise that his bill got 17%.
Now he is reportedly looking at a stealth cut to Social Security.
“President Donald Trump, who campaigned on a promise not to cut Social Security, is reportedly considering a plan to eliminate much of the payroll tax that funds the critical safety net program.”
“According to the Associated Press on Monday, the proposal is being floated as the Trump administration goes “back to the drawing board in a search for Republican consensus behind legislation to overhaul the U.S. tax system.”
“The AP reported that one option “circulating this past week would change the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security.”
“And that, Zaid Jilani wrote at The Intercept, “would require counting on Trump’s economic team to shepherd a solution through Congress—and for Congress to treat Social Security unlike other ‘discretionary’ general-fund programs whose budgets rise and fall with political currents.”
That is the key. On the face of it, a cut in payroll taxes might seem attractive to many workers. After all, for low or modest income people, the payroll tax takes the biggest bite out of their take home pay every week.
The catch though is transforming SS from an entitlement to a another discretionary program the GOP Congress if free to defund.
Clearly that’s not worth the tax cut. To be sure, if Trump were to cut payroll taxes it’d probably come from the employer side anyway.
If you wanted to cut the payroll tax, then, the best way would be to raise the cap on those with high incomes while cutting the tax for the low income.
“The change, proposed by a GOP lobbyist with close ties to the Trump administration, would transform [Texas Republican Rep. Kevin] Brady’s plan on imports into something closer to a value-added tax by also eliminating the deduction of labor expenses. This would bring it in line with WTO rules and generate an additional $12 trillion over 10 years, according to budget estimates. Those additional revenues could then enable the end of the 12.4 percent payroll tax, split evenly between employers and employees, that funds Social Security, while keeping the health insurance payroll tax in place.”
“This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security, according to the lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations.”
“Although some billed this as a bipartisan solution, and President Barack Obama did temporarily cut the payroll tax after the Great Recession, others note it probably would run into firm opposition from Democrats who are loath to be seen as undermining Social Security.”
“Furthermore,” Jilani noted, “the rumored mechanism for making up the lost funding…would hit workers the hardest.”
Value-added taxes and consumption taxes are a couple of really bad ideas in vogue on the Right currently.
“A value-added tax “would increase the cost of goods and services,” Jilani explained, citing Paul N. Van de Water, a senior fellow at the left-leaning Center for Budget and Policy Priorities, “arguably canceling out the value of the reduced payroll tax for most lower- and middle-class workers.”
In a column on Monday, Michael Hiltzik of the Los Angeles Times described the plan as “an absolutely terrible idea, partially because it smells like a back-door way of cutting Social Security benefits. It needs to be nipped in the bud.”
“Indeed, Nancy Altman, president of the advocacy group Social Security Works, called the scheme “a Trojan horse: It appears to be a gift, in the form of middle class tax relief, but would, if enacted, lead to the destruction of working Americans’ fundamental economic security.”
But it does have the advantage politically as being sold as middle class tax relief. So we need to be prepared for this backdoor attack on Social Security.
Maybe the best way to figure out if Trump is to be taken literally is if it sounds like a half way decent idea. Then he didn’t mean it literally. Like Medicare negotiating drug prices, healthcare for everybody, a wealth tax, and not going to war in Syria. Or not playing so much golf
P.S. As we saw in my poll out last week, the long awaited poll results are in, and right now I’m just 11 points down vs. Peter King (GOP-NY-District 2). And the voters don’t even know who I am yet.
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