Trump on Social Security
Trump on Social Security: Change is on the cards. Despite vowing to protect Social Security, Trump’s proposed Social Security cuts are primarily dependent on the budget.
Supporters of the program worry that the recently released budget plans will have a specific adverse impact for beneficiaries, in particular for those on Social Security Disability Income (SSDI).
Why Are People Worrying About Trump on Social Security?
Millions of U.S. residents depend on Social Security benefits, which has encountered financial issues for a long time. Due to the number of retirees increasing, changes are needed to ensure funds are available to keep paying benefits at currently promised levels.
New rules proposed to change aspects of disability reviews meaning the method used to determine if a person qualifies for benefits could shift.
Those who are benefiting from the Disability Insurance (DI) Trust Fund and the Old-Age & Survivors Insurance (OASI) Trust Fund have become alarmed at the predicted future of depleting funds. Trustees have described in their annual report that combined trust funds will be exhausted by 2035, and people on the program could face up to 23% reduction.
Trump’s 2020 fiscal report proposed cutting $26 billion from Social Security over the course of the next 10 years. This is mainly by reducing SSDI back pay from twelve months to 6 months and changing application rules.
Trump’s administration intends to tighten qualification rules. U.S. Sen. Bob Casey (D., Pa.) said, “I have serious concerns about this proposed rule,” adding that it; “appears to be yet another attempt by the Trump administration to make it more difficult for people with disabilities to receive benefits.”
Will Trump Cut Social Security?
Initial proposals by Trump are unlikely to bear a resemblance to a passed spending bill. Although an indicator of which projects are essential to the President, budget cut proposals rarely finish off as planned. Additionally, presidential budgets are always in the spotlight and likely to be exaggerated by the media.
To pass any amendments to the Social Security Act, the head of the U.S. would need both houses of Congress to rally behind him, which is very unlikely to happen. To make any change, Trump would need Republicans to take back the House and win a considerable number of seats in the Senate.
Although no one knows with certainty if Trump will cut Social Security if he’s re-elected, he has potentially given us clues. CNBC co-anchor of Squawk Box, Joe Kernen, interviewed Trump at the World Economic Forum hosted in Davos, Switzerland, aired on January 22, 2020.
People were expecting to hear about the Environmental, Social and Governmental (ESG) issues, and much of the interview focused on this, yet, towards the end of the interview, Kernen asks, “Entitlements ever be on your plate”? Trump responds, “At some point, they will be.”
Historically, Republicans have backed the notion to raise the retirement age to seventy in a bid to cut benefits. Although Trump hasn’t mentioned this specifically, his administration has suggested amending the rules for SSDI.
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What Has Been Trump's Social Security Stance and Strategy?
The 45th President’s campaign before the election was in support of payouts to those who have worked hard and paid into the program. Back in 2013 at the Conservative Political Action Conference, he advised fellow Republicans to tread carefully on making significant changes to Social Security while wanting to win elections.
During his first three years, Trump has been reluctant to deal with Social Security concerns directly in fear of losing votes.
His introduction of the Tax Cuts and Jobs Act (TCJA), signed into law in December 2017, dropped the tax liability of nearly all working Americans and capped corporate tax rates at 21%. Primarily this stimulated economic growth through business expansion and increased consumer spending.
The more that workers earn, the more they pay into the Social Security program. As employment figures rise and businesses pay their workers more, tax collection becomes even more plentiful.
Three sources fund social Security. 12.4% tax on earned income, the interest that this income makes, and the taxation on benefits. The pillar of the fund comes from the tax on earnings up to $137,700 (in 2020) and in 2018 amounted to $885 billion of the $1 trillion collected.
The financial outlook appears to have improved as a result, and surprisingly the total cost of Social Security is projected to exceed total income for the first time since 1982, and a fund depletion date shifted to 2052.
Trump on Social Security
More than 16 million Americans could be affected if a change is made, and uncertainty is already bringing about confusion. Obtaining benefits is an extraordinarily difficult task already, sometimes taking beneficiaries years to complete many documents. With sustained declines in benefit applications, budget cuts, and changes to legislation, funds will be unstable. During the new election campaign, what will be important is to address a permanent solution to ensure long term Social Security funds are available to all who qualify and paid into the fund.
What are your thoughts on Trump’s Social Security plans? How could you be affected? Share your thoughts in the comments section below.