I want to pick up on what you just said: that if the president's re-elected he would like to cut the payroll tax. The payroll tax is what finances Social Security. The payroll tax is what finances Medicare. Democrats are now saying if President Trump is re-elected he's going to gut those programs because he's going to gut the tax that pays for them.
Chris, that's not the case. There would be an automatic contribution from the general fund to those trust funds. The president in no way wants to harm those trust funds. So, they'd be reimbursed just as they've always been in the past when we've done these types of things...
I just to be clear here though the Democrats are saying the result of a payroll tax cut is, it would mean a cut in benefits for Social Security and Medicare, to which you say"
That's just factually inaccurate. There'd be no reduction to those benefits and the president's made that very clear.
Trump and Mnuchin are asserting here, contrary to the dominant left-right common wisdom, that terminating the tax does not mean terminating the program . And they are right. It is true that, economically, these social programs do not depend on payroll tax contributions to the trust funds.
For whatever opportunistic reasons and however fragmentarily, they have opened the door for questioning the "payroll tax/trust fund" structure, which is actually a weak and failing line of defense for SS&M that must be abandoned. The better response of the left is not to reflexively reject what they are saying, but to say "You're right. The tax isn't necessary," and take the discussion in a much more productive direction.
If you don't like admitting that these execrable characters are right, take it from FDR, who, as mentioned above, invented the whole payroll-tax/trust-fund scheme. When challenged on it, he openly acknowledged it was a fiction (what I called, in a previous article, the Roosevelt Ruse). Here's the full quote excerpted above (new parts highlighted):
I guess you're right on the economics. They are politics all the way through . We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren't a matter of economics, they're straight politics.
So, FDR himself knew and said that payroll taxes are an economically unnecessary political device, which he thought would protect Social Security from conservative attacks.
How's that working out? Has the payroll tax stopped those attacks? Or hasn't it, disliked and regressive as it is become, not the potent armor it was supposed to be, but the Achilles heel in programs like SS&M? Hasn't it been the easiest target, inviting incessant and "popular" sniping by the right?
In fact, as Alan Nasser has shown, in his informative article, How Franklin D. Roosevelt Botched Social Security, FDR set up the payroll-tax/trust-fund scheme the way he did not just to mollify other conservatives, but because it reflected his own conservative mindset on such matters:
Roosevelt wanted to design Social Security in such a way as "to preserve the system of private enterprise for profit "[and] compete as little as possible with private enterprises." The program was to "embody to as great an extent as possible the principles of capitalism. To Roosevelt, this meant that a plan" must conform as closely as possible to the existing system of private insurance; " Social Security was made to inhabit and accommodate itself to the space within which private profit is made. [It] required, then, an economic counterpart to the private individual insurance premium" the payroll tax, a deduction from the wage.
Thus, despite any pretension that it's a talisman against the right, the payroll-tax/trust-fund scheme is intrinsically conservative in design, and everyone defending it is supporting a fundamentally conservative fiscal arrangement. It's another example of adopting a conservative framing in the hope that it will keep conservatives at bay. How has that ever worked out?
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