Herb Weiss: GOP Trial Balloon Called “Trojan Horse”
Monday, April 17, 2017
According to an Associated Press story, published on April 10, 2017, as the Trump Administration begins to learn from its failed attempt to repeal Obamacare, tax code reform is now on its agenda. One trial balloon, being floated by a GOP lobbyist with close ties to the Trump Administration, would eliminate the mandated payroll tax that all American workers pay to fund Social Security and Medicare.
“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 a lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations,” says Writers Josh Boak and Stephen Ohlemacher in their Associated Press story.
Currently, about 163 million American workers pay Social Security taxes and 59 million retired and/or disabled persons collect monthly benefits. About one family in four receive income from Social Security. The nation’s social insurance and welfare program is a “pay-as-you-go-program.” Today’s workers support the program by paying their taxes into the program and the money flows back out to the program’s current beneficiaries.
GOP Stealth Attack on Social Security
Responding to the GOP trial balloon, in her blog post published last Tuesday on the Huffington Post, a politically liberal American online news web site, Contributor Nancy Altman, President of Social Security Works called the GOP trial balloon “a Trojan horse”, noting that “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.”
If President Trump proposes “the Trojan horse, it would be the newest shot in the ongoing Republican war against Social Security. That war has failed so far. The American people overwhelmingly support Social Security because they appreciate that it provides working families with basic economic security when wages are lost as the result of death, disability, or old age. And it does so extremely efficiently, securely, fairly, and universally,” says Altman in her April 11, 2017 blog post.
According to Altman’s blog posting, after Trump and GOP lawmaker have suffered legislative defeats in their “frontal attacks” against Social Security to eliminate the programs “it appears they are contemplating a “stealth attack instead.” She noted, “In the 1980s, Republicans, who had long tried but failed to cut government programs directly, discovered a new tactic. They realized that they could undermine government and eventually force cuts to spending by cutting taxes and, in their words, starve the beast. Now, Trump is making plans to use that same tactic against Social Security.”
“Not only would the Trump proposal starve Social Security of dedicated revenue, it would ultimately destroy it. Social Security is not a government handout. It is wage insurance that the American people earn, as part of their compensation, and, indeed, pay for with deductions from their pay,” observed Altman.
Altman warns that GOP lobbyist’s proposal to eliminate the payroll tax to fund Social Security is consistent with Trump’s previous actions. “No one should be fooled by Trump’s campaign promise not to cut Social Security. Before he became a candidate, he called it a Ponzi scheme and advocated privatizing it. He chose, as his vice president, Mike Pence, who complained that the Bush privatization proposal didn’t go far enough, fast enough. As President, he has chosen a staunch opponent of Social Security, Mick Muvaney, as his budget director, and another staunch opponent, Tom Price, as Secretary of Health and Human Services (one of Social Security’s trustees.), she said.
In an email urging recipients to sign a petition to protect Social Security’s funding [the payroll tax], Michael Phelan, Deputy Director of Social Security Works noted, “For decades, Republicans in Washington and Wall Street bankers have told us that Social Security is going broke―even though Social Security has a $2.8 trillion surplus and can pay out 100% of benefits for the next 17 years and over 75% of benefits owed after that.” He warns the “Republican’s tax plans might be a self-fulfilling prophecy. By starving Social Security of funding, they could finally receive their wish―replacing Social Security’s guaranteed benefit with unstable Wall Street retirement plans.”
The “Great Wisdom” of a Payroll Contribution Tax
Max Richtman, President & CEO of the National Committee to Preserve Social Security and Medicare, says, “It’s no surprise that the GOP lobbyist who suggested this dangerous idea and remained anonymous. After all, who would want to own up to an idea that would trigger the collapse of the most successful government program in U.S. history?”
Richtman adds, “Peddling this kind of scheme reminds me of President George W. Bush’s 2005 privatization proposal. Only in this case, the risk factor shifts from the uncertainty of Wall Street to benefit cuts that will almost certainly occur when Social Security is forced to compete for government funding with other discretionary programs. There was great wisdom in President Roosevelt’s plan for funding Social Security through a dedicated payroll tax. As President Roosevelt said, ‘We put those payroll contributions there to give the contributors a legal, moral and political right to collect their pensions…No damn politician can ever scrap my social security program.”
Darrell West, Vice President and Director of Governance Studies at the Washington, D.C.-based the Brookings Institution, sees an uphill battle to formalize the tax policy to eliminate the payroll contribution to fund Social Security. “I don’t think Trump will be able to eliminate or reduce the Social Security tax because of its dire consequences for the program itself. The program is very popular with the general public and many recipients count it as their sole support. Republicans will get killed if they try to do this. It is not a viable option now or anytime in the near future.”
When Trump releases his tax code reform proposal, aging advocates must remember that the devil is in the details. Read the proposal thoroughly with a fine-tooth comb.
Herb Weiss, LRI’12 is a Pawtucket writer covering aging, health care and medical issues. To purchase Taking Charge: Collected Stories on Aging Boldly, a collection of 79 of his weekly commentaries, go to herbweiss.com.
Related Slideshow: The Power List - Health and Education, 2016
Russell Carey - A name few outside of Brown’s campus know, but Carey is the power source at the Providence Ivy League institution.
Today, his title is Executive Vice President and he has had almost every title at Brown short of President. Carey is a 1991 graduate of Brown and has never left College Hill.
While Brown’s President Christine Paxson — who is functionally invisible in Rhode Island — is managing alumni affairs and fundraising, Carey is influencing almost everything in Rhode Island.
Top Raimondo Appointment
Nicole Alexander-Scott - MD, MPH, and rock star in the making. As Director of the Rhode Island Department of Health, she is fast developing a reputation as someone in the Raimondo Administration who can get things done. Her counsel and leadership on developing a strategy on opioid addiction has been widely been lauded.
In addition, she has handled the mundane - from beach closings to food recalls - with competency. An expert in infectious disease, it may be time for her to become a strong leader on Zika.
Ronald Machtley - Bryant University's President rightfully deserves to be on a lot of lists, but what few understand is that Machtley’s influence extends far beyond Bryant’s campus in Smithfield. Machtley could make this list as a business leader or as a political force as much as for education.
Machtley is recognized for transforming Bryant University from a financially struggling regional college to a university with a national reputation for business.
Machtley serves on Amica’s Board and the Rhode Island Foundation, and also serves on the Board of Fantex Brands.
Larry Purtill - While Bob Walsh gets the face time as the Executive Director in the media for the NEA of Rhode Island, NEARI President Purtill tends to be the inside man who gets things done.
The teachers' largest union is formidable, but is still reeling from the beat down it took when Gina Raimondo’s pension reform cut the benefits of teachers disproportionately over other employee groups.
Make no mistake about it - not much happens in education in Rhode Island without Purtill's sign-off.
Mim Runey - While Rhode Islanders wait, and wait some more, for development on the 195 land, Johnson and Wale's University's Runey is watching it come to fruition, as JWU is set to open the first completed building on the former Interstate on September 1, when it will host a ribbon cutting for its John J. Bowen Center for Science and Innovation.
Under Runey, JWU continues to establish its foothold as one of the country's top schools for culinary training. Now Runey will oversee the addition of the new building on the old 195 which will house the university's School of Engineering and Design and its biology program.
In 2015, students from the School of Engineering & Design participated in the construction of the Holocaust Memorial on South Main Street, a collaboration between the Jewish Alliance of Greater Rhode Island and the Holocaust Education Resource Center of Rhode Island.
A true community partner in every sense, JWU under Runey's watchful eye is expanding to an even greater presence in Providence.
Chairman of the Board
Edwin J. Santos - The former banker is Chairman of the Board of CharterCare, after having been a top executive at Citizens Bank. He has been a board leader for Crossroads, Washington Trust, Rocky Hill School -- you name it and Santos has helped to lead it.
His best work to date just might be at CharterCare, where he has helped the once fledgling hospital (Roger Williams Medical Center) into a growing hospital system.
Weber Shill - He serves as the Chief Executive Officer of University Orthopedics, or in other words, dozens and dozens of oh-so-confident docs.
Shill has a background in Engineering and a Masters in Business Administration from the Whitemore School at the University of New Hampshire. Experienced in managing medical groups, but this group is big and influential.
Timothy Babineau - President and CEO of Lifespan, Rhode Island's biggest healthcare organization, where financial challenges make the job that much more complicated.
Now, the critics (GoLocalProv included) are raising concerns about the multi- billion dollar organization's refusal to make any contribution to the City of Providence. Lifespan is like General Motors, big and hard to innovate the organization.
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