The Social Security administration’s chief actuary warned that President Donald Trump’s proposal to eliminate the payroll tax would deplete the Social Security trust fund within three years, CNN reports.
The analysis was released at the request of Senate Democrats, who asked the agency to assess the impact of Trump’s promise to eliminate payroll taxes if he is reelected.
"We will be, on the assumption I win, we are going to be terminating the payroll tax after the beginning of the new year," Trump said earlier this month.
Trump, of course, cannot single-handedly eliminate the payroll tax, only Congress can, and there is little support for the move, including from the president’s own party.
Benefits would run out quick:
The analysis showed that there would be “no ability to pay benefits” after the trust fund runs out in 2023.
Congress has cut payroll taxes in the past, under Obama for example, but Congress reimbursed the trust fund from the general revenue.
Treasury Secretary Steven Mnuchin has vowed that the department would similarly reimburse the administration for Trump’s executive order slashing payroll taxes, though those taxes would still have to be repaid next year.
"Many of our members consider it unfair to employees to make a decision that would force a big tax bill on them next year," the US Chamber of Commerce and more than 30 trade associations said in a letter to Congress. "It would also be unworkable to implement a system where employees make this decision.”
Some funds would be depleted even earlier:
In a letter to Senate Democrats, actuary Stephen Goss said that the Social Security’s Disability Insurance Trust Fund "would become permanently depleted in about the middle of the calendar year 2021, with no ability to pay DI benefits thereafter."
Goss noted that the analysis is hypothetical, given that there is no proposed legislation to slash the payroll tax.