On its face, the Biden campaign’s latest ad could reasonably be accused of fear-mongering about Social Security, doing so in the time-hallowed way that campaigns have adopted for a couple of decades–but for the fact that all of the ad’s claims are … wait for it … accurate.
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As the Washington Post’s Paul Waldman put it,
If he wins the election, Trump vowed, he will “terminate the payroll tax.” He added: “We’ll be paying into Social Security through the general fund.”
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The Biden ad assumes that Trump would eliminate the employee half of the payroll tax (it’s paid equally by employers and employees), which would indeed render the program unable to pay all its benefits in just a few years.
I should say at this point that even if Trump is never going to do this, and even if Biden is being accurate in how he characterizes what Trump is proposing, this comes after years of conservative fearmongering about the fate of Social Security, in particular the inaccurate idea that in a short time it will “go broke.”
For the record, before the local troll gets excited, here’s my view on Social Security:
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We should start now — ideally should have started yesterday — to make plans to properly fund Social Security into the demographic future.
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In an ideal world, we’d actually do some form of what Trump proposed: kill the employee portion of the tax, which is regressive, and fund SSA out of general revenues, which are less regressive. But we don’t live in an ideal world, and that strategy would risk exposing Social Security to cuts as it competes with other priorities. And the GOP has long been supported cuts to Social Security to pay for the 1%’s tax cuts (under the guise of balancing the budget), so if Social Security funding falls into the general fund, its likely in trouble, and very likely in trouble if Mitch McConnel still controls the Senate, and never more so than in the coming years if and when we decide to pay off some of the Trump deficit.
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Thus, a second-best solution would be to lift the cap on the tax, so that wages above the first $137,700 of annual income get taxed at the same rate (or higher?) than wages to less-well-paid workers. To the extent that this wouldn’t fill the gap — an extent that would depend on how soon we start it — we should earmark some other progressive tax to make up any shortfall.
Considering that the money supply is based on a fiscal fiat policy, we could simply create a 100 trillion dollar coin that gets deposited in the bank and fixes the problem overnight.
I really should be employed by a think tank, for serious.
Too late – see Modern Monetary Theory.
Or we could reinstate an effective estate tax and fund social security from it. At the current exemption level, a 3% annual return on the maximum entirely-exempt state throws off over $350,000 in income. That’s… more than enough. After all, if we have to ensure that the working class that has been put out of work by COVID-19 doesn’t become deincentivized to return to work from an extra $31,200 (if the extra $600 per week extended for an entire year), surely we don’t want the generally better-educated children of the 1% to be deincentivized by ten times that amount?
I don’t think I need a sarcasm tag anywhere there, do I?