Mar 26, 2020
Progressives are demanding that the Democrat-controlled House of Representatives prioritize removing a little-noticed provision in the massive Senate-passed coronavirus stimulus bill that would allow employers to stop paying into Social Security for at least the rest of the year--potentially threatening the program's long-term financial health.
"If Trump and Republicans retain power after November's elections, they will make sure that corporations never repay Social Security."
--Michael Phelan, Social Security Works
Section 2302 of the nearly 900-page legislation would let companies defer until next year their payment of the employer payroll tax, one of the primary funding mechanisms for Social Security. The bill would require that companies pay 50% of their owed 2020 payroll taxes by December 31, 2021.
While the section has thus far received little media attention, advocacy group Social Security Works said the language authorizes an "insidious attack" on the New Deal-era program and must be stripped out before final passage.
The House is expected to vote on the bill as early as Friday.
"The Democrats are walking right into the trap," Michael Phelan, deputy director of Social Security Works, warned in an email Wednesday night ahead of the Senate vote. "If Trump and Republicans retain power after November's elections, they will make sure that corporations never repay Social Security. Then, Republicans will use the reduced trust fund as an excuse to destroy our Social Security system."
"The only way to escape this trap is to avoid stepping into it in the first place," said Phelan. "That's why the House must remove the cut to Social Security's dedicated funding before this bill passes."
Social Security Works urged the public to call their representatives and pressure them to remove the employer payroll tax deferral:
\u201cThe Senate bill would let corporations stop paying into Social Security for the rest of the year. But the House can still fix it.\n\nCall your Rep. at 202-224-3121 TODAY. Tell them:\n\n1. Remove the cut to Social Security\u2019s funding\n\n2. Increase Social Security benefits by $200/month\u201d— Social Security Works (@Social Security Works) 1585166504
In a letter to senators last week, Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, denounced the proposal to defer employer payroll taxes as a serious threat to "Social Security's ability to pay future benefits to 64 million Americans."
"Social Security is an earned benefit fully funded by the contributions of workers throughout their working lives," said Richtman. "A payroll tax suspension or deferral chips away at that fundamental idea, making it easier each time it is enacted to turn to it again to meet some future crisis, until the payroll tax is permanently eliminated."
Linda Benesch, communications director for Social Security Works, told Common Dreams Thursday that whether or not the attack on Social Security is stripped from the Senate bill, the group plans to fight alongside its allies in the Congressional Progressive Caucus to ensure that an expansion of Social Security benefits is included in an expected fourth stimulus package.
Social Security Works president Nancy Altman last week called on Congress to adopt a proposal introduced by Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), and Senate Minority Leader Chuck Schumer (D-N.Y.) that would increase by $200 the monthly Social Security benefit for all recipients through the end of 2021.
"This will help beneficiaries afford housing, food, medicines, and other vital needs during this challenging time," said Altman. "As a byproduct, it showcases Social Security's efficiency and reach, which are so needed in this moment."
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