With President Donald Trump reportedly telling Republican lawmakers in private he will not sign Covid-19 relief legislation that doesn't include a cut to the payroll tax—the primary funding mechanism for Social Security—advocacy groups urged Congress to "call Trump's bluff" and pass a stimulus bill free of any stealth attacks on the New Deal program.
"Cutting Social Security contributions advances a longstanding right-wing ideological goal: Weakening our Social Security system," Nancy Altman, president of Social Security Works, said in a statement late Thursday. "Congress must not give into Trump's hostage-taking."
"Payroll contributions are Social Security and Medicare's dedicated funding. A 'payroll tax cut' is a Trojan Horse for cutting earned benefits."
—Social Security Works
"The coronavirus pandemic is raging across America," Altman said. "Essential workers are in desperate need of tests and personal protective equipment (PPE). Millions of Americans are at risk of eviction. Over 57,000 nursing home residents and workers are dead. Hospitals are in danger of becoming overwhelmed. Donald Trump is doing nothing to address any of this."
Trump's veto threat comes days before Senate Majority Leader Mitch McConnell (R-Ky.) is set to kick off formal negotiations with his Democratic counterparts and the White House over the next coronavirus stimulus package. McConnell, whose office is writing the relief bill, has not said whether he supports the inclusion of a payroll tax cut, which Politico characterized as a "new red line from the White House."
White House spokesman Judd Deere said in a statement Thursday that Trump believes a payroll tax holiday "must be part of any phase four package."
The talks will begin less than a week before the $600-per-week boost in unemployment benefits enacted by previous stimulus legislation is set to expire, causing a rapid and massive fall in income for more than 30 million Americans.
Economists have repeatedly pointed out that cutting the payroll tax—an idea Trump has been obsessed with for months—would do nothing for the unemployed and very little to stimulate the economy, which remains in deep recession. During a press briefing in April, Trump said he "would love to see a payroll tax cut" and added that "there are many people who would like to see it as a permanent tax cut."
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"A payroll tax cut would do nothing to help the 20 million workers who have lost their jobs, and little for those working significantly reduced hours," Sen. Ron Wyden (D-Ore.) told the Washington Post. "Another payroll tax cut for employers would also shower the country's wealthiest corporations with billions of dollars."
Payroll contributions are Social Security and Medicare's dedicated funding.— SocialSecurityWorks (@SSWorks) July 16, 2020
A "payroll tax cut" is a Trojan Horse for cutting earned benefits. https://t.co/DAl2KvqzGO
As the Post reported Thursday, "House Speaker Nancy Pelosi (Calif.) and other Democrats have repeatedly voiced opposition to a payroll tax cut."
"If included in McConnell's bill, or demanded by the White House, it would become just one more point of contention between the two parties," the Post noted. "Democrats and Republicans are already at odds over multiple issues, including liability protections for businesses and others that McConnell says must be in the bill; enhanced unemployment insurance that is expiring in late July; whether to send more aid to cities and states; and how much funding for education to include and whether to tie it to schools reopening."
Rep. John Larson (D-Conn.), chairman of the House Ways and Means Social Security Subcommittee, warned Congress against caving to the Trump administration's demand for a payroll tax holiday.
"Beware of the payroll tax cut!" Larson tweeted. "It is just the administration's attempt to cut Social Security and Medicare."