A Big Day for Trump’s Budget Pick, Social Security — and Millionaires
A full Senate vote is expected today on Donald Trump’s pick for White House Budget Director, Rep. Mick Mulvaney. That means that Mulvaney’s nomination could come up for a vote just as a group of lawmakers and experts are speaking on the Hill in support of Social Security — and on the same day that millionaires stop paying their Social Security taxes.
The timing is interesting, since Mulvaney has been trying to cut Social Security for years.
An Extreme Right-Winger for Trump’s Budget Head
Mulvaney, a steely-eyed tea partier from South Carolina, was first elected to Congress in 2010. He co-founded the extremist “Freedom Caucus” that forced Republican House Speaker John Boehner from power and has pressured his successor, Paul Ryan, to adopt even more conservative positions. (Both Boehner and Ryan were well to the right of mainstream opinion on economic issues, according to polls — but that wasn’t enough for Mulvaney.)
The “Cut, Cap and Balance” Act Mulvaney supported in 2011 was, at its heart, an attempt to limit government’s role in American life. Its provisions would have forced reductions in everything from antipoverty programs to public safety and the national defense.
Medicare is also in Mulvaney’s sights. He once said, “We have to end Medicare as we know it.”
Mulvaney supports means-testing Medicare benefits, a costly move that would save very little money unless the cutoff for eligibility was lowered to include a significant number of middle-class recipients.
Mulvaney for Millionaires
After today, Thursday, February 16, people with million-dollar salaries will stop paying the Social Security payroll tax for the year. The annually adjusted payroll tax cap is $127,200 this year. No one earning more than that pay Social Security taxes for the income they take home in excess of the cap. For bigger earners, including Trump himself, the tax holiday comes much earlier.
If all goes as planned, Mick Mulvaney will become Director of the Office of Management and Budget (OMB) on the very day that someone with a $1 million yearly salary stops paying into the Social Security trust fund.
But Mulvaney hasn’t been trying to get millionaires to pay their fair share for Social Security. Instead, he’s been busy trying to cut benefits for everyone else, saying, “You have to raise the retirement age, lower a pay-out, change the reimbursement system.”
Millionaires, on the other hand, should be happy with Mulvaney’s ideology. He insists that additional tax cuts for corporations and the wealthy will generate economic growth and greater tax revenues — an idea that most economists agree has been conclusively disproved by the experience of recent decades.
Between the end of their payroll taxes for the year, and Mulvaney’s possible confirmation, Thursday could turn out to be an especially pleasant day for millionaires.
As OMB Director, it would be Mulvaney’s responsibility to explain the financial implications of budget choices to the president. That makes Mulvaney’s habit of describing Social Security as a “Ponzi scheme” especially disturbing. It reveals a basic lack of financial literacy.
The term “Ponzi scheme” has a clear definition, one that bears no relationship to social insurance programs like Social Security. Mulvaney’s insistence on using the term “also reveals a deep hostility to Social Security, which should worry every American.
Mulvaney also said “we will never, ever balance the budget until we change entitlements.” (“Entitlements” is a preferred Republican term for Medicare and Social Security, presumably because it subtly conveys a sense of unearned privilege. More on that subject here.)
This statement also betrays a certain lack of fiscal knowledge, since Social Security is forbidden by law from contributing to federal deficits.
Tough on Seniors, Even Tougher on Senior Women
Social Security benefits are low by international standards, which means that the benefit cuts Mulvaney backs would be a blow for many of the seniors, disabled, and children who receive its benefits.
Social Security currently pays an average of $17,106 to men, and $13,150 to women, over the age of 65. Benefit cuts, especially when combined with cuts to Medicare, would hit seniors hard. They would be especially hard on women, since they already receive less in benefits than men.
But then, women’s health doesn’t seem to be a concern for Mulvaney either. In 2015, he led a revolt against the Republican leadership in an attempt to defund Planned Parenthood, even though none of its federal funding is used to pay for abortions. The Congressional Budget Office (CBO) concluded that Mulvaney’s anti-Planned Parenthood effort would have cost the government $130 million over 10 years had it been successful.
For this self-proclaimed deficit hawk, it looks like ideology trumps thrift.
Hypocrisy on the Home Front
Social Security already operates much more cost-effectively than private sector retirement programs, spending less than 1 percent of its total budget on administrative costs. But Mick Mulvaney, like many other Congressional Republicans, has voted to keep cutting its administrative budget year after year.
You wouldn’t know it by looking at the Social Security page on Mulvaney’s website, where he paints himself as eager to ease the administrative burden of filing disability claims. “I am always happy to help constituents who need assistance with a disability claim,” the website says. “However, there are limits to what I can do.”
Those limits became more pronounced when Mulvaney and his fellow Republicans voted for additional cuts to the Social Security Administration budget. They continued to vote for cuts even after the waiting list for disability hearings soared to 1.1 million people and wait times rose to more than 500 days.
Mulvaney still isn’t satisfied. He introduced a bill in 2011 which would have reduced government staffing by two-thirds through attrition — a fact you won’t find on his website’s Social Security page.
Fighting Against the Elderly
Donald Trump said repeatedly that he would not cut Medicare and Social Security while he was running for president. But Mulvaney has already made it clear that he plans to use his new position to push for cuts.
“It’s going to take difficult decisions today in order to avoid nearly impossible ones tomorrow,” Mulvaney told the Senate Budget Committee.
(It’s striking how often people with generous government pension plans talk about the “difficult decisions” they want to make, when all the difficulty will fall on people less fortunate than themselves.)
“I have to imagine that the president knew what he was getting when he asked me to fill this role,” Mulvaney has said. He’s probably right.
House Republicans, not satisfied with gutting Americans’ retirement security at the federal level, are now working to ensure that states can’t address our nation’s retirement crisis either. Apparently their rhetoric about states’ rights and their professed concern for Social Security recipients take a back seat to their anti-government hostility and the financial interests of their Wall Street funders.
Will Mulvaney Make It?
As of this writing, Mulvaney’s nomination is not a sure thing. If he doesn’t make it, chances are it will be because his anti-government zeal includes one area that his party usually considers off-limits: the military budget.
“You’ve spent your entire congressional career pitting the debt against the military,” Sen. John McCain (R-AZ) told Mulvaney during his testimony. “I am deeply concerned about your lack of support for our military.”
Sen. Thad Cochran (R-MI) has indicated he may oppose Mulvaney for the same reason. If he does, and if another Republican joins them, Mulvaney’s nomination will fail.
“We have a president who ran on a set of principles that he would not cut Social Security and Medicare and Medicaid,” said Sen. Bernie Sanders, “yet he is nominating someone whose views are very, very different.”
Added Sanders: “I have a real problem with that.”
That’s the right reason to oppose Mulvaney’s nomination. Sanders will be speaking at Thursday’s event, along with Sen. Ron Wyden and Reps. Jan Schakowsky, Peter de Fazio, and Raúl Grijalva.
Meanwhile, the question remains: On the day that millionaires get a pass from paying Social Security taxes, will they also get a special gift from the Republican Senate: Mick Mulvaney’s confirmation?