You are being used as a pawn in the debate over Social Security – rely only on the facts🤥

Here is a quote from an op-Ed in Des Moines Register: “A reminder on how Social Security works: Money comes in through payroll (FICA) contributions from about 178 million workers. The money coming in is used to pay monthly benefits to over 64 million Americans. The surplus is used to pay the administrative costs of running the program (salaries, buildings, equipment, etc.) and the rest is saved and invested in special issue Treasury bonds.”

That’s how Social Security worked in the past. Today there is no surplus. Today there is no “rest is saved.”

The op-Ed implies that the Trump suggestion to defer and then forgive the Social Security payroll taxes for some lower income workers will destroy Social Security.

Only Congress has the power to forgive or permanently change the Social Security taxes.

To continue paying benefits, beginning in 2021 the Trust will start redeeming its Treasury bonds. That’s because running the program will cost more than all its revenue from payroll taxes, income taxes on SS benefits and interest income on the Treasury bonds.

Redeeming the bonds means the federal government must come up with the cash to provide the SS trust.

When you read that Social Security is running out of money it means that around 2034 all the Treasury bonds will have been redeemed and used to pay benefits, the interest income on those bonds is gone and what remains to pay benefits is the revenue from payroll taxes and the income taxes on SS benefits.

That’s why only 76% +- of earned benefits can be paid at some point.

But here is the thing, Congress has been told all of what’s coming through the annual Trustee reports for over a decade … and one Congress after another has ignored the warnings and the Trustee urgings to act sooner rather than later.

And that is the truth‼️

24 comments

  1. Mr. Quinn, I think Mr. Wilson is getting the better of you in this argument. I can easily see Trump and a Republican Senate draining Social Security and refusing to fund it. I think you are badly underestimating the risk of this. You state, “The reality is that worst case Congress will act sooner than the 2034 crisis coming it has caused. NO politician will ever allow benefits to decline for anyone.” I don’t believe that for a New York minute.

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    1. Well, Trump and Republican Senate still can’t do it. If any party allowed SS to be depleted and to eliminate funding, it would create an unimaginable crisis and not just for 20% of the US population. That is not happening. Why aren’t we upset that for 30 years plus Congress has let the fiscal state of the program steadily decline?

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  2. Mr. Quinn – acknowledging your superior knowledge on all things concerning Social Security and healthcare, please advise if the following statements are true or false?
    Donald Trump’s assault on Social Security’s funding takes effect today.

    On Friday, the IRS issued guidance for corporations not to withhold Social Security contributions from paychecks starting today, September 1st, through the end of the year.[1]

    Trump advisor Larry Kudlow went on Fox Business this morning and tipped that Trump would issue another order later this year that would continue the deferral indefinitely.[2] This is how Social Security dies.

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    1. Using the word “assault” is purely political. The idea of a tax deferral is stupid. Many employers don’t want any part of it and neither should workers. I don’t know if “indefinite” deferral is even legal since that sounds like the job of Congress. In my opinion there is no politician, not even Trump, dumb enough to actually attack SS. The real is is that Congress for decades has ignored the need to make it sustainable.

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      1. I didn’t see a “true” or “false” in your response? Which is it? You have said in the past that no politician would be dumb enough to attack SS, but Trump obviously is that dumb and that desperate. And, I’ll give you good odds that most Trumpists don’t know what “FICA” means on their check stub.

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      2. I don’t think most people know what it means and most people won’t even notice that the tax has not been taken just as happened when Obama did it. The reality is that worst case Congress will act sooner than the 2034 crisis coming it has caused. NO politician will ever allow benefits to decline for anyone. EVER. it’s all politics.

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      3. I think that you are failing to realize that Trump so desperate to win reelection that he will do anything to win.  His incompetence has already caused the death of 180,000+ Americans from Covid-19. (Somebody told Trump that Covid-19 kills more people with black and brown skin than people with white skin so he stopped all efforts to combat the pandemic) Trump’s desperation stems from the fact that the SDNY can and will prosecute him if he loses, for bank fraud and insurance fraud to name only a few of his crimes. The statute of limitations will protect him if he wins a second term.  In addition, it’s only a matter of time before Cy Vance of the SDNY obtains Trump’s tax returns and other financial information which will explain why he has and still is selling out America to Vladimir Putin.

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      4. I think like many liberal anti-Trumpsters you need to take a step back and look at the long-term big picture. Trump may be desperate as you say, but then why would he alienate the senior voting block, the very people who vote the most? Logically, you know that the failure of pandemic leadership did not cause the deaths of 180,000 Americans. That’s like saying if Trump was not president there would be no deaths. That is completely illogical, but makes good press. Even the angst over SS is silly. If Trump did what he says, if the trust depletion date were accelerated ten years, Congress would simply fix it just like it will do before the 2034 depletion date long projected. Despise Trump and his followers, but stay logical and ignore the rhetoric.

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      5. If you are not well enough informed to know all of the facts from January 2020 to the present regarding Trump’s failure of leadership combating the pandemic, you should not comment on that issue and stick to SS and healthcare. I don’t have the time to write all of the facts from January to the present time for you. If you’re going to comment, please do your homework first. It’s not about logic or illogic. All of my conclusions and comments are based upon irrefutable facts!

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      6. So, it’s a fact that Trump or any president or any actions taken could have avoided ALL 180,000 + COVID deaths? You do recall that back in January, February and early March politicians in both parties were downplaying the threat, saying it was not more than a bad cold and urging us to go about our business. You are sadly proving my point.

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      7. I never said Trump did not mishandle the crisis or denied he provided little or no leadership to address the matter. That is not in doubt. What is in doubt and simply not a fact is that what he didn’t do resulted in 180,000 + deaths. You made that conclusion and that is not fact. The deaths may well have been lower, assuming individuals followed guidelines, but certainly no where near zero. Even in states where there was a strong response such as NJ, NY and Mass there were and still are deaths. And in those states and others people continue to violate the rules and continue to spread the disease.Stupidity comes in many forms.

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      8. Nope, not all of them, but he is certainly behaving like he is guilty of causing thousands of deaths and he knows it:
        Trump is trying to suppress the truth about the coronavirus. The White House is instructing hospitals to report cases to the Department of Health and Human Services rather than to the CDC.

        Trump has muzzled the federal government’s most prominent and trusted virologist, Dr. Anthony Fauci, while the White House tries to discredit him. In the upcoming coronavirus relief bill, Trump doesn’t even want to fund more testing and tracing, or the CDC.

        After railing against the CDC’s guidelines for reopening schools as “very tough [and] expensive,” Trump this week pressured the CDC to issue more lax guidelines, some of which were written by White House officials instead of CDC experts. Ironically, the school attended by Trump’s son, Barron, will not reopen because it wants to protect students from the virus. Funny how that works.

        The good news is, no matter how hard he tries, Trump won’t be able to shift public attention from the virus to the streets of America. The violence he’s trying to fuel and exaggerate will not distract them from the deadliness of Covid-19, which is worsening by the day, especially in Texas, Florida, and other states that went for Trump in 2016.

        His blatant failure to contain the virus is causing people to die. It’s only a matter of time until the people hold his deadly incompetence accountable at the ballot box.

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    2. Back when Trump issued his executive order, I finally was able to find it and read it (link down below). It only deferred the withholding of the taxes until the end of the year. It also required the treasury secretary to seek legislative solutions to make it permanent. I also read and I might have hear him actually say it that if he get re-elected he would make it permanent. The only way he could do that is have the law change. Congress will never get rid of social security. They can’t even agree that it needs to be fixed.

      Yesterday, I believe it was USAToday had an article how business trade groups are telling their members not to defer withholding the taxes because in January they have to come up with all the cash to pay back the deferral. What little extra money the workers would see today they would be missing that much more at the start of the year. Plus the businesses have to deal with the extra administrative paperwork to keep it all straight.

      I looked up the IRS news release and they issued Notice 2020-65 last Friday (Aug 28,2020) (link down below). It was written by lawyers and is confusing. But the way I read it an employer can defer the 4th qtr withholding but then has to collect it during the 1st qtr of 2021 plus the normal withholding (without interest or penalties).

      https://www.federalregister.gov/documents/2020/08/13/2020-17899/deferring-payroll-tax-obligations-in-light-of-the-ongoing-covid-19-disaster

      Click to access n-20-65.pdf

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      1. Thanks for the information, Dwayne. If only Congress can make such a change, as Mr. Quinn stated, then why did the IRS issue this notice?

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    3. Wilson – You cannot really believe that President Trump caused all the deaths of people who died with Covid as listed by the CDC. Most of these people had underlying health issues that was the true cause of their death. Please put the numbers in perspective – since Jan 1, 2020 1,953,700 have died from all causes in the US.. With Covid deaths accounting for just 9.3 percent. Also, we will never know the true number of with Covid deaths because hospitals get paid more money if they list a death as with Covid, not from Covid. We are all being played by the politicians and the MSM in an election year. Just remember what Mark Twain said- “If voting made any real difference, they would not let us do it Or what Stalin said – “It is not important who votes, but what is important is who counts the votes.” The only one responsible for a better life experience is me, with a lot of help from GOD. I have been watching the DC Circus since 1974 when I finished High School and you cannot rely on a corrupt government of political elites to keep their promises for very long.

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  3. Everyone, Congress and the President, have known about Social Security and Medicare Part A Hospital Insurance Trust Fund Solvency issues for many decades, not “over a decade”. They knew the 1983 Amendments, to barely stave off exhaustion of trust fund dollars, were insufficient to create long term solvency.

    That was apparent less than a decade later when President Clinton convened a blue ribbon panel. Then, it was George W. Bush. President Obama noticed, talked about it, but did nothing.
    – November 5th, 1993: President Bill Clinton, by Executive Order #12878, created the Bipartisan Commission on Entitlement Reform (the Danforth Commission) to evaluate entitlement programs – specifically Social Security and Medicare. The Commission never reached consensus and couldn’t get all members to agree on even an Interim Report. Subsets of the commission members made their own proposals. None gained any traction, nor action. See: http://www.presidency.ucsb.edu/ws/index.php?pid=61571

    – February 5, 2005: President George W. Bush made a reform recommendation to add personal accounts and change the COLA. These proposals triggered great criticism, and no action was taken. See: https://georgewbush-whitehouse.archives.gov/infocus/social-security/ See also: https://georgewbush-whitehouse.archives.gov/news/releases/2005/04/200504

    – April 27, 2010: The bipartisan National Commission on Fiscal Responsibility and Reform (often called Simpson-Bowles) met to recommend fiscal reform, including recommendations to reform Social Security. Despite widespread popular support, the report failed to get enough support to send it to Congress for approval.
    June 1, 2016: President Barack Obama, nearing the end of this second term, reminded us that Social Security’s finances needed strengthening. “We should be strengthening Social Security… it’s time we finally made Social Security more generous and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned.” No proposal was ever made. See: https://obamawhitehouse.archives.gov/the-press-office/2016/06/01/remarks

    – 2017 GAO report echoes President Obama: “… (we) better ensure a secure and adequate retirement, with dignity, for all.” But, it offers no plan of action other than another committee. GAO-18-111SP, “The Nation’s Retirement System: A Comprehensive Re-evaluation Is Needed to Better Promote Future Retirement Security” (https://www.gao.gov/assets/690/687797.pdf).

    They won’t correct funding shortfalls unless somehow we can show them how to buy votes with the changes.

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