The federal government’s ability to pay Social Security benefits could stop by mid-2023 if President Donald Trump were to permanently terminate the payroll tax and not offer another revenue source, the chief actuary of the Social Security Administration said Monday.
The chief actuary, Stephen Goss, offered the prediction in a letter to a group of Senate Democrats who requested an analysis of what would happen if the payroll tax is eliminated with no other funding stream for Social Security benefits.
If that were to happen in January of next year, the Social Security Administration estimates that the Disability Insurance (DI) Trust Fund “asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter,” Goss said.
For the main Social Security Old Age and Survivors Insurance (OASI) Trust Fund for retired workers, Goss said that they predict reserves “would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.”
In a statement reacting to the estimate, Senate Minority Leader Chuck Schumer, D-N.Y., said “President Trump’s plan to eliminate Social Security’s dedicated funding would endanger seniors' Social Security and could mean the end of Social Security as we know it by 2023.”
House Speaker Nancy Pelosi, D-Calif., said that the analysis “shows the swift potential devastation of President Trump’s reckless call to ‘terminate’ the payroll tax: shattering the sacred promise of Social Security.”
The letter from Goss came in response to a request from Schumer and Sens. Bernie Sanders, I-Vt., and Ron Wyden, D-Ore., after Trump said he would permanently terminate the payroll tax cut if he’s re-elected in November.
Earlier this month, he said at a press conference in Bedminster, N.J., “If I’m victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax…I’m going to make them all permanent.”
Trump, however, wouldn’t be able to terminate the payroll tax unilaterally. Congress would have to pass legislation for that to happen, and with the makeup of the current Congress, the Democratic-controlled House would block any such proposal. A number of Republicans have also rejected calls for a payroll tax cut in the current Senate.
The president has said legislation to cut payroll taxes would specify that the money comes from the general fund. The SSA letter noted they were asked not to consider that scenario, which would not affect benefits. A measure to pull money from the general fund would be unlikely to pass under a divided Congress.