09/24/2020 | Press release | Distributed by Public on 09/24/2020 15:51
Washington, D.C. - Today, House Ways and Means Social Security Subcommittee Chairman John B. Larson (CT-01) held a hearing titled 'Save Our Social Security Now ' on President Trump's executive action to defer payroll taxes. This is the first step towards defunding, dismantling, and destroying Social Security.
'Today's hearing underscores the urgency; we must block the President's efforts to defund, dismantle, and terminateSocial Security. Our witnesses made it clear how vital Social Security is to all Americans.
'Social Security was the signature plan of President Roosevelt that lifted Americans out of the Depression, provided them with financial security, and remains the number one anti-poverty program for Americans. It does so by providing our citizens with the dignity they deserve and have paid for throughout their working lives. This is a vital compact between citizens and government. It is the sacred trust they have come to rely on, Social Security,' said Larson.
'I want to emphasize that Social Security benefits are earned benefits, based on contributions that workers make with each and every paycheck. And that fundamental principle is what gives Social Security its strength, because everyone knows they have a shared stake in this program. And we do: each and every one of us has a stake in Social Security, because we've paid into it.
'And so, when some on the other side of the aisle talk about 'terminating' Social Security's payroll contributions, they are threatening the very existence of this bedrock program. What's more, deferring payroll contributions fails to help those most in need of support at this critical time in our nation's history,' said Ways and Means Chairman RichardE.Neal during the hearing.
'At best, what the president is talking about comes down to shifting people's taxpaymentsaround instead of giving them needed financial support. It's exactly the kind of economic gimmick you'd expect from a real estate mogul known for stiffing his contractors out of money he owed them. His proposal amounts to selling people their own money, and as a deferral, the debt will come due in 2021 when people get hit with an additional tax bill. That's why hardly any major employers have taken Trump up on this offer. That's the best case scenario for this dud of a proposal. A tax deferral juicing people's paychecks for a few months at most. But the president made it clear in his ballroom speech that he doesn't want to stop with a temporary deferral. He said, 'If I'm victorious on November 3rd, I plan to forgive these taxes and make permanent cuts to the payroll tax.' With a permanent payroll tax cut the president revealed that what he's after is a permanent cut in Social Security funding,' testified Senate Finance Committee Ranking Member Ron Wyden.
'When a parent dies or is disabled, his or her children benefit from Social Security survivor or disability benefits - benefits that the parent earned. My Congressional Districts has one of the highest rates of grandparents raising grandchildren in the country. I know how critical Social Security is to keeping retirees and young children out of poverty. I see the tears of relief when people learn that the payments made to Social Security from decades of paychecks can provide the help they so desperately need, insurance they could never have afforded otherwise,' testified House Ways and Means Worker and Family Support Subcommittee Chairman Danny K. Davis.
'The essential labor force is disproportionately made up of Latinx workers. They don't have the option of working from home. Latinx workers keep our hospitals, nursing homes, sanitation services, and our food supply functioning. They do all of this while managing higher rates of preexisting conditions that make them more susceptible to COVID-19. While essential Latinx workers must put themselves in harm's way on a daily basis, the rest of our community is hurting from higher rates of layoffs and reduced wages. That's because Latinx workers also make up a disproportionate share of the labor force in industries most affected by the pandemic. The countless Latinx workers in higher wage sectors still face pay disparities that result in lower lifetime earnings than their white counterparts. As a result, every Latinx worker's contribution to Social Security is all the more critical to their retirement. Families need real help, and they need it now. Instead, all they got was a cut to their unemployment benefits and a payroll tax deferral that no one asked for. If it weren't a matter of life and death, deferring taxes on nonexistent or sharply reduced wages would be laughable. What good is a payroll tax cut when you don't have the ability to earn a paycheck?' testified Rep. Linda T. Sánchez.
'Today, we are in the midst of an unprecedented pandemic and economic crisis. Yet, President Trump is using this crisis to call for terminating the payroll tax, which would defund Social Security. This is the wrong approach. According to the Social Security Administration's Chief Actuary, eliminating payroll taxes - as the President has called for doing - would essentially destroy the Social Security system in just a few short years. The President should instead sign into law the Heroes Act, which would extend unemployment benefits and provide another round of stimulus checks to Americans who are still suffering as a result of this pandemic. As Chair of the Congressional Asian Pacific American Caucus (CAPAC), I can say that Asian American and Pacific Islanders (AAPIs) are undoubtedly going to feel the pain of this misguided policy,' testified Rep. Judy Chu.
'Soldiers and federal workers have written to me to say the guidance they have been provided by their branches or agencies has been confusing or misleading. One, an Army Captain, expressed concerns that many of those who serve under him may not realize or prepare for the significant cuts to their paychecks which President Trump has set them up to receive in January. Dozens of federal employees have expressed similar fears - and the simple fact is that President Trump does not have the legal authority to deliver the 'permanent' deferral of these taxes. Also, as my colleagues note, some of the ways President Trump has proposed making this policy permanent would have the added effect of depleting Social Security trust funds and leading to benefit cuts. This is not the real relief my constituents need and deserve, this is smoke and mirrors that could easily do more harm than good,' testified Rep. Don Beyer.
''Terminating' (the word used by President Trump) Social Security's insurance contributions would radically transform our Social Security system. It is no hyperbole that it would end Social Security, as we know it. This is true regardless of whether the more than $1 trillion of revenue lost each and every year were replaced with income tax proceeds (or, more accurately, given today's unprecedented deficits, borrowed funds). Even a temporary halt to those payments, with or without general revenue, threatens Social Security,' testified Social Security Works President Nancy J. Altman, J.D.
'It is hard to overstate the importance of Social Security to women. Social Security benefits, which are lifelong, inflation-adjusted, and virtually universal, are the foundation for women's retirement security…. They are especially important for women of color, who face extremely high poverty rates as they age…. The payroll tax deferral is problematic not only because it offers inadequate, and only temporary, assistance (especially in light of the strain it will impose on workers when repaid), but also because it has the potential to undermine Social Security and grievously harm the women and families who depend on its benefits,' testified National Women's Law Center Director of Income Security Amy K. Matsui.
'Forcing this payroll tax decision on that same U.S. military will do real harm-and does not allow time for the deliberate policy and planning practices that help to educate and mitigate the impact of a decision like this on the rank and file. There will be service members who see extra money in their bank accounts, but do not understand they will see less in their accounts come January. The advice from military publications and outside groups has been 'don't spend the money, just hold it.'…. That's not real relief. And it's certainly not how the greatest military on earth should be forced to educate its personnel,' testified VoteVets Director of Government Relations William P. Goodwin.
'The National Committee strongly urges this subcommittee to oppose any plan to change SocialSecurity and Medicare's funding by eliminating, cutting or deferring the payroll tax. In addition, we urge the Administration to disavow elimination of the payroll tax so that America's seniors can rest assured that they will continue to have economic and health security in retirement, just as they have had since Social Security was created 85 years ago and Medicare 55 years ago. Social Security and Medicare are too important to replace the dedicated and self-financed revenue source with another funding mechanism,' testified National Committee to Preserve Social Security and Medicare President and CEO Max Richtman.
'Congress must do everything in its power to protect and expand Social Security, not reduce its funding or dismantle the program. While some may say that the President's executive action to defer Social Security payment is an effort to stimulate the economy, there are much better ways to do this,' testified Alliance for Retired Americans President Robert Roach, JR.