On the same day that U.S. millionaires stop paying into Social Security for the rest of the year, President Donald Trump’s pick to head the Office of Management and Budget (OMB)—who wants to slash the safety net program—was confirmed to that post by the U.S. Senate.
Citing his support for cutting Social Security, Medicare, and Medicaid, lawmakers and advocacy groups took to social media on Thursday to denounce Rep. Mick Mulvaney’s (R-S.C.) nomination to head OMB. During his confirmation hearing last month, Sen. Bernie Sanders (I-Vt.) voiced concern that Mulvaney’s views were “way, way out of touch with what President Trump campaigned on.” (Sanders elaborated in a tweet storm highlighting several instances in which the Tea Party Republican went on the record as wanting to slash funding for the programs and raise the retirement age.)
As with other cabinet confirmations, groups warned that Thursday’s vote will have electoral consequences when Trump’s campaign hypocrisies are inevitably exposed.
“Voters will be looking to see if Trump breaks one of his top campaign promises by allowing Mulvaney to push his radical plan to cut Medicare and Social Security—and force millions of American seniors into poverty,” said Kait Sweeney, press secretary for the Progressive Change Campaign Committee. “Any senator—Republican or Democrat—who sides with Mulvaney and Trump’s radical agenda that benefits bankers and billionaires at the expense of working families should expect fierce opposition in 2018 from Trump’s own voters.”
Now, its up to members of Congress and senior advocates to hold the line against potential cuts, while continuing their push to strengthen Social Security.
“Voters will be looking to see if Trump breaks one of his top campaign promises by allowing Mulvaney to push his radical plan to cut Medicare and Social Security—and force millions of American seniors into poverty.”
—Kait Sweeney,Progressive Change Campaign Committee
To that end, Sanders and Rep. Peter DeFazio (D-Ore.) will on Thursday introduce the Social Security Expansion Act, which they say would protect and expand Social Security and pay for it by eliminating the cap for payroll income above $250,000 as well as applying a 6.2 percent Social Security tax to investment income for high-income households.
The bill’s introduction was pegged to the day some described as a late Valentine to millionaires. “Between the end of their payroll taxes for the year, and Mulvaney’s…confirmation, Thursday could turn out to be an especially pleasant day for millionaires,” Campaign for America’s Future senior fellow Richard Eskow wrote in an op-ed.
“After today, Thursday, February 16, people with million-dollar salaries will stop paying the Social Security payroll tax for the year,” he explained. “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.” (Trump stopped contributing just 40 minutes into New Year’s Day,” according to the Center for American Progress.)
“If they pay in at the same rate as everyone else, we can expand benefits,” Social Security Works said to promote a day of action that will culminate at 2:00pm Thursday at the Dickson Senate Office Building, when Sanders and DeFazio will be joined by colleagues and leading progressive advocacy groups for a press conference.
Indeed, a report from the Center for Economic and Policy Research (CEPR) released Thursday found that removing or raising the cap on earnings that can be taxed for Social Security would eliminate most future shortfalls in the program’s trust fund. The paper shows:
- Roughly 1 in 18 people, or 5.4 percent of workers, earn more than the current cap and would be affected if it were eliminated;
- If workers who earn over $250,000 in wages paid the tax, the top 1.6 percent of workers would be affected; and
- If the cap applied to people who earn over $400,000 in wages, only the top 0.7 percent would be affected.
What’s more, according to a new analysis from the Center for American Progress (CAP) also published Thursday:
Over the past several decades, a precipitous rise in income inequality—due in large part to policy choices that have concentrated ever-increasing shares of the nation’s income in the hands of those at the top of the income ladder—has taken a huge toll on Social Security’s finances. As a result of the growing share of earnings exceeding the payroll tax cap, for instance, millionaires and billionaires pay into the system for only a few weeks, days, or even hours each year, compared with the vast majority of workers, who contribute to Social Security all year long.
“President Trump campaigned on a promise to protect and preserve Social Security,” CAP’s Rachel West and Rebecca Vallas wrote. “That would be an important first step, but American workers need more. If Trump is serious about his promise to shield American families from the deep, damaging cuts proposed by his fellow conservatives—including several of his own cabinet picks—he should at least act to reverse rising inequality and strengthen Social Security.”
A poll released this week by the National Committee to Preserve Social Security and Medicare found overwhelming support for increasing Social Security benefits—and for funding that increase by having wealthy Americans pay the same rate into Social Security as everyone else.
“These results prove that Americans want Congress to honor the commitment to all working people who paid into Social Security and Medicare, and keep their hands off these programs,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, who spoke at Thursday’s press conference. “This should be a warning to members of Congress that they tamper with our cherished social insurance programs at their peril.”