Golden Backs Bill to Protect Social Security from Funding Shortfall
WASHINGTON — Congressman Jared Golden (ME-02) announced today his cosponsorship of a resolution that would effectively halt an Executive Order that temporarily deferred the collection of payroll taxes. Since payroll taxes help fund Social Security, the order could also do lasting damage to the Social Security system.
“Rather than risk undermining the Social Security system that hundreds of thousands of Mainers rely on, we should be protecting and enhancing the program and working to deliver real COVID-19 relief through a bipartisan deal between the White House and Congress,” said Congressman Golden. “Congress should block these regulations and focus on working together to deliver practical solutions.”
Golden previously joined Representatives Spanberger (VA-07), Finkenauer (IA-01), Lamb (PA-17), Axne (IA-03) and Cooper (TN-05) to urge President Donald Trump to rescind the order in a September letter.
Congressman John Larson, Chairman of House Ways and Means Social Security Subcommittee, praised Golden’s work to protect Social Security:
“For more than 80 years, Social Security has been our nation’s number one economic security program. I commend Rep. Golden for urging President Trump to reverse course on his harmful move to defer payroll taxes, which threatens the long-term viability of Social Security. Many businesses, including the U.S. Chamber of Commerce, have said this executive action is unworkable. Rep. Golden knows how important Social Security is not only for seniors, but the thousands of Americans who receive disability or survivors’ benefits. I’m proud he is joining with our colleagues to protect Social Security,” said Larson.
Golden has been a staunch defender of Social Security in Congress. In August, he sounded the alarm on a Senate proposal that would have made it possible to fast-track cuts to Social Security and Medicare. He also backed a bill last November that would alter the Windfall Elimination Provision to allow thousands of teachers, firemen, and other public servants in Maine access to their full Social Security benefits.
You can read the full text of the letter here, or below:
President Donald Trump
1600 Pennsylvania Ave NW
Washington D.C., 20500
September 11, 2020
Dear President Trump,
We write in strong opposition to your recent executive action allowing employers to defer their employees’ payroll taxes that fund Social Security. While we share your concern about the security of American workers and families during the unprecedented economic downturn caused by this pandemic, we urge you to work with Congress to pass a relief bill that directly addresses the employment crisis at hand. Likewise, we strongly encourage you to work with Congress to strengthen Social Security and ensure its continued viability – not cut it nor rob it of its dedicated revenue.
Since 1935, Social Security has been the foundation of a dignified retirement after a lifetime of work for millions of Americans. It also provides the most important, and often only, disability insurance and life insurance that working families have. Social Security has low administration costs and participation is near universal: nearly every worker in America pays 6.2% out of their paychecks in exchange for guaranteed benefits when they are no longer able to work. These benefits are backed by the full faith and credit of the United States. In 2019, about 178 million Americans paid into Social Security and the program paid out benefits to around 64 million people, reaching about 97% of the total elderly population. Because of Social Security, senior citizens can live with dignity in their old age, workers can support themselves after suffering an injury, and widowed spouses and children can remain financially stable after a worker’s sudden death.
On August 8, 2020 you signed a memorandum instructing the Secretary of Treasury to defer the collection of the payroll tax beginning on September 1st. You also instructed the Secretary to explore legislative options to eliminate the tax completely. During the signing ceremony, you pledged to campaign “to forgive these [deferred] taxes and make permanent cuts to the payroll tax.”
We are concerned that your memorandum is unworkable for employers and employees alike. It puts employers in our districts in the difficult position of either refusing to boost their workers’ paychecks in the short term or exposing their workers to unexpected and significant tax liabilities when the deferral period ends. It is unworkable to implement a system where individual employees make the decision on whether to withhold the deferred taxes – leaving employers to implement different tax systems for different employees – and it is unfair to force employers to make such a decision on their employees’ behalf.
This is especially true for federal employees, who are required to participate in your deferral scheme. According to a notice from the Agriculture Department’s National Finance Center, the deferral will go into effect for the federal workforce as soon as September 8th. Employees will temporarily see bigger checks but could face unexpected tax liabilities of more than $2,000 at the end of the deferral period.
Even as it creates an administrative nightmare for employers and employees alike, the deferral of Social Security contributions does not help individuals who have lost their jobs and their paychecks during the public health emergency. More than 28 million people are drawing unemployment currently. According to the Department of Labor, for the week ending on August 15th, 1.1 million Americans filed unemployment claims. We urge you to work with Congress to find solutions that will help needy families struggling to get by on their much-reduced unemployment benefits instead of pursuing policies that fail to address the real crisis at hand.
Finally, this policy threatens the long-term viability of Social Security. In 2019, the payroll tax accounted for 89% of revenue for the Federal Old-Age and Survivors and Disability Insurance Trust Funds (OASDI), which pays Social Security’s benefits. The permanent cut envisioned in your memorandum and subsequent comments would require Social Security to draw on the OASDI’s $2.9 trillion reserve fund to continue paying benefits on time, hastening the reserve’s depletion and jeopardizing the earned benefits of millions of Americans.
In short, we believe the August 8 memorandum is unworkable for employers and employees and does not help the millions of Americans in dire need of financial assistance. Perhaps worse, the unilateral, unprecedented authority you claimed in issuing that memorandum threatens the viability of the Social Security system. We urge you to reverse course and work with Congress to strengthen Social Security for future generations, assist those American suffering during the COVID-19 public health emergency, and prevent burdening workers with an unexpected tax bill early next year.