S.S. under attack — for real this time

For the first time — possibly ever — when Democrats say a Republican is coming for your Social Security, they’re right.

More than a week ago, President Trump signed an executive order deferring the payroll tax from Sept. 1 through the end of 2020. On the surface, getting almost 7% of your paycheck back seems great. It’s money in our pockets — a kind of stimulus without stimulus checks — which could be an immediate lifeline to some in the absence of a congressional compromise on COVID relief.

But there are some serious problems with deferring the payroll tax.

First, deferring the payroll tax does next to nothing to help anyone who is currently unemployed. The payroll tax gets taken out of paychecks, which people only get when they are working. Also, Trump’s order does not include self-employed individuals, because businesses will still be required to pay their half of the tax.

Second, “deferring” is not the same as “eliminating.” Money might go back into your pocket for now, but the government expects you to pay it later. People who can afford to would be smart to set that money aside, so when the government decides it wants it back, the money can be handed over as a lump sum.

Only an act of Congress could “forgive” these deferred payments, which are essentially an interest-free loan. Trump has even said that if he is reelected, he will work to “terminate” the payroll tax completely, according to the Associated Press. But forgiving the repayment of these taxes or eliminating them altogether will have dire consequences.

See, according to the AP, “A 12.4% payroll tax split between employers and workers funds Social Security, while a 2.9% payroll tax finances Medicare.” No payroll tax, no Social Security.

Despite the way it’s sometimes talked about, Social Security is not a welfare handout. Some people might refer to it as an “entitlement,” and while they don’t mean it in a nice way, that is what Social Security is — funds we are entitled to because they are ours to begin with. That is our money; the government is holding it in trust for us, so we’ll have an income source during our retirement in case our 401(k)s tank. Again.

Back in 2004, when the Bush administration tried to convince Americans that privatizing Social Security was the way to go, New York Times columnist Paul Krugman examined Chile’s and England’s failed attempts to do just that. According to Krugman, the privatized system in Chile “would have condemned many retirees to dire poverty, and the government stepped back in to save them.” In England, under Margaret Thatcher, private management fees took a large bite out of retirees’ savings.

Social Security and Medicare keep our elderly and retired from being condemned to poverty. Someday, Social Security and Medicare will keep us from being condemned to poverty. But if Trump succeeds in eliminating the payroll tax, there will be no safety net for us in our old age. To survive through our retirement, we’ll be forced to play Russian roulette with the stock market or bury our savings in the backyard.

Let’s hope someone successfully stops Trump’s attack on Social Security, or piracy and treasure maps are going to make a huge comeback post-2020.