Social Security Fictions
Congresswoman Nancy Pelosi (D–CA) claims that “SOCIAL SECURITY IS YOUR MONEY” and that “Trump and Republicans” are “plotting” to “steal from it to fund tax breaks to billionaires.”
IN FACT, Trump’s actions improve the finances of SS by reducing waste and theft, Republican tax cuts don’t touch SS and would keep taxes at about the same level they have been for the past 70 years, and SS is not legally or effectively “your money.” Here are the receipts:
1) Trump has repeatedly promised not to cut SS benefits, and he never attempted to do so during his first term.
2) Trump and DOGE are ensuring that more SS funds get to legitimate beneficiaries by reducing the $8.7 billion that SS loses each year to administrative costs and fraud/improper payments. That’s enough to pay 398,000 retired workers their old-age benefits.
3) Accusations by Democrats that DOGE is ending telephone services are patently false and distortions of the fact that DOGE is “eliminating the risk of fraud associated with changing bank account information by telephone” because 40% of SS “direct deposit fraud is associated with someone calling SSA to change direct deposit bank information.”
4) The Republican tax bill doesn’t cut any SS benefits, protects the program from “waste, fraud, and abuse,” and keeps the tax rates of the richest 0.1% at current levels, or 3 times that of the middle class.
5) The Republican tax bill mainly renews Trump’s 2017 “tax cuts,” which apply to all taxpayers and are actually “tax evens” that correct for bracket creep which consumes an ever-growing share of people’s incomes over time.
6) Despite 14 federal “tax cuts” over the past 70 years, the portion of the U.S. economy consumed by federal taxes has stayed roughly level.
7) Contrary to popular myths, the SS Trust Fund has never been looted, and SS is not a saving plan but mainly a “pay-as-you-go” program that pays most of its benefits by taxing people who are currently working.
8) Per the Social Security Administration, “The money you pay in taxes isn’t held in a personal account for you to use when you get benefits. We use your taxes to pay people who are getting benefits right now. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.”
9) About 95% of all SS payroll taxes were spent in the same year they were collected, and after 88 years of operation, the SS Trust Fund has enough money to pay for only 2 years of benefits and administrative costs.
10) Per the Social Security Administration, “There has been a temptation throughout the program’s history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. … Congress clearly had no such limitation in mind when crafting the law. … Benefits which are granted at one time can be withdrawn.…”
11) In 1960, the U.S. Supreme Court ruled (5 to 4) that entitlement to SS benefits is not a contractual right.
12) Despite multiplicative tax increases on succeeding generations of Americans, SS is due to become insolvent in 2035 because it operates like a Ponzi Scheme.
