Chief Actuary Weighs In on Impact of Payroll Tax Elimination - CNN; AMAC
In a letter issued yesterday, Social Security Chief Actuary Stephen C. Goss projected that the “OASI Trust Fund reserves would become permanently depleted by the middle of calendar year 2023, with no ability to pay OASI benefits thereafter.” The projections by Social Security’s Office of the Chief Actuary are in response to a request by several U.S. senators to assess the impact of eliminating the 7.65% payroll tax beginning January 1, 2021, and were made under the assumption that there would be no compensating revenue brought into the program. CNN’s Katie Lobosco provides additional background on the Goss letter in a post on cnn.com. Read her article here…
Earlier this month, President Trump discussed theoretical plans to eliminate the payroll tax as a means to increase take-home pay for workers, starting with a temporary deferral for the final four months of 2020 but potentially leading to a permanent elimination in 2021. At the time, the President forecasted no impact on Social Security, indicating that the funding would be offset by intra-governmental fund transfers. Since both of these scenarios require congressional action, it’s important to understand in absolute terms the impact of one part absent the other. The Chief Actuary’s analysis provides context for just how serious the solvency issue could be for a progam so vital to America’s seniors.
The issue of payroll tax elimination and its potential impact on Social Security funding is a serious concern to the Association of Mature American Citizens (AMAC). Since 2012, AMAC has been actively advocating for legislative action to resolve the long-term solvency issue facing the program, and has developed a solution whereby modest changes in cost of living adjustments, benefit calculations, and retirement ages would ensure stability with no additional taxes on workers. AMAC’s proposed solution, “The Social Security Guarantee Act,” takes selected portions of bills introduced by former Rep. Sam Johnson (R-TX) and current Rep. John Larson (D-CT) and merges them with the Association’s own well-researched ideas to ensure Social Security’s viability for multiple generations. Part of the AMAC plan is its recommended Social Security PLUS feature, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers.
AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.
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