By Mike Festa, State Director, AARP Massachusetts
On behalf of all older Americans, AARP sent a letter on Sept. 22 to congressional leaders to support a joint resolution disapproving of the new rule allowing temporary suspension of the collection of payroll taxes that largely fund Social Security.
A presidential order issued on Aug. 8 allows employers of workers who make $4,000 biweekly or less to temporarily suspend their 6.2 percent portion of the payroll tax from Sept. 1 through Dec. 31. Few employers are participating, and the taxes would have to be repaid in early 2021, but President Donald Trump has stated publicly that he would, if reelected, work to have repayment of the deferred payroll taxes forgiven.
AARP has long opposed any suspension or deferral of the payroll tax, which would not help unemployed workers and could potentially undermine Social Security’s funding.
Workers have paid into Social Security with every paycheck. It’s a hard-earned benefit and a promise that must be kept. It is the only guaranteed source of lifetime income in retirement for most seniors. Did you know that Social Security makes up the largest source of retirement income for most Americans and provides nearly all income (90 percent or more) for about 10 million seniors? Social Security also provides important protections for spouses, survivors of deceased workers, and those with disabilities. Any suspension, reduction, or elimination of the payroll tax contribution puts Social Security in jeopardy. AARP fought a proposal to suspend the payroll tax temporarily until the end of 2020, and will keep fighting any future reduction or elimination proposals.
The Social Security Administration chief actuary said if not replaced, terminating the payroll tax would deplete the Social Security trust fund by 2023, “with no ability to pay benefits thereafter.” There are concerns from both parties about any cuts to Social Security’s dedicated funding. And, there is widespread concern among America’s business community and major employers, with most not participating in the deferral.
Know that AARP will never stop fighting to protect Social Security and make sure hard-working Americans get the benefits they’ve earned. Any attempt that puts Social Security in jeopardy will be met with fierce action from AARP and our 38 million members. Now, with so many Americans struggling to afford health care and other basic needs, the promise of Social Security is even more important. We will not stand by for any effort to cut benefits or leave Social Security on shaky financial ground.
Anyone running for President of the United States must have a solution to keep Social Security strong for current and future generations.
Mike Festa is the State Director for AARP Massachusetts.