Update: White House Walks Back Trump Promise to Terminate the Payroll Tax That Funds Social Security and Medicare
President Donald Trump promised a massive cut to the federal budget at his White House press conference on Wednesday, one that would gut the funding for core safety net programs like Medicare and Social Security.
During a discussion of his attempts ongoing relief during the coronavirus pandemic, Trump repeatedly promised to “terminate” the federal payroll tax, also known as the Federal Insurance Contributions Act (FICA) tax, staring in 2021 if he is re-elected. That tax, which specifically funds social safety programs, is a large chunk of the federal budget. In fiscal year 2019, for example, FICA taxes generated $1.24 trillion, which amounted to nearly 40% of the nation’s overall budget. Trump had previously in the press conference suggested that Congress could pass a law to fund Social Security from the General Fund but still offered no specifics on how he would replace this huge hole in federal funding other than “tremendous” economic growth.
“I will be deferring payments and student loans at zero interest until further notice,” Trump said of one of this measures to provide financial relief before suggesting a permanent end to the funding mechanisms for Medicare and Social Security. “And the payroll tax, we will be terminating the payroll tax. After I hopefully get elected, I will be terminating the payroll tax.”
“That will mean anywhere from $5,000 or more per family and also great for businesses in great for jobs,” Trump continued. “A lot of people will be happy to hear and a lot of certain conservative economist thinks that’s the greatest we can do. That is better than the payments and anything else. But it is a lot of money. And it’s going right directly to the people. And it goes there easily but it also creates stronger companies to employ the people. So we will be, on the assumption that I win, we will be terminating the payroll tax after the beginning of the new year.”
Earlier in the same press conference, Trump had promised he would protect Social Security after the Biden campaign called out the administration for threatening the solvency of the retirement program during previous White House plans about using money from the payroll tax holiday.
Update, 8:03 p.m. EDT: A senior White House official cleaned up Trump’s gaffe roughly an hour after the press conference, confirming to Fox News’ John Roberts that the president would not be attempting to kill the main funding mechanism for Medical and Social Security.
A Senior Administration Official tells me @realDonaldTrump is NOT proposing to cancel payroll taxes if re-elected (even though he said he would) The only plan on the table is to forgive the deferral. @FoxNews
— John Roberts (@johnrobertsFox) August 12, 2020
Watch the video above, via Fox News.
