Two Presidential Candidates on Social Security
Former PresidentTrump
He has consistently said that he would not make any cuts to Social Security and Medicare benefits. Instead he would combat waste, fraud, and abuse, even though experts say these generally well-run programs don’t have near enough to solve the problem.
But on March 11 in a rambling interview with CNBC’s Joe Kernen, Trump let slip, “So first of all, there is a lot you can do in terms of entitlements in terms of cutting and…” His campaign immediately tried to walk his comment back. (1)
In spite of his much repeated opposition to fraud, Trump pardoned or commutated sentences agains 200 insurance fraud felons, one of whom bilked $1 billion from Medicare and Medicaid. (2)
President Biden
In the meantime, President Biden has come up with an ingenious solution. Currently income subject to payroll tax is capped. Not a single dollar of earnings in excess of the cap is subject to Social Security payroll taxes. This year’s cap is $168,600.
As a result, the rich have become far richer and more and more of the total income earned by Americans has become concentrated at the top. Therefore, more and more total income escapes the Social Security payroll tax.
The obvious solution to Social Security’s funding shortfall is to lift the cap, so the super-rich pay more in Social Security taxes.
To target the super-rich to pay, rather than the upper-middle class, it makes sense to keep the cap in place for mid-income taxpayers, and eliminate the cap altogether on earnings in excess of, say, $400,000.
As it happens, Biden’s plan does exactly this. (3)
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