Chairman of the First Chamber of Finance Chuck Grassley
Charles (Chuck) Ernest GrassleyTrump puts trade back on agenda 2020 McConnell hands-off over coronavirus delivery bill GOP presidents retaliate over accusation of spreading disinformation with Biden probe MORE (R-Iowa) said Tuesday that he would only make support President Trump
Donald John TrumpTeachers Union launches 0K ad purchase and calls for education funding in relief FDA pledges ‘we will not cut corners’ on coronavirus vaccine Let’s protect our values COVID-19 liability MAYthe holiday of payroll tax permanently as it was combined with a major reform to ensure the long-term solvency of social security.
Grassley told The Hill in an interview that he wants the Social Security Trust Fund, which is funded by taxes, to be created next year when Trump and Congress turn the proposed tax cuts into a permanent tax cut in 2020.
Asked if he would support permanently making the holiday tax break announced by Trump over the weekend, Grassley said, “I would not support that question unless … it would go along with the Social Security reform. Security. “
“We need to make sure we keep our promises to seniors,” he said.
Trump called on Saturday to make the fiscal tax holiday introduced by 2020 a permanent tax cut.
“If I win on November 3, I plan to forgive those taxes and make permanent cuts to the tax bill,” Trump said at a news conference in Bedminster, NJ, Saturday. “I’ll make them permanent.”
“In other words, I will expand after the end of the year and end the tax,” he said. “And so, we’ll see what happens.”
He reiterated his position in remarks at the White House on Monday.
‘I have drawn up guidelines for giving a tax break, with the understanding that after the elections – with the assumption that it would be victorious for an administration that did a great job – we will end this tax. We will end this tax, “he said.
It is not clear whether the president is talking about employee-only payroll taxes or employers’ payroll taxes, which were lifted for the rest of 2020 in the $ 2.2 trillion CARES Act.
Trump on Saturday extended the tax cut holiday in 2020 by instructing the Treasury Department to stop collecting tax breaks for workers earning less than $ 104,000 by Dec. 31.
Permanently making a four-month staff payroll holiday would reduce the Social Security Trust’s fund by about $ 167 billion, unless it was supplemented from the general income fund, according to a quick calculation by Nancy Altman, president of Social Security Works.
Always making the tax breaks for both employees and employers in 2020 would cost about $ 540 billion, Altman said in an interview.
Grassley said that if tax obligations, which Trump has ordered to be postponed until Dec. 31, are forgiven next year, Congress will have to transfer money from the general treasury to the Social Fund Trust Fund.
“If it lasts until 31 December. Or a little bit in next year, we will have to do as we did in 2009 or 2010, we will have to put general income into the trust fund, dollar for dollar, ”he said.
But if Trump “wants to end the tax on workers and employers altogether,” Grassley said this should be part of a broader reform effort to find other means of financing Social Security.
At the end of 2010, President Obama signed a bilingual compromise law that extended Bush’s two-year tax cuts and cut staff pay rates from 6.2 percent to 4.2 percent for a period. of one year.
At the end of 2011, Congress continued with a temporary extension of tax evasion to extend the relief for another two months.
Then, in February 2012, Obama enacted the middle-class taxation and employment law into the law that pushed through the 2 percentage point tax cut for another 10 months by the end of that year.
In all three copies, Congress also handed over language that replaced the Social Security Fund with general revenue funding.
Grassley said last month that he did not support including a tax cut in the next round of coronavirus law enforcement legislation because it would create a “public relations problem” for Republicans.
“Go to the fact that people from Social Security think we are attacking the Social Security fund. And we plead it, but we have always put general fund income in it, so that it is made whole. But that creates – it can create political problems, but it creates a public relations problem, “Grassley told reporters on July 20.
Grassley asked Tuesday if he was still worried that a tax-evading holiday would cause bad political optics for the GOP, “I’m worried about that.”
‘The president did not make it clear, but I think, once before, secretary [Steven] “Mnuchin has thought about it, made it clear that you are supplementing it dollar-for-dollar,” he said, referring to the treasurer’s secretary.
Grassley said the dire appearance that tax cuts are a raid on Social Security would not be a problem if Trump had announced a plan to restore the trust fund while ordering a new tax break for employees.
‘If it came out at the same time, I do not think we would have that problem. “Since the president announced one without the other, I hope he will follow,” he said.
Grassley said he hopes Trump shares Mnuchin’s view that general treasury funds should be used to replenish the trust fund if the payroll tax holiday becomes a permanent tax cut.
“If the treasurer’s secretary says that, I think he would believe it,” the president’s senator said.
Leader of the First Chamber Mitch McConnell
Addison (Mitch) Mitchell McConnellTeachers Union launches 0K ad buy calls for funding for education in relief No signs of breakthrough for stalled coronavirus talks State aid appears to be major obstacle to revival of COVID-19 talks (R-Ky.) Did not respond Tuesday to a question about whether he supports making the holiday tax breaks permanent.
Lawyer groups are sounding the alarm about changing Social Security funding from a dedicated tax bill to a stream of general treasury funds.
Altman of Social Security Works warns that the character of Social Security could transform.
‘What if you want to turn it into a low-income program where your resources have been tested and it is a very low benefit for existence? Then of course you pay for it with general income and you get FICA lost, ‘she said about the taxation of the Federal Insurance Contributions Act, which pays for Social Security and Medicare.
William Arnone, chief officer of the nonpartisan National Academy of Social Insurance, said changing tax rates to general income funds to support Social Security would completely transform the program.
“It transforms the whole financing principle of Social Security from a dedicated income stream on income tax into trust funds that have that financing to a general income approach, which means – number one – it is not dedicated. Number two, it is subject to annual cuts. It removes the status of social security as a guarantee that is automatic every year, ”he said.
Arnone said such a major reform would create an opening for “those who now say all that general income is being used. Let’s look at issues as a means test,” he said.
“Social security will be transformed from what it is, social insurance, to social assistance. That this really fits in with the fundamental nature of a social security program like Social Security, ‘he said.
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