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Claims Trump cut Social Security mislead

October 31, 2020 GMT

CLAIM: President Donald Trump is cutting the payroll tax, and is cutting Social Security and Medicaid. 

AP’S ASSESSMENT: Partly false. Trump has not cut Social Security, though he has said he intends to eliminate the payroll tax, which funds the retirement benefits program. He has proposed measures that would cut Medicaid. 

THE FACTS: The payroll tax goes into a trust fund that pays for Social Security payments for roughly 65 million Americans. Employers and workers split paying the 12.4% payroll tax, and self-employed people pay the full tax. Medicare, the health insurance program for seniors, is funded by a 2.9% payroll tax. Medicaid, health insurance for low income people, is not funded from a payroll tax. 

Even before the coronavirus pandemic caused economic turmoil, government experts estimated that Social Security would be unable to pay full benefits starting in 2035, The Associated Press has reported. The trust fund is now likely to run out even sooner, because layoffs have cut into Social Security tax collections.

In August, Trump announced employers could defer paying payroll taxes until 2021 because of the coronavirus pandemic.

The move had little impact, according to Shai Akabas, director of economic policy at the Bipartisan Policy Center, a think tank in Washington, D.C.

“Very few companies have actually taken advantage of this opportunity. And so it has turned out to be largely a ‘nothing burger’ when it comes to making an impact on the economy or Social Security’s finances,” Akabas told the AP. 

Had more employers opted in, the impact of deferring the tax still would not have been great, said Akabas. “There might have been a very marginal amount of lost interest income to the trust fund, because they were paid slightly later than they otherwise would have been. But in the scheme of things, I mean, that’s a drop in the bucket for the program as a whole,” Akabas said.

Also in August, Trump made a series of statements about his intent to eliminate the payroll tax. 

“At the end of the year, the assumption that I win, I’m going to terminate the payroll tax … We’ll be paying into Social Security through the General Fund,” Trump said.

The chief actuary for the Social Security Administration has saidthat if the payroll tax were to be eliminated, and no alternative source of revenue was created, the trust fund that pays for Social Security would be depleted in less than three years. 

Trump has claimed economic growth would offset the lost revenue from abolishing the payroll tax, but AP has reported that it is highly improbable. An AP Fact Check found Trump’s proposal would put Social Security at risk, and “over a 10-year period, Trump’s idea to eliminate the payroll tax would blow a $16.1 trillion hole in a U.S. budget.”  

Complicating matters further, White House press secretary Kayleigh McEnany suggested to reporters that Trump misspoke when he pledged to eliminate the payroll tax. She said the president just wants to forgive the payroll taxes that he had already deferred.

Akabas said it is difficult to truly evaluate Trump’s position. “This has been a source of a lot of confusion in general in the policy community, because some of the president’s comments were a bit vague,” Akabas said.

One example of misleading information is an Oct. 30 tweet by Really American, an anti-Trump political action committee, which released a digital ad attacking Trump’s position on the payroll tax. The video features Trump saying: “We’ll be terminating the payroll tax. This would be a fantastic time to have the payroll tax cut” and “We’re cutting the payroll tax.”

The hashtag included in the video “#TrumpCutSocialSecurity,” is inaccurate, since Trump has not yet taken action that constitutes a cut to Social Security. 

The tweet relaying the ad on Twitter reads: “Social Security is completely funded by the payroll tax. Trump is cutting the payroll tax and is cutting social security and Medicaid. Everyone needs to know this.”

But while Trump’s pledge to eliminate the payroll tax would put Social Security at risk if there was not an alternative way to fund the program, Trump has not cut Social Security. 

Furthermore, Medicaid is not funded by the payroll tax, as the tweet suggests. It is true that Trump has supported measures that would scale back Medicaid.

The Trump administration encouraged states to impose work requirements in order to enroll in Medicaid. Luke Shaefer, a professor at University of Michigan’s Gerald R. Ford School of Public Policy, told the AP that led to “huge caseload declines.” 

“Work requirements discourage enrollment, which is effectively a cut,” Gerald Kominski, a professor at the Center for Health Policy Research at the University of California, Los Angeles, wrote in an email to the AP. 

But those work requirements have since been struck down by federal courts.”

Other proposals Trump had for cutting Medicaid never took effect. “Trump has proposed major cuts in Medicaid funding, but those have not been enacted by Congress,” Kominski wrote.


This is part of The Associated Press’ ongoing effort to fact-check misinformation that is shared widely online, including work with Facebook to identify and reduce the circulation of false stories on the platform.

Here’s more information on Facebook’s fact-checking program: