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Trump Idea Could Change Funding for Social Security

Grassroots groups are concerned that a proposal to change the way Social Security is funded would have negative trickle-down effects on local businesses. (Granite State Organizing Project)
Grassroots groups are concerned that a proposal to change the way Social Security is funded would have negative trickle-down effects on local businesses. (Granite State Organizing Project)
April 19, 2017

CONCORD, N.H. - A New Hampshire grassroots group says a change being floated by the White House would not only harm local seniors but bring negative economic consequences to grocers, landlords and small businesses across the state.

The Trump administration is sending up what's being described as a trial balloon to end the separate payroll taxes dedicated to Social Security and replace them with general revenue or a consumption tax, similar to a sales tax.

Sarah Jane Knoy, executive director of the Granite State Organizing Project, said more than half of U.S. seniors were living in poverty before the program was established.

"Social Security has lifted those that have served our country out of poverty, and it's done so by having this dedicated income stream," she said. "I can't believe that anybody would propose changing it. It just seems like trying to fix something that isn't broken."

Critics have charged that Social Security is going bankrupt and has to be changed. The latest federal estimates said the program's trust fund will run out in 2034, but its supporters have said the Trump proposal is a sneaky way to undermine it, adding that Social Security still could pay out nearly 80 percent of current benefits, even with an empty trust fund.

Since Social Security has its own dedicated source of funding, it adds nothing to the deficit. However, socialsecurityworks.orgSocial Security Works president Nancy Altman pointed out that ending the payroll taxes would make cutting Social Security benefits a way to reduce the deficit at some point in the future.

"So I've actually called it a 'Trojan horse,' because it looks like a gift," she said. "It looks like middle-class tax relief, but really it's undermining middle-class economic security."

About two-thirds of American seniors rely on Social Security for most or all of their income. Without the program, economists have estimated the poverty rate for older Americans could multiply by three or four times.

More information is online at socialsecurityworks.org and ssa.gov.

Mike Clifford, Public News Service - NH