The federal government’s ability to pay Social Security benefits could stop by mid-2023 if President Donald Trump were to permanently terminate the payroll tax and not offer another revenue source, the chief actuary of the Social Security Administration said Monday.
The chief actuary, Stephen Goss, offered the prediction in a letter to a group of Senate Democrats who requested an analysis of what would happen if the payroll tax is eliminated with no other funding stream for Social Security benefits.
If that were to happen in January of next year, the Social Security Administration estimates that the Disability Insurance (DI) Trust Fund “asset reserves would become permanently depleted in about the middle of calendar year 2021, with no ability to pay DI benefits thereafter,” Goss said.
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Trump, however, wouldn’t be able to terminate the payroll tax unilaterally. Congress would have to pass legislation for that to happen, and with the makeup of the current Congress, the Democratic-controlled House would block any such proposal. A number of Republicans have also rejected calls for a payroll tax cut in the current Senate.
The president has said legislation to cut payroll taxes would specify that the money comes from the general fund. The SSA letter noted they were asked not to consider that scenario, which would not affect benefits. A measure to pull money from the general fund would be unlikely to pass under a divided Congress.
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