By Steve Slavin. Originally published at ValueWalk.
For decades, whenever Congressional Republicans appeared to be even thinking about cutting – or just slowing the rate of expansion of – Social Security benefits, they would be assailed not just by their Democratic colleagues, but by nearly every senior citizen advocacy group.
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American Politics And The Social Security Benefits
Thus, Social Security has long been known as “the third rail of American politics.” Any politician who stepped on it instantaneously lost his political life.
Well, I’ll give you three guesses who just stepped on the rail. President Donald Trump has just proposed ordering employers to stop collecting the 7.65 percent federal payroll tax from all employees earning less than $100,000.
At first glance, this would seem like a very helpful move during these desperate economic times. It would put thousands of dollars into the pockets of more than three quarters of the nation’s workforce, and provide a much-needed economic stimulus.
But there surely are more effective ways of doing this. After all, the people who really need the help are the tens of millions of Americans who are not employed.
What Is The Future?
More importantly, this diversion of tens of billions of dollars in payroll taxes will undermine the already deeply troubled Social Security and Medicare trust funds. Worried that these funds will soon run out of money, many Americans are wondering what will happen to their future Social Security and Medicare benefits.
Senior citizens, who have long tended to vote Republican, will now become even more shaken up by Trump’s payroll tax cut than other population groups. Most of them are very dependent of Social Security benefits and a a large majority are covered by Medicare.
If and when Congress finally passes a massive economic stimulus bill, it will not include a cut in the federal payroll tax. But the political damage from Trump’s amazingly tone-deaf payroll tax cut has already done irreparable political harm to the Republican party. After all, once you’ve stepped on the third rail, it’s too late to take a step back.
The post The Third Rail Of American Politics appeared first on ValueWalk.
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