October 27, 2020
Honorable John Larson
United States House of Representatives
1501 Longworth House Office Building
Washington, D.C. 20515
Dear Representative Larson:
On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I write to endorse your bill, H.R. 8171, the Save our Social Security Now Act. Your legislation would nullify the Internal Revenue Service (IRS) guidance on President Trump’s August 8th executive action to impose a payroll tax deferral. In addition, we support your efforts to stop President Trump’s dangerous plan to defund and destroy Social Security by permanently eliminating the payroll tax, thereby ending the programs’ dedicated funding source.
As you well know, Social Security is the signature accomplishment of President Franklin Delano Roosevelt and is the foundation of retirement security for our great country, providing nearly all workers and their families with essential insurance protections for retirement, disability, or death of a family breadwinner. The payroll tax, officially called the Federal Insurance Contribution Act (FICA) payment, is a contribution workers make with each and every paycheck in exchange for guaranteed benefits backed by the full faith and credit of the U.S. government. At this time of the healthcare and economic crises caused by the COVID-19 pandemic, when millions of Americans are cannibalizing their retirement savings in order to keep food on the table and a roof over their heads, eliminating the only guaranteed insurance protections they can count on for their retirement or in the case of death or disability spells disaster for millions of American workers.
In 2019, total income to the Social Security Trust Fund was just over $1.062 trillion, 89 percent of which came from FICA contributions, and paid benefits to 64 million people. According to the most recent Social Security Trustees Report, the accumulated assets saved up in the Trust Funds are projected to pay full benefits until 2035, at which point the Trust Funds are projected to be depleted and incoming payroll tax revenues will be the primary funding source available to pay benefits. Even then, this income is expected to be enough to pay about 79 percent of the promised benefits after 2035. According to the Chief Actuary for Social Security, eliminating FICA contributions would make it impossible to pay any disability benefits beginning in 2021 and unable to pay any retirement or survivor benefits by 2023. This would end Social Security, and the foundation of retirement security for nearly all American workers would evaporate.
Reimbursing the Social Security Trust Funds with general revenues is not a solution. Eliminating the program’s dedicated funding source would end Social Security as we know it, converting a guaranteed, earned benefit that reflects an individual’s lifetime work history to an unpredictable welfare benefit, dependent upon the whims of future Congresses and Administrations, forcing the needs of millions of workers and their families to compete for funding with myriads of other national priorities.
Social Security is the cornerstone of American’s retirement security, and it is also our nation’s number-one anti-poverty program and financial lifeline for millions of Americans. More than half of seniors receive over one-half of their income from Social Security, and it provides at least 90 percent of income for more than one-in-five seniors. Without Social Security, 15 million seniors, or almost half of older Americans (40 percent), would live in poverty. In addition, about 4.1 million children receive approximately $2.7 billion in Social Security benefits each month because one or both of their parents are disabled, retired or deceased. This money helps lift over 1 million American children out of poverty.
Social Security also means life insurance for workers and their families. Should a breadwinner die, payroll taxes entitle their families to survivor’s benefits, providing life insurance protection worth over $725,000. Social Security also provides disability insurance for workers and their families. Individuals with a prior history of medical problems or who work in industries with a high rate of injury are at the most risk as they frequently find it prohibitively expensive or impossible to obtain coverage. Social Security payroll taxes automatically fund this critical protection. For a young disabled worker with a spouse and two children, the disability insurance value of the benefit they get through Social Security is over $580,000. And, unlike private disability policies and annuities, Social Security benefits are increased annually to keep up with the cost of living.
Representative Larson, we applaud your long history of protecting and enhancing Social Security, and on behalf of the National Committee to Preserve Social Security’s millions of members and supporters, we thank you introducing H.R. 8171 and for your efforts to persuade President Trump to abandon his plan to permanently eliminate payroll taxes. We stand with you in defending Social Security and believe your success in protecting this sacred trust will help ensure the financial future of a grateful nation.
President and CEO