Senate Finance Committee chairman Chuck Grassley (R-IA) had some words of caution for fellow Republican President Donald Trump today. From The Hill:
Sen. Grassley said he would only support making President Trump‘s payroll-tax holiday permanent if it was coupled with a larger reform to ensure the long-term solvency of Social Security.
Grassley told The Hill in an interview that he would like to see the Social Security Trust Fund, which is funded by payroll taxes, made whole next year if Trump and Congress transform the deferral of those taxes in 2020 into a permanent tax cut.
He announced, “I would not entertain that question unless … it would go in with the reform of Social Security. We’ve got to make sure that we keep our promises to senior citizens.”
Trump pledged on Saturday to make the payroll-tax holiday enacted for 2020 a permanent tax cut “If I’m victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax,” he claimed at a news conference in Bedminster, N.J., Saturday. “I’m going to make them all permanent. In other words, I’ll extend beyond the end of the year and terminate the tax. And so, we’ll see what happens.”
Plus he added on Monday, “I signed directives to give a payroll-tax holiday, with the understanding that after the election — on the assumption that it would be victorious for an administration that’s done a great job — we will be ending that tax. We’ll be terminating that tax.”
Though Grassley said if payroll-tax obligations, which Trump has ordered be deferred until Dec. 31, are forgiven next year, then Congress will have to transfer money from the general treasury to the Social Security Trust Fund.
“If it goes on until Dec. 31 or a little bit into next year, we’re going to have to do like we did in 2009 or 2010, we’re going to have to put general revenue into the trust fund, dollar for dollar.”
The GOP Senator from Iowa argued, “Go to the fact that Social Security people think we’re raiding the Social Security fund. And we are raiding it, but we have always put in general fund revenue in it so it is made whole. But that creates — it might create political problems, but it creates a public relations problem.”
When asked if he’s still concerned that a payroll-tax holiday created bad political optics for the GOP he confessed, “I have that concern.” Then declared, “The president didn’t make it clear but I think, once before, Secretary [Steven] Mnuchin has thought about it, made it clear that you replenish it dollar-for-dollar.”
Grassley said the troubling appearance the payroll-tax cut is a raid on Social Security wouldn’t be a problem if Trump announced a plan to restore the trust fund as he ordered a new payroll-tax holiday for employees. “If it would come out at the same time, I don’t think we’d have that problem. But since the president announced one without the other, I hope he’ll follow up.” Trump once again the center of attention.