For Immediate Release | August 14, 2020
Bill Arnone at firstname.lastname@example.org
William M. Rodgers III is Board Chair of the National Academy of Social Insurance
William J. Arnone is Chief Executive Officer of the National Academy of Social Insurance
Coinciding with the week when we mark the 85th anniversary of Social Security’s enactment, the Trump Administration moved to alter the current and future role of payroll contributions as the primary funding vehicle for our nation’s most successful and popular social insurance program. Following widespread media coverage questioning both the feasibility and desirability of the Administration’s executive order and future plans, modifications are being issued.
First, the order to defer collection of the employee portion of FICA contributions (beginning September 1, 2020) is being modified from mandatory to optional, with IRS guidelines forthcoming. In other words, employers need not suspend such withholding, which present a host of administrative complications and employee relations challenges.
Second, the President’s announced intention to make the suspension of employee contributions to Social Security “permanent” (after the executive order’s expiration on December 31, 2020) is being clarified. Subsequent statements from the Trump Administration indicate only seeking Congressional action to forgive deferred contributions for employers who choose to do so, instead of pursuing a plan to terminate payroll contributions and replace with general revenue funding. The Administration will also seek to use general revenues to offset the loss in funding to Social Security resulting from the executive order, again subject to Congressional legislation.
Sharp coverage drew nationwide attention to the vital importance of Social Security’s continued funding through employee and employer contributions, as established by the transformational Social Security Act of 1935.
Contact: Bill Arnone, Chief Executive Officer
The National Academy of Social Insurance is a non-profit, nonpartisan organization made up of the nation’s leading experts on social insurance. Its mission is to advance solutions to challenges facing the nation by increasing public understanding of how social insurance contributes to economic security.