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Fact check: Elizabeth Warren on Social Security in Trump's budget

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June 15, 2017
By Amée LaTour

In response to President Donald Trump's budget proposal, Sen. Elizabeth Warren (D-Mass.) claimed the following: “During his campaign, Donald Trump said over and over and over that he would not cut Social Security. So much for that campaign promise. Budget is out today and now we’ve seen it, right here—cut Social Security $73 billion over the next ten years.”[1]

As a candidate, did Trump promise to not cut Social Security? And does the president’s budget propose cutting $73 billion from Social Security?

Trump promised several times during the campaign to not cut Social Security.[2][3][4] The administration has said that Trump was referring to Social Security retirement benefits and not other programs.[5]

The president’s budget released on May 23 proposes to reduce the growth of spending for two Social Security programs by $72.5 billion over 10 years: Disability Insurance and Supplemental Security Income. Trump did not propose cuts in current spending levels, nor would the proposed cuts, if enacted, affect retirement benefits.[6]

Background

Trump's budget proposes $3.6 trillion in total spending reductions between 2018 and 2027.[7] The proposal is an expression of the president's desired budget actions, not a bill or law; Congress writes funding legislation, which the president can sign or veto.[8]

Social Security provides income for elderly and disabled individuals (and, in some cases, their families) through Old Age and Survivors Insurance (OASI), Disability Insurance (SSDI), and Supplemental Security Income (SSI).

OASI—typically referred to as retirement benefits—is financed through a trust fund that receives money from payroll taxes on employees and employers. Tax revenue collected in excess of required payouts is placed in the reserve fund. Eligibility for benefits requires wages paid into the trust fund for designated time periods, among other criteria.[9] In 2015, 49.2 million people received OASI benefits.[10]

SSDI is also funded through payroll taxes, with excess revenues placed into a reserve fund (separate from the OASI fund). Eligibility for the program requires having paid into the system.[11] The 2016 Annual Report from the Social Security and Medicare Board of Trustees projected that the SSDI reserve fund will run out in 2023, due to an increase in the number of recipients in relation to the number of workers paying the tax.[12] As of end-of-month April 2017, 8.8 million people were receiving SSDI payments, compared to 6.9 million people at end-of-month April 2007.[13]

The Supplemental Security Income program is funded through general tax revenues and is paid to individuals with limited incomes who are disabled, blind, and/or over the age of 65. (Eligibility is not dependent on having paid into the Disability Insurance and Old Age and Survivors Insurance trust funds.[14] As of 2015, 8.3 million people received SSI.[15])

Spending reduction

Trump's budget does not propose any reduction to current levels of spending for SSDI and SSI. It proposes to reduce the amount of future spending growth projected under congressional budgeting.[16]

In January 2017, the Congressional Budget Office projected that annual spending for SSDI would increase from $148 billion in 2018 to $217 billion in 2027 based on the projected growth in the number of recipients. Annual spending for SSI would increase from $52 billion in 2018 to $74 billion in 2027.[17] Trump's budget proposes to reduce that increase by $63.5 billion in SSDI spending and $9 billion in SSI spending over 10 years.[6]

Social Security budget proposal

The largest proportion of the reductions—$48.8 billion—would come from changes aimed at increasing labor force participation (LFP), thereby reducing the number of people receiving SSDI.[18] Measures include requiring applicants to seek jobs before their applications are considered, testing time-limited benefits, and increasing vocational and rehabilitation services.[19]

Reducing the time period for which new applicants would qualify for retroactive disability benefits (during which they were disabled but before they applied) from 12 months to six months would account for $9.9 billion of the proposed spending reductions.[19]

Another $2 billion in reductions would come from requiring applicants to seek reconsideration from the state of a denial of benefits before they are allowed to seek a review by an administrative law judge.[19][20]

The Trump budget also proposes to reduce projected spending growth by $9 billion by instituting a sliding scale for SSI benefits for people living in families with another SSI beneficiary. This proposal would maintain the current maximum benefit for an individual ($735 per month in 2017) but reduce the maximum benefit amount for additional recipients within a family.[19][21]

The remaining $2.7 billion of the proposed reductions would come from requiring states to reduce SSDI payments if an individual is also collecting Workers Compensation and his or her total benefits exceed 80 percent of their prior income. (Under current law in 15 states, the Workers Compensation is reduced if the income threshold is exceeded.) This would result in $164 million in savings. In addition, recipients of unemployment insurance would become ineligible for SSDI ($2.5 billion in savings).[19]

Trump's Social Security promises

As a candidate, Trump made numerous pledges to not cut Social Security benefits.[22] For example, while announcing his candidacy on June 16, 2015, Trump stated: "We've got Social Security that's going to be destroyed if somebody like me doesn't bring money into the country. ...I'm not going to cut it at all. I'm going to bring money in and we're going to save it."[2]

At a rally in Des Moines, Iowa on December 2015, he said: "You've been paying into Social Security—and Medicare by the way— ...We're not going to cut your Social Security and we're not cutting your Medicare. We're going to take jobs back from all these countries that are ripping us off. We're going to become a wealthy country again and we're going to be able to save your Social Security."[3]

During a Republican presidential debate in March 2016, Trump specifically discussed the retirement portion of Social Security. Sen. Marco Rubio said that he supported gradually raising the retirement age at which individuals would be eligible to receive Social Security benefits under OASI to 70. In response, Trump said, "It's my absolute intention to leave Social Security the way it is. Not increase the age and to leave it as is."[4]

Ahead of the release of Trump’s budget, White House budget director Mick Mulvaney told reporters that Trump’s campaign promises about Social Security related only to the retirement benefits. "If you ask, 999 people out of 1,000 would tell you that Social Security Disability is not part of Social Security. Old age retirement—that they think of as Social Security.”[5]

Conclusion

In response to the release of President Trump's budget proposal on May 23, Sen. Elizabeth Warren said, “During his campaign, Donald Trump said over and over and over that he would not cut Social Security. So much for that campaign promise. Budget is out today and now we’ve seen it, right here—cut Social Security $73 billion over the next ten years.”[1]

Trump did promise several times as a candidate not to cut Social Security.[2][3][4] His administration has said that he was referring only to Social Security retirement benefits.[5]

Trump’s budget proposes to reduce by $72.5 billion over 10 years the projected spending growth for two programs within Social Security: the Disability Insurance and Supplemental Security Income. He did not propose to cut current spending levels or to reduce Social Security retirement benefits.[6]

See also

Sources and Notes

  1. ↑ 1.0 1.1 Twitter, "Elizabeth Warren," May 23, 2017
  2. ↑ 2.0 2.1 2.2 Business Insider, "Here are the big ideas in Donald Trump's presidential campaign," June 16, 2015
  3. ↑ 3.0 3.1 3.2 C-SPAN, "Clip of Presidential Candidate Donald Trump Rally in Des Moines, Iowa," December 15, 2015
  4. ↑ 4.0 4.1 4.2 CNN, "Transcript of Republican debate in Miami, full text," March 15, 2016
  5. ↑ 5.0 5.1 5.2 The New York Times, "Trump Budget Cuts Programs for Poor While Sparing Many Older People," May 22, 2017
  6. ↑ 6.0 6.1 6.2 The White House, "Budget of the U.S. Government, A New Foundation for American Greatness, Fiscal Year 2018," May 23, 2017 (Pages 37-38)
  7. ↑ The White House, "Budget of the U.S. Government, A New Foundation for American Greatness, Fiscal Year 2018," May 23, 2017 (Page 26)
  8. ↑ The White House, "Budget Concepts and Budget Process," accessed June 6, 2017 Page 71)
  9. ↑ For more information on eligibility criteria, see Social Security Administration, "Frequently Asked Questions," accessed June 6, 2017
  10. ↑ Social Security Administration, "Status Of The Social Security And Medicare Programs: A Summary of the 2016 Annual Reports," accessed June 6, 2017
  11. ↑ In 2017, Employees and employers each pay a 6.2 percent Social Security tax on earnings up to $127,200 a year. Of that, 85 percent goes to currently insured retirees, their families, and spouses/children of deceased insured workers. The other 15 percent goes to currently insured people with disabilities and their families. Social Security Administration, "Understanding the Benefits," January 2017
  12. ↑ SSDI reserves were expected to run out in 2016, but a portion of OASI payroll taxes were reallocated to SSDI to extend the program's solvency. The Trustees project that OASI will no longer be able to pay full benefits as of 2035 due to an increase in retirees in relation to workers paying in. Social Security Administration, "Status Of The Social Security And Medicare Programs: A Summary of the 2016 Annual Reports," accessed June 6, 2017
  13. ↑ Social Security Administration, "Selected Data From Social Security's Disability Program: Disabled worked in current payment status," accessed June 11, 2017
  14. ↑ Social Security Administration, "Understanding Supplemental Security Income (SSI) Overview—2017 Edition," accessed June 6, 2017
  15. ↑ Social Security Administration, "Fast Facts & Figures About Social Security, 2016: SSI Program, Number of Recipients, 1974-2015," accessed June 6, 2017
  16. ↑ Real Clear Politics, "Mick Mulvaney: Washington's Definition Of A 'Budget Cut' Is A Joke," May 23, 2017
  17. ↑ Congressional Budget Office, "The Budget and Economic Outlook: 2017 to 2027," January 2017 (Page 96)
  18. ↑ The Bureau of Labor Statistics reported that, in 2015, 17.5 percent of people with disabilities were employed compared to 65 percent of people without disabilities. Bureau of Labor Statistics, "Persons with a Disability: Labor Force Characteristics Summary," June 21, 2016
  19. ↑ 19.0 19.1 19.2 19.3 19.4 The White House, "Major Savings and Reforms, Budget of the U.S. Government, Fiscal Year 2018," accessed June 6, 2017 (Pages 110-111)
  20. ↑ The proposal also includes a one-year probationary period for administrative law judges before they obtain a lifetime appointment (which would not directly add or reduce costs). Currently, judges grant claims at a higher rate (67 percent) than the state reconsideration process (5-10 percent). NOLO, "Social Security Disability: Four Levels of Appeal," accessed June 5, 2017
  21. ↑ Social Security Administration, "SSI Federal Payment Amounts For 2017," accessed June 11, 2017
  22. ↑ WKRG, "Can Donald Trump and Paul Ryan Mend Their Rift?" May 12, 2016
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