White House economic adviser Larry Kudlow Tuesday disagreed with Stephen Goss, the chief actuary of the Social Security Administration, who warned in a letter to a group of Senate Democrats that the government could be forced to stop paying Social Security benefits by mid-2023 if President Donald Trump permanently terminates the payroll tax and doesn't offer an alternate revenue source.
"There is no plan to eliminate Social Security taxes," Kudlow said on Fox News' "America's Newsroom." "I don't know where that idea came from. It is not true. President Trump is, however, proposing to defer payroll taxes between now and year-end, let's say Sept. 1 through Dec. 31."
Goss said in his letter that if the payroll taxes are eliminated, the Social Security Administration estimates the Disability Insurance Trust Fund's asset reserves would be "permanently depleted" by the middle of 2021, and the Social Security Old Age and Survivors Insurance (OASI) Trust Fund for retired workers reserves would run out by mid-2023.
Kudlow, however, denied that Trump plans to permanently cut payroll taxes.
"That is a different subject," Kudlow said. "The president has said a million times he will protect the Social Security system. He said that a million times. But he would like a permanent deferral. In other words, he would prefer and will do everything he can to find ways and means to do this, to forgive the deferral. So therefore those employees and employers won't have to worry about added tax liabilities in the future."
The president wants to give a 6.25% payroll tax cut for higher wages, he added, and he thinks he'll get his wish after the election.
But show host Sandra Smith quoted Trump's comments that "we'll be terminating the payroll tax after the beginning of the new year" and asked how that would be different.
"I understood that to simply mean that we will permanently defer the payback of that tax cut," said Kudlow. "That's all that meant. He wasn't talking about a generalized Social Security tax cut. He wants to protect Social Security. I understood that perfectly well and I think most people did, too. He wants payroll tax deferral to become permanent in the sense of the payback will be forgiven."
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