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Treasury: Trump's payroll tax deferral won't hurt Social Security

Treasury: Trump's payroll tax deferral won't hurt Social Security
© Greg Nash

The Treasury Department on Wednesday said that President TrumpDonald John TrumpBiden holds massive cash advantage over Trump ahead of Election Day Tax records show Trump maintains a Chinese bank account: NYT Trump plays video of Biden, Harris talking about fracking at Pennsylvania rally MORE's payroll tax deferral during the coronavirus pandemic won't hurt Social Security, pushing back on criticisms from Democrats and advocacy groups.

"We do not expect deferral to impact the Social Security Trust Funds because the deferral is temporary and all deferred taxes must be repaid," a Treasury spokesperson said in a statement.

The spokesperson added that "the deferral will have no impact whatsoever on current or future payments received by Social Security recipients, and the Trump Administration remains fully committed to the integrity of the Social Security Trust Funds."

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The statement comes one day before a Democratic-led House subcommittee holds a hearing on legislation to overturn Trump's payroll tax deferral order. The hearing is being held by the House Ways and Means Committee's Social Security subcommittee, and the witnesses include Democratic lawmakers and Social Security advocates.

In advance of the hearing, AARP endorsed Democrats' resolution, arguing that the deferral has led members of the public to have concerns about the ability to get the Social Security payments they expected.

The Treasury spokesperson said that the department will continue to make regular transfers to the Social Security trust funds based on a schedule developed earlier this year.

"Treasury does not have reliable information to revise that transfer schedule because employers’ regular tax payments to Treasury are not differentiated between income taxes and payroll taxes, and the payroll tax deferral is elective," the spokesperson said.

Trump signed an order last month directing the Treasury to allow employers to defer employee-side Social Security taxes, in an effort to help workers amid the pandemic. Employers can opt to stop withholding the taxes from workers' paychecks through the end of the year, but then have to recoup the money by increasing the amount withheld in the first few months of 2021.

Trump has said that he wants to forgive the deferred taxes. Treasury Secretary Steven MnuchinSteven Terner MnuchinOn The Money: McConnell says he would give Trump-backed coronavirus deal a Senate vote | Pelosi, Mnuchin see progress, but no breakthrough | Trump, House lawyers return to court in fight over financial records Progress, but no breakthrough, on coronavirus relief McConnell says he would give Trump-backed coronavirus deal a vote in Senate MORE has said that legislation to do this would also transfer money from the general fund to the Social Security trust funds.