The Social Security payroll tax deferral the Trump administration has made mandatory for federal employees is “outrageous,” and the administration should let employees opt out, Senator Chris Van Hollen (D-MD) told “Government Matters” Sunday.
Van Hollen spoke more than a week after Treasury Secretary Steven Mnuchin called the ability to opt out of the deferral a “reasonable issue” in testimony to the Senate Banking Committee September 24. Mnuchin was responding to a question Van Hollen asked about a September 8 letter he and more than 20 of his Senate colleagues had sent the Secretary, asking about making the deferral optional.
“Unfortunately, we still have not gotten a response to the letter, or any follow-up from the Secretary,” Van Hollen told “Government Matters”. “It’s outrageous, really, that they’ve made this a compulsory program. Most of the private sector employers are not participating. The United States Post[al Service] just decided it was not going to participate. The United States Senate, so far at least, is not participating. The House is not participating.”
President Trump has tweeted that if he is reelected, he’ll get Congress to pass legislation to forgive the deferral, letting federal employees that have had the tax deferred off the hook. But Van Hollen isn’t convinced that can happen, whether President Trump is reelected or an all-Democratic sweep gives his party control of both chambers on the Hill and sends former Vice President Joe Biden, the Democratic presidential nominee, to the White House.
“This was a proposal that was not popular among Democrats or Republicans on Capitol Hill,” Van Hollen said. “He [President Trump] has also said he’d like to eliminate the payroll tax permanently, which the Social Security actuary has indicated will essentially bankrupt the Social Security Trust Fund. President Trump says lots of things, but right now most of the private sector is not participating, so the whole issue of forgiving this at the end of the day is a moot point.”
Van Hollen says the message he’s getting from federal employee constituents is that they’re confused. “They’re getting conflicting messages from their agencies. For example, if you leave federal service before the end of the year, you’re then personally liable, potentially, for making those payments. It just complicates people’s personal finances, with really no benefit, because it all has to be paid back. This is why it’s never been something that’s had support on Capitol Hill from either party.”
