AP FACT CHECK: Trump's risk to Social Security, economy myth

BALTIMORE (AP) — President Donald Trump’s proposed payroll tax cut is a threat to Social Security no matter how he casts it.

During a news conference Wednesday, he insisted he could eliminate the tax if he were reelected, and do it without undercutting retirement benefits or greatly adding to the deficit. He said economic growth would offset the revenue losses.

That claim has little basis in reality.

He also pointed to a manufacturing boom during the coronavirus pandemic but there isn’t one.

A look at some of his economic claims:

TRUMP: “At the end of the year, the assumption that I win, I’m going to terminate the payroll tax ... We’ll be paying into Social Security through the General Fund."

THE FACTS: Trump, in effect, has endorsed defunding Social Security by not providing an alternative source of revenues.

The risk is that this could destabilize an anti-poverty program that provides payments to roughly 65 million Americans. It also could force people to cut back on the spending that drives growth so they can save for their own retirement and health care needs if they believe the government backstop is in jeopardy.

A 12.4% payroll tax split between employers and workers funds Social Security, while a 2.9% payroll tax finances Medicare. These taxes raised $1.24 trillion last year, according to the Congressional Budget Office. Over a 10-year period, Trump’s idea would blow a $16.1 trillion hole in a U.S. budget that is already laden with rising debt loads.

Trump last week announced a payroll tax deferral through the end of the year, part of a series of moves to bypass Congress after talks on a broader coronavirus relief bill that has stalled. He says he will make it a permanent tax cut with the help of Congress. Democrats have described that idea as a...