Michigan senator who embraced Obama payroll tax cut now opposes it under Trump

After supporting former President Barack Obama’s payroll tax cut, Sen. Debbie Stabenow, D-Mich., now opposes President Trump’s payroll tax holiday by arguing it would damage Social Security.

"From the employee standpoint, one of two things is going to happen. You're going to have a bill come due right around the holidays at the end of the year, so Merry Christmas, and here's your bill to pay back the Social Security holiday," the Michigan Democrat said on a Democratic National Committee conference call marking the 85th anniversary of the Social Security Act. "Or it's going to blow, at least, a $150 billion hole in Social Security going forward, if he would try to make it permanent or somebody else would be trying to make it permanent."

Stabenow supported Obama’s payroll tax cut and its extension, but argues that Trump’s payroll tax deferral is not necessary given the high unemployment rate during the pandemic.

“This is payroll so you have to be working and so with over 30 million people that are on unemployment benefits right now that are not able to work, because there are not jobs or there's not the safety in the workplace, it's an odd way to try to address the economic downturn and the number of people who don't have jobs right now that are trying to survive,” she said Friday.

“It certainly misses the mark there, which is why it has been universally panned by Republicans and Democrats in the U.S. Senate in the past when the president has tried to do it. But when you put that aside, we don't know if employers or employees will want to proceed with this,” she added.

House Speaker Nancy Pelosi also recently said she opposes Trump’s payroll tax deferral after backing Obama’s payroll tax cut plan and its extension.

Stabenow vowed to protect the tax revenue source of Social Security from underfunding going forward.

“I can just tell you that we're going to keep the commitment of Social Security and obviously going to focus on economic development in jobs and tax policy that lifts everybody up and focuses on working people in small businesses and and the things that are actually effective in turning the economy around. But we are going to make sure that the Social Security revenue source stays in place going forward,” she said.

James Roosevelt, former associate commissioner of the Social Security Administration and Franklin D. Roosevelt’s grandson, participated in the call with Stabenow. Roosevelt said Social Security shouldn't be referred to as an entitlement program. 

"They call it an entitlement, a term that is just not accurate and I very much dislike because, what it is, is an earned benefit, people pay their Social Security taxes and that provides the money for the trust fund and for the payments of Social Security," he said. 

Roosevelt said Trump's payroll tax reduction cuts off the "main source of funding" for Social Security.

"What he's [Trump] planning to do would devastate Social Security and Medicare and thereby threaten the economic stability of countless Americans," he said.

President Trump disputes the Democrats' arguments, saying the impact of Social Security long-term will be minimal since it only affects workers who make $4,000 or less every two weeks and that he is working to forgive the belated bill due at the end of the year.

"This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money is needed most," his executive order states.