The newly created “Trump accounts” began on the Fourth of July. If the accounts move the country toward private Social Security accounts, as the legislation’s sponsor Sen. Ted Cruz (R-Texas) suggests, it will be one of President Trump’s most consequential positive (as opposed to his numerous negative) economic policies.
First, we need to consider Social Security’s longstanding financial challenges, and then why Trump accounts could help address those challenges.
The Social Security system operates on a pay-as-you-go system. The payroll taxes workers and their employers pay — 12.4 percent of employee income, split between employer and employee — into the Social Security trust fund are used to pay current retirees.
Merrill Matthews | The Hill