Business
Commentary: Social Security is still in good shape but faces challenges — from Trump
The annual reports of the Social Security and Medicare trustees provide yearly opportunities for misunderstandings by politicians, the media, and the general public about the health of these programs. This year is no exception.
A case in point is the response by House Budget Committee Chairman Jodey Arrington (R-Tex.) to the Social Security and Medicare trustees’ projections about the depletion of the programs’ reserves: “Doing nothing to address the solvency of these programs will result in an immediate, automatic, and catastrophic cut to benefits for the nearly 70 million seniors who rely on them.”
The reports say nothing about an “immediate” cut to benefits. They talk about cuts that might happen in 2034 and 2033, when there still would be enough money coming in to pay 89% of scheduled Medicare benefits and 81% of scheduled Social Security benefits.
The Trump administration’s actions are weakening the country’s economic outlook and Social Security’s financial footing.
— Kathleen Romig, Center on Budget and Policy Priorities
House Ways and Means Committee chairman Jason Smith (R-Mo.) used the release of the reports to plump for the budget resolution that the House narrowly passed on orders from President Trump and that is currently being masticated by several Senate committees.
The reports, Smith said, make clear “how much we need pro-growth tax and economic policies that unleash our nation’s growth, increase wages, and create new jobs.” The budget bill “would do just that,” he said.
Neither Arrington nor Smith mentioned the leading threats to the programs coming from the White House. In Social Security’s case, that’s Trump’s immigration, taxation and tariff policies, which work directly against the program’s solvency. For Medicare, the major threat is a rise in healthcare costs.
But those have flattened out as a percentage of gross domestic product since 2010, when the enactment of the Affordable Care Act brought better access to medical care to millions of Americans.
That trend is jeopardized by Republican healthcare proposals, which encompass throwing millions of Americans off Medicaid. Policy proposals by Health and Human Services Secretary Robert F. Kennedy Jr. such as discouraging vaccinations can only drive healthcare costs higher.
Let’s take a closer look. (The Social Security trustees are Kennedy, Treasury Secretary Scott Bessent, Labor Secretary Lori Chavez-DeRemer and newly confirmed Social Security Commissioner Frank Bisignano, all of whom serve ex officio; two seats for public trustees are vacant. The Medicare trustees are the same, plus Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services.)
The trust funds are built up from payroll taxes paid by workers and employers, along with interest paid on the treasury bonds the programs hold.
At the end of this year, the Medicare trust fund will hold about $245 billion, and the Social Security fund — actually two funds, consisting of reserves for the old-age and disability programs, but typically considered as one — more than $2.3 trillion.
Trump has consistently promised that he won’t touch Social Security and Medicare, but actions speak louder than words. “Trump’s tariffs and mass deportation program will accelerate the depletion of the trust fund,” Kathleen Romig of the Center on Budget and Policy Priorities observed after the release of the trustees’ reports this week. “The Trump administration’s actions are weakening the country’s economic outlook and Social Security’s financial footing.”
Immigration benefits the program in several ways. Because “benefits paid out today are funded from payroll taxes collected from today’s workers,” notes CBPP’s Kiran Rachamallu, “more workers paying into the system benefits the program’s finances.” In the U.S., he writes, “immigrants are more likely to be of working age and have higher rates of labor force participation, compared to U.S.-born individuals.”
The Social Security trustees’ fiscal projections are based on average net immigration of about 1.2 million people per year. Higher immigration will help build the trust fund balances, and immigration lower than that will “increase the funding shortfall.” All told, “the Trump administration’s plans to drastically cut immigration and increase deportations would significantly worsen Social Security’s financial outlook.”
A less uplifting aspect of immigration involves undocumented workers. To get jobs, they often submit false Social Security numbers to employers — so payroll taxes are deducted from their paychecks, but they’re unlikely ever to be able to collect benefits. In 2022, Rachamallu noted, undocumented workers paid about $25.7 billion in Social Security taxes.
Trump’s tariffs, meanwhile, could affect Social Security by generating inflation and slowing the economy. Higher inflation means larger annual cost-of-living increases on benefits, raising the program’s costs. If they provoke a recession, that would weigh further on Social Security’s fiscal condition.
Trump also has talked about eliminating taxes on Social Security benefits. But since at least half of those tax revenues flow directly into Social Security’s reserves, they would need to be replaced somehow. Trump has never stated where the substitute revenues could be found.
Major news organizations tend to focus on the depletion date of the trust funds without delving too deeply into their significance or, more important, their cause. It’s not unusual for otherwise responsible news organizations to parrot right-wing tropes about Social Security running out of money or “going broke” in the near future, which is untrue but can unnecessarily unnerve workers and retirees.
The question raised but largely unaddressed by the trustee reports is how to reduce the shortfall. The Republican answer generally involves cutting benefits, either by outright reductions or such options as raising the full retirement age, which is currently set between 66 and 67 for those born in 1952-1959 and 67 for everyone born in 1960 or later.
As I’ve reported, raising the retirement age is a benefit cut by another name. It’s also discriminatory, for average life expectancy is lower for some racial and ethnic groups than for others.
For all Americans, average life expectancy at age 65 has risen since the 1930s by about 6.6 years, to about 84 and a half. The increase has been about the same for white workers. But for Black people in general, the gain is just over five years, to an average of a bit over 83, and for Black men it’s less than four years and two months, to an average of about 81 and four months.
Life expectancy is also related to income: Better-paid workers have longer average lifespans than lower-income workers.
The other option, obviously, is to leave benefits alone but increase the programs’ revenues. This is almost invariably dismissed by the GOP, but its power is compelling.
The revenue shortfall experienced by Social Security is almost entirely the product of rising economic inequality in the U.S. At Social Security’s inception, the payroll tax was set at a rate that would cover about 92% of taxable wage earnings. Today, rising income among the rich has reduced that ratio to only about 82%. That could mean hundreds of billions of dollars in lost revenues.
The payroll tax is highly regressive. Those earning up to $176,100 this year pay the full tax of 12.4% on wage earnings (half deducted directly from their paychecks and half paid by their employers).
Those earning more than that sum in wages pay nothing on the excess. To put it in perspective, the payroll tax bite on someone earning $500,000 in wages this year would pay not 12.4% in payroll tax (counting both halves of the levy), but about 4.4%.
Eliminating the cap on wages, according to the Social Security actuaries, would eliminate half to three-quarters of the expected shortfall in revenues over the next 75 years, depending on whether benefits were raised for the highest earners. Taxing investment income — the source of at least half the income collected by the wealthiest Americans — at the 12.4% level rather than leaving it entirely untaxed for Social Security would reduce the shortfall by an additional 38%. Combining these two options would eliminate the entire shortfall.
Social Security has already been hobbled by the Trump administration, Trump’s promises notwithstanding. Elon Musk’s DOGE vandals ran roughshod through the program, cutting staff and closing field offices, and generally instilling fears among workers and retirees that the program might not be around long enough to serve them. In moral terms, that’s a crime.
Those are the choices facing America: Cutting benefits is a dagger pointed directly at the neediest Americans. Social Security benefits account for 50% or more of the income nearly 42% of all beneficiaries, and 90% or more of the income of nearly 15% of beneficiaries.
The wealthiest Americans, on the other hand, have been coasting along without paying their fair share of the program. Could the equities be any clearer than that?
Robotaxis could be turning into robocops.
A self-driving Waymo reported two teens to San Mateo, Calif., police on Monday after they were found drinking alcohol and shooting toy guns in the back of the vehicle.
According to a social media post from the San Mateo Police Department, officers detained two 15-year-olds after the Waymo they were riding in contacted the department and stopped in a parking lot until law enforcement arrived.
“Parents do you know where your teens are?” the San Mateo Police Department wrote on Facebook following the incident. “Waymo does!”
Officers removed both teens from the vehicle and determined they were using toy guns to shoot Orbeez out the windows. Orbeez are small, water-absorbing beads sold at toy stores.
“Toy guns, water guns, and BB guns all pose real dangers, especially to an untrained eye,” the Police Department said. “The simple handling of them can cause fear in [passersby].” “
A video posted on Facebook shows at least five officers and a police dog responding to the scene and approaching the Waymo with their weapons raised.
Waymo did not immediately respond to a request for comment.
Waymo vehicles have internal cameras and microphones that may be used in an emergency or to “promote safety and security,” according to Waymo’s online support page.
The cameras are also used to ensure the vehicles are clean and to help find lost items, according to the support page.
The company said it does not use facial recognition or other biometric identification technologies to identify individuals.
“In more urgent circumstances, support may access live video during a trip,” the Waymo page said.
The San Mateo Police Department’s Facebook post has garnered nearly 60 comments, with one user accusing Waymo of “snitching.”
“At least they got a designated driver?!” one user commented.
Business
Commentary: How right-wing anti-transgender attacks led to a Supreme Court ruling upholding sex discrimination
At the Supreme Court, the unfounded fear of boys masquerading as girls in youth sports rolled the clock back on gender equality.
On the surface, the Supreme Court’s June 30 opinion upholding state laws barring transgender girls from women’s and girl’s sports teams looks like a victory for women’s rights.
The 6-3 opinion by Justice Brett M. Kavanaugh certainly presents itself that way. “Females and males have inherent physical differences relevant to athletic performance,” Kavanaugh wrote. “Therefore, in contact sports, forcing female athletes to compete against males can create significant safety risks.” He also asserted that “forcing female athletes to compete against males can undermine competitive fairness.”
The ruling applied to prohibitions enacted in Idaho and West Virginia against “biological” males’ participation on women’s teams in public schools. Federal judges in both states overturned the bans. The Supreme Court majority restored them. The ruling essentially upholds similar bans enacted in 25 other states.
There was no record of any transgender person participating in school sports in the State, let alone any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.
— Justice Sonia Sotomayor, demolishing the Supreme Court’s argument in favor of banning transgender girls from girl’s sports
Kavanaugh, like Donald Trump and others in the anti-transgender camp, maintained that one’s gender is an immutable fact of life, established even before birth.
Anything else, Trump stated in an executive order he issued on inauguration day 2025, could only be the product of “gender ideology extremism.” The U.S., his order stated, recognizes “two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality.” That’s a “biological truth,” he declared.
In his own version of this overconfident and factually insupportable conclusion, Kavanaugh wrote: “As all agree, females and males have inherent physical differences relevant to athletic performance.”
Science recognizes that some people are “born with sex traits that don’t fit into typical male or female patterns,” to cite a discussion on the Cleveland Clinic web page on the topic “intersex.” The condition “may involve chromosomes, hormones, reproductive organs or genitals.”
From a psychological standpoint, medical science recognizes “gender dysphoria” as a real condition often requiring counseling and medical intervention such as the use of puberty blockers and hormones to stave off the development of secondary sex characteristics until the condition can be resolved.
No one disputes that there are physical differences between the sexes. Few would dispute that on average or even at the median, males may be bigger and more powerful than females, or that in certain contact sports the difference may be telling and on occasion dangerous.
But that’s not the same as asserting that the physical differences between males and females invariably mean that men will invariably prevail over women in all competitions or that their participation will endanger women.
The International Olympic Committee — in a policy statement Kavanaugh cited incompletely — says that in “most running and swimming events,” males have a 10% to 12% advantage over women. That’s a range that would accommodate the full spectrum of outcomes — transgender females win, cisfemales win, they tie. (The “cis” prefix denotes those living consistent with their birth gender.)
West Virginia and Idaho addressed this ambiguity by banning transgender women from all girls’ teams. So under their rules transgender girls can’t play football or soccer with cisgirls. But what’s the argument in favor of banning them from the 100-yard dash, or cross-country track, or diving, or archery?
But something else is going on here. The Supreme Court’s ruling was almost preordained, given the years-long campaign by conservatives to demonize transgender individuals as if they’re members of an alien species.
It will be recalled that during his presidential campaign, Trump spun a despicable fantasy in which children were kidnapped in school and secretly subjected to sex-change operations.
Trump’s executive order wiped out policies aimed at protecting transgender adults from discrimination. He moved to outlaw gender-affirming medical therapies for anyone under 19 by cutting off federal funding for healthcare institutions that provide such care.
He banned transgender individuals from serving in the military and ordered federal prison officials to move transgender inmates into the general populations consistent with their birth genders, which exposes them to physical assault. (Federal Judge Royce Lamberth of Washington, D.C., has blocked the government from transferring three transgender women into the male prison population or terminating their hormone treatments.)
I wrote during Trump’s first term, when his anti-transgender policies were still gestating, that the goal was to show that “one can target any community, as long as it doesn’t have a strong political voice or political power. These are the actions of bullies and cowards, pretending to be strong.”
Last year, the Supreme Court struck its first blow against transgender rights by upholding a Tennessee law banning transgender care, including puberty blockers and hormone therapy, for minors. Similar laws have been enacted in 25 other states. The majority in that ruling by Chief Justice John G. Roberts Jr. was identical to the one in the June 30 ruling — Roberts, Kavanaugh, and Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett.
Who are the targets of this ideological campaign? They number only about 1.6 million U.S. adults, or one-half of 1% of the U.S. population. About 300,000 adolescents ages 13 to 17, or 1.4%, identify as transgender, according to a study by UCLA School of Law.
In West Virginia, as Justice Sonia Sotomayor observed in her dissenting opinion, “there was no record of any transgender person participating in school sports in the State, let along any ‘problem’ with transgender students … creating unfair competition or unsafe conditions.”
In endorsing the flat bans directed at transgender women in Idaho and West Virginia, Kavanaugh argued that any attempt to implement case-by-case judgments of students’ requests to join sports teams inconsistent with their biological gender would create “an enormous practical and administrability problem.”
Is that so? That wasn’t the case in Maine, where the annual K-12 population is more than 170,000. There, a committee was charged with determining whether a student’s participation in a sport consistent with their gender identity but inconsistent with their biological sex would “result in an unfair athletic advantage” or present a risk of injury to others. The committee held 56 hearings from 2013 through 2021, or an average of seven per year. During the entire time span, only four involved transgender girls. (The outcome of those hearings couldn’t be learned.)
It was Maine’s policy, one might recall, that provoked a confrontation between Trump and Maine Gov. Janet Mills at the White House last year, when Trump threatened to withhold federal funding from the state unless it barred transgender students from competing on women’s sports teams. “We’ll see you in court,” Mills snapped.
Whether the Idaho and West Virginia laws genuinely protect girls from unfair competition is questionable. (The Idaho law is styled the “Fairness in Women’s Sports Act.”) In practice, the laws may subject women in public schools to “invasive sex verification procedures,” as educational expert George Theoharis of Syracuse University wrote after the court ruling.
They’re also based on a retrograde view of women as fragile creatures needing men’s protection, Theoharis wrote — “the same logic that has historically been used to justify excluding women from making their own healthcare decisions and girls from rigorous math and science; that physically demanding work is simply beyond them.” (There don’t appear to be any state laws barring transgender women from competing in men’s sports.)
Becky Pepper-Jackson, the plaintiff in the West Virginia case, in which she is identified only as B.P.J., is the only transgender girl who sought to join girl’s teams — track and cross-country — in the state. That was in 2021, just after West Virginia passed its law and she was about to enter sixth grade. She didn’t appear to pose any competitive risk to others on the track and cross-country teams she applied to join — her lawyers told the Supreme Court that on those no-cut teams, she “came in near the back.”
Anyway, she had not gone through male puberty, which theoretically might have endowed her with a competitive advantage, because she had been taking puberty blockers and female hormones.
Thanks to the court’s ruling, Sotomayor observed in a dissent joined by Justices Elena Kagan and Ketanji Brown Jackson, West Virginia can deny Becky access to school sports “because it thinks they have an inherent athletic advantage, even if the facts show that they do not.”
B.P.J., Sotomayor wrote, “cannot practice on girls’ teams, even if she would not take anyone’s spot in an eventual competition, even if everyone who tries out for the team makes it, and even if having the chance to participate could aid immensely in treating B. P. J.’s gender dysphoria.”
So whose interest was really protected by the Supreme Court?
An Orange County real estate investor accused of criminally defrauding an Arizona bank of nearly $100 million pleaded not guilty Monday and remains in custody.
Mahender Makhijani, 44, of Corona del Mar — who also was ordered by an arbitrator to pay $1.34 billion in a separate civil fraud case — was arraigned in Santa Ana federal court on two charges.
He is accused of bank fraud and making a false statement to a bank in a June 8 case involving a $100 million real estate loan made by Phoenix-based Western Alliance Bank. He was taken into custody on June 10.
Makhijani is accused of providing bogus collateral for the October 2024 loan now in default. In a civil lawsuit, Western Alliance said the outstanding balance as nearly $99 million.
Prosecutors say he falsified title insurance policies that showed the bank would have a first lien on the underlying collateral if the loan went bad, when in fact it did not.
A trial was set for August 11 before U.S. District Judge David O. Carter in Santa Ana.
Michael Schachter, his criminal defense attorney, did not respond to messages seeking comment.
In the civil case, an arbitrator in May ordered Makhijani to pay Laguna Beach real estate mogul Mohammad Honarkar $1.34 billion after ruling he had fraudulently induced him into a 2021 joint venture — and then wrested control and lost to creditors more than two dozen properties Honarkar had owned.
Makhijani has not been criminally charged in that case, but prosecutors alleged in an affidavit in support of the bank fraud charges that he used “force and threats” in his dealings with Honarkar and others — including taking over the landmark Hotel Laguna in 2023 that Honarkar was renovating.
Prosecutors sought to hold Makhijani without bail after his arrest.
The affidavit noted he is a legal Indian immigrant with a home and bank accounts in that country, has access to private jets and threatened to “run away” if caught in a difficult situation.
The request was denied and he was granted $500,000 bail.
However, Makhijani remains in custody after a hearing sought by prosecutors last month before Magistrate Judge Autumn Spaeth.
The judge declined to accept a $450,000 cashier’s check submitted by a Makhijani associate for the bail, finding insufficient proof the source of the funds was legitimate, according to court records.
Makhijani is not prominent outside Orange County real estate circles, but he established a thriving distressed-assets business over the last decade that attracted prominent Southern California real estate investors.
Prosecutors said it paid for a lifestyle that included two multimillion-dollar homes in Corona del Mar, a luxury apartment in Newport Beach and various luxury vehicles.
As of last month, prosecutors had not fully traced his assets, which they believe are not held in his name and some of which may be in India.
The businessman employed an array of shell companies and strawmen to sign documents on his behalf, and to stand in for him as operators of his companies, according to the affidavit.
Makhijani told an associate he took extra precautions because wanted to insulate himself from litigation and that “they were sharks in the distressed world who took advantage of people,” the affidavit stated.
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