Business
Column: Trump pledges not to cut Social Security. Here are the ways he could breach that promise
Despite all the talk about Donald Trump being a unique political figure in American history, there’s one way in which he has behaved like every other politician on the stump: He’s promised not to lay a hand on Social Security.
With more than 67 million Americans collecting stipends now and hundreds of millions more counting on benefits for their retirement, any threat to the system’s benefits sends a shudder through the nation’s workers. That’s why a promise not to cut benefits has become embedded into American politics for most of the program’s nine decades of existence.
But that hasn’t eliminated the threat of benefit cuts, chiefly from Republicans. Social Security’s internal workings are so recondite and poorly understood by average voters that numerous possible ways of imposing benefit cuts or otherwise harming the program are hiding in plain sight. Trump mentioned some during his recent presidential campaign and attempted others during his last term.
I’m not sure that this administration is going to be in the business of strengthening and protecting Social Security.
— Social Security Commissioner Martin O’Malley
Trump’s fellow Republicans have alluded to yet others. In March, the House GOP caucus released a budget proposal that would eviscerate Social Security.
The caucus members groused about how Social Security has expanded since it was originally signed into law by Franklin Roosevelt in 1935, through “the addition of disability benefits, dependents and survivors benefits, and the incorporation of automatic cost-of-living adjustments.”
Predictably, they don’t mention who was responsible for these changes: Disability was added in 1956, under Dwight Eisenhower; cost-of-living adjustments were enacted in 1972, under Richard Nixon, and went into effect in 1975, under Gerald Ford. All three presidents were Republicans.
The committee called for “modest adjustments to the retirement age for future retirees to account for increases in life expectancy,” raising the retirement age to 69 from the current standard of 67 for new retirees. That’s a benefit cut, and one that would hit low-income and Black Americans harder than others.
Here’s the bottom line: It would be folly to be complacent about what the current political majority might do to Social Security.
“There’s a very serious worry on the horizon,” Social Security Commissioner Martin O’Malley told Al Sharpton on MSNBC last weekend, “because Donald Trump’s policies would seriously reduce the fiscal health of Social Security…. There’s a lot of talk among people around him about all sorts of gimmicks.” (O’Malley is leaving the commissioner’s post to run for the chairmanship of the Democratic National Committee.)
O’Malley is backed up by the Committee for a Responsible Federal Budget, a hive of conservative budget hawks.
Trump’s campaign proposals, the CRFB calculated in October, could cost Social Security’s cash reserves $1.3 trillion to $2.75 trillion over 10 years, hastening the exhaustion of its trust funds by three years, to 2031.
That would provoke a cut in benefits of as much as 33% if Congress fails to act in the interim, the committee reckoned — pointing to Trump’s proposals to eliminate taxes on Social Security benefits, imposing across-the-board tariffs on imported goods and deporting millions of immigrants.
Let’s take a look at the proposal Trump aired during the campaign to eliminate the federal income tax on Social Security benefits.
That’s a crowd-pleaser — after all, who doesn’t love lower taxes? It certainly would mean more take-home pay for those paying tax on their benefits, which is almost everyone except the lowest-income Americans. But it would erode the system’s fiscal stability at a crucial time. Trump couldn’t cut these taxes without congressional consent.
Social Security benefits are taxed on a progressive scale. Typically, , couples with “combined income” of $25,000 to $34,000 are taxed on 50% of their benefits; those with more than $44,000 pay tax on up to 85% of their benefits. (For individuals, the first threshold is $25,000 to $34,000.)
“Combined income” is defined as taxpayers’ adjusted gross income, plus their nontaxable interest earnings and half of their Social Security benefits.
Eliminating the tax on benefits, therefore, could put as much as $4,200 a year back in the pockets of an average benefit-collecting household. Those taxes, however, are paid back to the Social Security and Medicare systems.
For Social Security, which receives the tax on the first 50% of benefits, they’re vital to the program’s revenue stream —$50.7 billion, or 3.75% of all revenues, in 2023. Benefit taxation is projected to yield about $133 billion annually by 2033, accounting for more than 6.5% of the program’s income.
There are only two ways to keep Social Security whole — reduce benefits or increase the payroll tax that provides the largest chunk of income. Taxpayers would have to pay one way or another. And the joy of having more take-home pay now would evaporate when the bills start coming due.
During his first term, Trump and his acolytes took aim at Social Security’s disability insurance program, a favorite target of conservative Republicans. During an appearance on the CBS program “Face the Nation” in 2017, Trump’s budget director, Mick Mulvaney, led the charge.
“Do you really think that Social Security disability insurance is part of what people think of when they think of Social Security?” Mulvaney asked the moderator, John Dickerson. “I don’t think so. It’s the fastest-growing program. It grew tremendously under President Obama. It’s a very wasteful program, and we want to try and fix that.”
Dickerson did not push back. President Dwight Eisenhower, a Republican, had added disability coverage to Social Security in 1956, six decades earlier. Not only was disability not the “fastest-growing program,” it had been shrinking — falling from a peak of 11 million beneficiaries, including disabled workers and their dependents, in 2013, to 10.4 million when Mulvaney was speaking; the rolls would continue to decline, falling to about 8.5 million in 2023.
As for the assertion that disability was “wasteful,” the truth was that the disability error rate, which counts both overpayments and underpayments to beneficiaries, was well below 1% of all benefits, then-Acting Social Security Commissioner Carolyn Colvin advised Congress in 2012.
Trump advanced the attack on disability through his 2020 budget, which aimed to cut disability benefits by $70 billion over a decade. Mulvaney even bragged about hoodwinking Trump into violating his promise not to cut Social Security by telling him the cuts would be in “disability insurance” without revealing that disability insurance is part of Social Security.
Republicans consistently slander disability recipients as malingerers and layabouts. That’s based on the groundless notion that disability is easy to apply for and receive.
The disability certification process is long and difficult. Applicants must show that they have a physical or mental condition that prevents them from earning even $1,550 a month, or $18,600 a year, on their own. The approval process can take months, and even after appeals, only about 40% of applicants end up with benefits.
What’s important about the attacks on disability in Trump’s first term is that claims tend to rise along with the unemployment rate. The reason is that as job opportunities decline in general, the jobs available to the disabled become especially scarce. When desk jobs disappear and all that’s left are laborers’ positions, the opportunities for the physically and mentally challenged become only more limited.
That could be a factor if Trump’s economic policies, such as his intention to jack up tariffs on all imported goods, produce a recession. If that happens, keep your eye on the palaver about disability; it’s almost certain to experience a resurgence.
One tried-and-true method of undermining Social Security is starving the program of administrative resources, a GOP hobby horse for years. “Social Security, today, is serving more customers than ever before with staffing levels Congress has reduced to 50-year lows,” O’Malley told the House Appropriations Committee earlier this month.
The consequences have included wait times on the program’s 800 number that ballooned to nearly an hour, O’Malley said. Of the average 7 million clients who called the number every month for advice or assistance, 4 million “hung up in frustration after waiting far too long.”
The backlog of initial disability determinations reached a near-record of 1.2 million applicants awaiting a decision, some for more than a year. The program estimated that about 30,000 applicants died in 2023 while awaiting decisions.
The crisis in customer service matters because it erodes public confidence that the program will be there for them when their turn comes to claim benefits.
Then there’s Trump’s threat to deport as many as 11 million undocumented immigrants. An estimated 8.3 million unauthorized residents are actually part of the U.S. labor force. Social Security’s dirty little secret is that those who are working are actually improving the program’s fiscal health. That’s because they often submit falsified Social Security numbers to employers, so payroll taxes are withheld from their earnings — but because they don’t have legal Social Security numbers they can never collect benefits.
Furthermore, the mass deportations Trump has promised is likely to debilitate local and state economies. With the laborers needed to pick crops and build houses disappearing, those industries could stagnate, throwing native-born jobholders out of work. Less money will be coming into Social Security’s coffers. The overall loss to the program could be $300 billion to $1 trillion over a decade, the CRFB estimated.
The most dire prospect for Social Security in the coming term may be indifference to its future. Under a Democratic administration and with Democratic majorities in Congress, the prospects were good for the advancement of proposals to broaden and expand Social Security benefits.
Will anything like that happen in Trump’s next term? O’Malley tried to be judicious during his MSNBC appearance, but his opinion was clear: “I’m not sure,” he said, “that this administration is going to be in the business of strengthening and protecting Social Security.”
The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.
The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.
Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.
The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.
The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.
Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.
The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.
Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.
Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.
Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.
Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.
Business
California-based company recalls thousands of cases of salad dressing over ‘foreign objects’
A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”
The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.
Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.
None of the 42 locations where the product was sold were in California.
Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.
“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”
The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.
The company recalled the following types of salad dressing:
- Creamy Poblano Avocado Ranch Dressing and Dip
- Ventura Caesar Dressing
- Pepper Mill Regal Caesar Dressing
- Pepper Mill Creamy Caesar Dressing
- Caesar Dressing served at Costco Service Deli
- Caesar Dressing served at Costco Food Court
- Hidden Valley, Buttermilk Ranch
A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.
The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.
When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.
Top tech companies just don’t need as many fresh graduates.
“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”
While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.
Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.
“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”
The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.
Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.
“The industry for programmers is getting very oversaturated,” Akgul said.
The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.
Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.
It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.
In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.
Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.
Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.
A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.
“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”
To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.
Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.
Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.
Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.
As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.
“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”
After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.
Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.
“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”
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