For the first time in almost a half a century, Congress is set to hold hearings on expanding Social Security benefits. The House of Representatives is also looking at improving Medicare, and some elected officials advocate expanding that program to cover all Americans. In January, Representative John Larson (D-CT) introduced a bill called the Social Security 2100 Act. The proposed legislation has generated a groundswell of support with nearly 200 House members signing on as co-sponsors of the bill.
Features of the bill include:
Representative Larson says his bill would also strengthen the Social Security Trust Fund. Under the proposed legislation, all workers would pay the same rate, including high earners. Presently, payroll taxes are not collected on wages over $132,900. The bill would change this by requiring individuals to pay the Social Security tax on income over $400,000. Over time the gap would be filled gradually so that eventually everyone paid the tax on all their income. This provision, the Congressman says, would only affect the top 0.4% of wage earners. He also is advocating a gradually phased-in increase in the contribution rate so that by 2043 the contribution rate would be 7.4% instead of today’s rate of 6.2%. For the average worker, this would mean paying an additional 50 cents per week. The bill would also combine the two Social Security Trust Funds—Old Age and Survivors Insurance (OASI) and Disability Insurance (DI)—into one trust fund to ensure that all benefits will be paid.
The Social Security Act was signed into law in 1935 by President Franklin D. Roosevelt. Even he probably would not have envisioned the world today where, as pensions have become less common, more than 60 million older adults, disabled workers, and their families depend on Social Security to make ends meet. Serious discussions by our elected officials about the future of Social Security are crucially important and long overdue. We must ensure that the system is meeting the growing needs of current retirees and disabled persons as well as for generations yet to come.