NEED HELP?

Start a LIVE CHAT NOW!»

Will Congress Expand Social Security Benefits?

March 11, 2019

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:

  • Bumping up benefits for current and new beneficiaries with a modest increase for all beneficiaries equal to about 2% of the average benefit.
  • Providing better protection against inflation by improving the annual cost of living adjustment (COLA) formula to better reflect the costs incurred by seniors through adopting a Consumer Price Index for the Elderly (CPI-E) formula. The not-for-profit National Committee to Preserve Social Security and Medicare and other organizations have strongly favored the adoption of the CPI-E.
  • Protecting low income workers with a new minimum benefit which will be set at 25% above the poverty line and would be tied to wage levels to ensure that the minimum benefit does not fall behind. No one who paid into the system over a lifetime should retire into poverty, the Congressman says.
  • Cutting taxes for beneficiaries. Over 12 million Social Security recipients would see a tax cut. Presently, your Social Security benefits are taxed if you have non-Social Security income exceeding $25,000 for an individual or $32,000 for couples. This new plan would raise that threshold to $50,000 and $100,000 respectively.
  • Holding Supplemental Security Income (SSI), Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries harmless. The bill would ensure that any increase in benefits from the bill do not result in a reduction in SSI benefits or loss of eligibility for Medicaid or CHIP.

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.