Planned reforms to Social Security have been unveiled by lawmakers, who claim that they will raise benefits while also improving the program for future generations. The Social Security Expansion Act has been submitted by Representative Peter DeFazio and Senator Bernie Sanders.
For seniors, the plan includes an increase in the cost-of-living adjustment, an extension of the program to 2096, and an additional $200 per month for those who are eligible. “One of my highest priorities is protecting Social Security, which millions of Americans rely on. With the cost of living at an all-time high, Social Security has never been more important,” DeFazio said.
In order to help low-income workers, legislators said that the law would update and increase the minimum benefit level to 125 percent of the poverty line. The bill calls for legislation to raise the federal income tax exemption to $250,000 and impose a Social Security payroll tax on all incomes beyond that amount.
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“At a time when half of older Americans have no retirement savings and millions of senior citizens are living in poverty, our job is not to cut Social Security,” Sanders said. “It is imperative that we extend Social Security.”
For Sanders’ bill to pass, anybody earning more than $147,000 a year would be required to pay the same amount of Social Security taxes as those earning less. “It’s time to scrap the cap, expand benefits and fully fund Social Security,” Sanders said.
More than 40 national groups have backed this measure to help the elderly and those with disabilities, according to the representatives. “An extra $200 a month would go a long way in helping retirees make ends meet. Extending the solvency of the Social Security program for 75 years means this benefit will pay itself forward for years to come,” Richard Delaney, with the Senior Citizens League, said.
According to the Social Security Expansion Act’s provisions, it would:
- Extend the solvency of the Social Security trust fund 75 years, through 2096, by requiring the wealthiest Americans to pay their fair share into the fund, just like everyone else. This legislation would lift the income tax cap and subject all income above $250,000 to the Social Security payroll tax. Under this bill, more than 93 percent of households would not see their taxes go up by one penny.
- Expand Social Security benefits across the board for current and new beneficiaries. Under this bill, Social Security benefits for someone turning 62 next year would be $200 per month higher.
- Increase Cost-of-Living Adjustments (COLAs). This bill would more accurately measure the spending patterns of seniors by adopting the Consumer Price Index for the Elderly (CPI-E), which would change the formula to reflect what seniors spend a disproportionate amount of their income on such as health care and prescription drugs.
- Require millionaires and billionaires to pay their fair share into Social Security. Currently, workers have 12.4 percent taken out of each paycheck and contributed to the Trust Fund, half paid by the employer and half by the worker. This bill would require the wealthy to pay the same 12.4 percent on their investments and business income by increasing the net investment income tax by 12.4 percent and applying it to certain business income not already covered by payroll taxes.
- Improve the Special Minimum Benefit for Social Security recipients. This bill will help low-income workers stay out of poverty by updating and increasing the Special Minimum Benefit and indexing the benefit level so that it is equal to 125 percent of the poverty line or about $17,000 for a single worker who had worked their full career.
- Restore student benefits up to age 22 for children of disabled or deceased workers, if the child is a full-time student in a college or vocational school. This legislation restores student benefits to help educate children of deceased or disabled parents (these benefits were eliminated in 1983).
- Combine the Disability Insurance Trust Fund with the Old Age and Survivors Trust fund to help senior citizens and persons with disabilities.