The Social Security 2100 Act holds huge promise for America’s future
For years, conservative fiscal hawks have claimed they want to ‘save’ Social Security through ‘reforms’ — like privatization, raising the retirement age, and stingier COLA formulas — that cut benefits for future retirees. Today, Rep. John Larson (D-Conn.) and more than 200 members of Congress have proven America can do better, by introducing the Social Security 2100 Act.
Larson’s legislation would expand Social Security benefits across the board, improve the program’s cost-of-living adjustment formula, reduce income taxes on benefits, and close Social Security’s long-term funding gap by lifting the cap on income subject to payroll taxes and slightly raising those tax rates. He proposes:
- An increase in benefits for all current and new beneficiaries that is the equivalent of 2% of the average benefit.
- Changing the cost of living adjustment (COLA) formula to more accurately reflect seniors’ costs for health care and other necessities by using the CPI-E.
- Setting a new minimum benefit at 25% above the poverty line and tying it to wage levels, ensuring no one who has paid into Social Security retires into poverty.
- Increasing the threshold for taxing Social Security benefits: when non-Social Security income exceeds $50,000 (individual) or $100,000 (couple) — up from $25,000 or $32,000, respectively.
- Making Social Security taxes more equitable by applying the Social Security payroll tax to wages above $400,000. Currently payroll taxes are not collected on wages over $132,900. This would affect only the top 0.4% of wage earners.
- A gradual increase in Social Security payroll premiums beginning in 2020; by 2043, workers and employers would each pay 7.4% instead of 6.2% today. The average worker would pay an additional $26 per year.
Rep. Larson’s legislation is promising for several reasons:
- Social Security is crucial to Americans’ economic security. With employer-sponsored pensions in decline, 401(k) savings plans inadequate for most workers, and wages stagnant, Social Security will be more important than ever in the future.
- Social Security works. Compared to any private-sector system available, it wins hands-down because it is universally available, inflation-protected, and fully guaranteed. It literally lasts a lifetime, with administrative costs of less than 1 penny per dollar collected.
- Social Security is not only popular, Americans of all political stripes support expanding it. During the 2016 Presidential primaries, 73% of Donald Trump supporters, 66% of Ted Cruz supporters, 71% of Hillary Clinton supporters and 72% of Bernie Sanders supporters all agreed that “Social Security benefits should not be reduced.”
When Larson introduced identical legislation during the last Congress, the GOP majority ensured it went nowhere. But with the House now under Democratic control, Larson is chairman of the Ways and Means subcommittee on Social Security. And with more than 200 co-sponsors — including House Ways and Means Committee Chairman Richard Neal (D), who relied on Social Security payments to help pay for college after his father died — the bill stands a strong chance of passing.
In the Senate, where Richard Blumenthal (D-Conn.) and Chris Van Hollen (D-Md.) have sponsored a companion bill, Republican control means it likely won’t be considered. That may not matter: if Larson’s bill passes out of the House, not only will House Republicans be on record for or against expanding and improving Social Security, but Senate Republicans (or at least, Majority Leader Mitch McConnell) will be too.
That’s going to send a clear message to potential 2020 voters and the ever-growing crop of Democratic presidential contenders: Expanding Social Security expansion isn’t just on the table — it’s the centerpiece.
*In a nice bit of historical timing, Larson’s bill is rolling out on the birthday of President Franklin Delano Roosevelt, who established Social Security as part of the New Deal in 1935.
UPDATE: News coverage of the Social Security 2100 Act
- A Huge Step Forward In The Quest To Expand Social Security | Forbes
- A new proposal to expand Social Security would make it much better for working Americans | LA Times
- Expanding Social Security: Popular from sea to shining sea | The Hill
- House Democrats Unveil Social Security Expansion Bill With Unprecedented Support | Huffington Post
- Social Security expansion to get serious hearing in U.S. House | Reuters