Doing so would run counter to President Joe Biden’s promise not to raise taxes on anyone earning less than $ 400,000. Manchin also wants to raise taxes on the rich, but he disagrees with the $ 400,000 threshold.
“You can not just say, yes, if you earn less than $ 400,000, we will not raise anything,” Manchin said. “The bottom line is, you know, we should take the cap off, increase it so we have the financial stability.”
Top Democrats want to take the opposite approach – let the current threshold be, but start applying the payroll tax again when earnings reach $ 400,000. It would be combined with a host of changes that increase the benefits, especially for the lowest incomes and most older recipients. A bill from the subcommittee chairman for Ways and Means John B. LarsonD-Conn., Reflects much of Biden’s own plan and has 200 co-sponsors.
But no one is a Republican, and Social Security actuaries estimate that Larson’s bill will only extend the trust fund’s solvency for five years. In addition, the rules for budget reconciliation preclude changes in social security taxes or benefits, so the proponents of Larson’s bill or the like would need 60 Senate votes.
Social Security and Medicare are the two biggest long-term sinks in U.S. government finances. Medicare is probably more expensive in the long run and has an even earlier expiration date for the trust fund, in 2026. But it’s harder to fix, involving all sorts of calculations to try to “bend the curve” for medical inflation.