Rep. John Larson, D-Conn., and other lawmakers discuss the Social Security 2100 Act, which would include increased minimum benefits, on Capitol Hill on Oct. 26, 2021.
Drew Angerer | Getty Images News | Getty Images
Social Security reached a new milestone when it was 87 . reachede anniversary on Sunday.
The program was signed by President Franklin Delano Roosevelt on August 14, 1935. Today, it offers monthly checks to more than 65 million beneficiaries.
But it now faces an approaching deadline after which the program will no longer be able to pay out the full benefits if Congress doesn’t act sooner.
According to the program administrators, only 80% of benefits will be paid by 2035.
House Democrats John Larson of Connecticut and Pramila Jayapal of Washington teamed up on Monday to call to introduce a bill to expand Social Security for a vote this fall.
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That proposal, called Social Security 2100: A Sacred Trust, would extend benefits, which hasn’t been done in about 51 years, noted Larson, who proposed the bill and who serves as chair of the House Ways and Means Subcommittee on Social Security.
“It was way too late to make sure we improve a program they need, especially during this pandemic,” Larson said of the program’s beneficiaries.
Jayapal, who serves as chairman of the progressive caucus, pushed for action next month.
“When Congress returns from recess in September, we must put this bill in the committee and then put it to the vote,” Jayapal said.
How Bill Would Expand Retirement Benefits?
Rep. Pramila Jayapal, D-Wash., participates in a TV interview at the US Capitol on November 4, 2021.
Elizabeth Frantz | Reuters
The latest Social Security Act 2100 filed by Larson aims to improve Social Security benefits in multiple ways.
It calls for all checks to be increased by about 2% of the average benefit. At the same time, it would also raise the minimum benefit above the poverty line and link it to current wage levels.
The measure of annual cost-of-living adjustment would be changed to better keep pace with the costs faced by retirees.
Widows and widowers would also receive more generous benefits. It would repeal rules that reduce benefits to civil servants, including the provision for eliminating windfall gains and offsetting government pensions.
The bill also calls for the provision of informal care loans to people who make time to care for children or other family members.
Benefits for students would be extended to 26 years. Children living with grandparents or other relatives would also have greater access to benefits.
The bill also calls for ending the five-month waiting period for disability benefits.
To pay for the benefit increases, the bill calls for the reintroduction of the Social Security payroll tax on wages above $400,000, which would affect an estimated 0.4% of wage earners.
Currently, wages are taxed up to $147,000 for Social Security in 2022. Employers and employees each pay 6.2% tax on wages, for a total of 12.4%.
Dual support may be hard to find
Social Security 2100: A Sacred Trust currently has 202 Democratic co-sponsors in the House of Representatives.
It is one of many democratic proposals that aim to tackle social security reform. While the proposals vary, each tries to reconcile the benefits and make the rich pay more into the program.
One key difference, however, is how long they would extend the program’s solvency. The Social Security 2100 Act would extend the exhaustion date to 2038 from the current scheduled date of 2035. Another proposal led by Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., would extend the program’s solvency beyond 2096 while also expanding benefits.
While Democrats can negotiate the details of their proposals, they will also face Republicans who have expressed opposition to expanding benefits and raising taxes.
sen. Rick Scott, R-Fla., has been criticized for a proposal to halt government programs such as Social Security and Medicare every five years. During a Senate hearing in June, he denied any intention to cut benefits.
“I proposed that Congress should rightly review these programs,” Scott said. “I will never support cuts to Social Security, Medicare, or Medicaid.”
Either way, support from both sides will be needed to pass any changes to the program in both chambers. But it remains to be seen which solutions both sides can agree on.
“Any Social Security reform that can be implemented, that can be implemented, will be a compromise,” said Andrew Biggs, a senior fellow at the American Enterprise Institute, who was recently nominated to the Social Security Advisory Board by President Joe Biden. CNBC.com interview.