Social Security - increase your benefits
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Increase Your Benefits
Summary: Every projection shows Social Security is running out of money and our future benefits will have to be reduced. But a new bill in Congress will stabilize and increase your benefits for the rest of your life. After reading this article, tell your congressman or congresswoman to pass the Social Security 2100 Act. It doesn't matter what political party you belong to -- your retirement depends on this.
Securing Social Security's Future
Feeling their progressive
oats after a few years in the wilderness, House Democrats on Tuesday
revived a proposal to increase and expand Social Security benefits while
making the program more solvent for the foreseeable future.
The Social Security
2100 Act, introduced by Rep. John Larson (D-Conn.) with 200 Democratic
co-sponsors, would make the program more relevant to today’s workers by
increasing benefits for all retirees, improving cost-of-living increases
by changing the formula, and increasing the minimum benefit for the
lowest-income households. (Actually, it’s re-introduced: A nearly
identical version was brought before the then-GOP controlled House in 2017
and went nowhere.)
Although all employees
would pay a slightly higher payroll tax over time, the measure would make
sure that the richest Americans, who largely get a pass on their
responsibilities to fund the program, would finally pay their fair share.
We’ll get to the details in a moment.
Observing that “Congress
has added no new protections nor voted increases in benefits for over half
a century,” Nancy Altman, president of the advocacy group Social
Security Works, called the bill’s introduction “a new and positive
chapter” in the history of the program.
Let’s hope she’s right.
Republicans in Congress have spent years — really, decades — bashing
the program as an undeserved “entitlement” and suggesting that it’s
responsible for federal budget deficits (untrue, as a matter of law) and
sluggish economic growth (untrue, as a matter of fact).
Back in October, Senate
Majority Leader Mitch McConnell (R-Ky.) called Social Security and the
government’s other social insurance programs, Medicare and Medicaid, “the
real drivers of the debt” and called for them to be adjusted “to
the demographics of the future.”
He was talking about
cutting benefits, but he wasn’t alone. Sen. Marco Rubio (R-Fla.)
and former House Speaker Paul D. Ryan (R-Wis.) each had made
exactly the same point in previous months.
The American public
responded to these threats to their retirement security, among other
noxious GOP policies, by handing the Republicans an epic beat-down at the
polls in November, giving Democrats the House majority.
In political terms,
expanding Social Security is a good counterweight to the grousing by
billionaires and their congressional mouthpieces about proposals to raise
their taxes. Most recent case in point: putative presidential candidate
Howard Schultz, the founder of Starbucks, declaring Elizabeth Warren’s
proposal for a wealth tax on the super-rich “ridiculous.” Schultz’s
estimated net worth is $2.9 billion.
As Larson said at the
launch event for the bill Wednesday, years of economic stagnation for the
middle class and the shifting of responsibility to provide for their own
retirement has “heightened the urgency” for improving Social Security.
Let’s examine the details
of his plan.
The big picture first. According
to the office of the chief actuary of Social Security, the authority on
all such calculations, Larson’s bill would ensure Social Security’s
solvency for at least the next 75 years, but in practical terms into the
almost limitless future. The program’s trust fund would reach a steady
state of about $2 trillion in present value by 2063 and stay there,
providing a cushion of about two and a half times annual benefits.
The bill does so via modest
tax increases in middle- and working-class workers and much sharper
increases on the wealthy. Under existing law, everyone pays a payroll tax
of 12.4% of wage and salary income (split evenly between employer and
employee), up to an earnings cap that is set for 2019 at $132,900. No one
earning more, even our millionaires and billionaires, pays more than the
maximum of $16,480. For someone earning, say, $1 million in wages, the
payroll tax comes out to only 1.64%.
Larson would increase the
payroll tax gradually, by one tenth of a percentage point a year starting
in 2020, to an employer/employee combined 14.8% by 2043. On the other
hand, Larson would reduce the income tax on Social Security earnings,
giving middle- and lower-income workers a bit back.
The wealthy would pay the
tax on all wage earnings up to the current cap, and wages above $400,000.
Since the cap tends to increase every year due to inflation, the actuaries
estimate that by 2048 it will reach $400,000, and therefore at that point
everyone will be paying the tax on all their wage income. That’s the
source of the biggest gain in the program’s income, which funds the
The most important increase
is an improvement in Social Security’s minimum benefit, which was
established in 1972 for the lowest-income workers. The minimum is indexed
to price inflation, but workers’ initial benefits are indexed to wage
inflation, which tends to run a bit higher.
As a result, the minimum
benefit, which currently is about $830 a month or $9,960 for workers with
30 years of earnings, has fallen short of the federal poverty line and of
the lowest benefit earned by even very low-income workers. Almost no one
has qualified for it since the 1990s. Larson would raise the minimum to
125% of the federal poverty line, which would set it at about $15,175 a
Larson also would increase
all benefits and key annual cost of living increases to a consumer price
index that overweights goods and services especially important for
seniors, such as medical care. That index tends to rise by about 0.2
percentage points faster than the traditional CPI used by Social Security
The actuaries calculate
that Larson’s measure would increase the benefits of the lowest-earning
workers by as much as 44% compared to current benefits (mostly due to the
improved minimum), for low-income workers averaging $23,000 in lifetime
annual income by about 10%, for moderate-income workers with $52,000 in
lifetime annual income by about 2.1%, and those earning the maximum
taxable wage by about 1.5%. The richest wage earners would get a nice
percentage bump of up to 8.3%, but that’s mostly because their benefits
are very low compared to their total incomes, and they’d receive a bit
more in recognition of their higher taxes.
important about the Larson bill is the line it draws between the
Democratic/progressive approach to Social Security and that of the
Republican Party. Republicans like McConnell. They talk incessantly about
the necessity of reducing cost-of-living increases, about how Social
Security recipients are making out like bandits, and about how the nation
can barely afford to keep them out of poverty.
The subtext in all these
arguments is that the nation needs to be made safe for millionaires and
The math done by Social
Security’s own experts shows that the nation can well afford to make
retirement even more secure. Under current law, the cost of Social
Security is estimated to rise from about 5% of gross domestic product
today to 6.12% in 2092. Larson’s measure would raise it to about 6.44%.
You really want to tell me that difference will bring about the downfall
of the republic?
The nation’s political
leaders in 1935, led by Franklin D. Roosevelt, understood the necessity of
keeping seniors out of poverty, because they had the example of the
evisceration of the American working class in front of their eyes. That
example seems to have faded for our political leaders, but the sponsors of
the new bill had a way of underscoring the program’s heritage.
Wednesday, Jan. 30, the day of its introduction, was the 137th anniversary
of FDR’s birth.
by Michael Hiltzik,
Los Angeles Times,
February 6, 2019, Page C1. An online version of the article can be
found here, under the title "A new proposal to expand Social Security
would make it much better for working Americans."
Hiltzik and colleague Chuck Philips shared the 1999 Pulitzer Prize for
articles exposing corruption in the entertainment industry.
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