Social Security

Expand Social Security – Great Expectations

“Expand Social Security”

That phrase creates great expectation for some people. You may be disappointed.

Under a bill being considered in congress (Social Security 2100) that “expand“ for current beneficiaries would be 2% or $29.22 per month on average. The 2019 COLA was 2.8%

The point at which Social Security benefits would be subject to income tax would be raised and indexed.

A new prospective minimum benefit would also apply. In 2019 that would be $1,264.58 per month or 125% of the poverty level, that too would be indexed. That amount is $15,174.96 per year. Is that a livable wage as Sen Sanders would put it? Raising the minimum wage to $15.00 an hour is equal to an annual income of $31,200.

The average Social Security benefit in 2019 is $1,461 for retired workers.

The COLA measure would be changed to the CPI-E which in theory reflects the spending of senior Americans, but would not guarantee a higher COLA. Over many years the net difference in the CPI-W and the CPI-E 0.39%

Also, according to the BLS

Although the CPI-E generally outpaced the official measures of inflation over the 1983–2011 timeframe, recent trends show different results. From 2006 to 2011, both the all-items CPI-E and the CPI-U rose at an average annual rate of 2.3 percent, while the CPI-W increased 2.4 percent. This turnaround was caused primarily by changes in the relative inflation rates of medical care and shelter, compared with the overall inflation rate. Specifically, the gap between medical care inflation and overall inflation has generally fallen since 2005, and shelter inflation has been rising slightly more slowly than overall inflation over the 2006–2011 period.

Nothing being contemplated precludes the need for significant saving and income in addition to Social Security.

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11 replies »

  1. .

    Do you have the bill number and/or the Congressman who introduced it? I’m interested in this… which is long overdue! ” The point at which Social Security benefits would be subject to income tax would be raised and indexed. ”

    .

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  2. .

    Do you have the bill number and/or the Congressman who introduced it?

    I’m interested in this… which is long overdue!

    ” The point at which Social Security benefits would be subject to income tax would be raised and indexed. ”

    .

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    • .

      Sorry about the double post… please delete the other one.

      If this is Sander’s bill… it’s not what I had hoped. It would not increase the income levels at which Social Security becomes taxable [which has never been indexed for inflation since 1983.] That would be a big tax cut for many seniors [especially after age 70 when IRA RMD also kick in causing many seniors to pay taxes on SS for the first time.] But apparently neither political party wants to correct that injustice.

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      • Not Sanders bill another one and it does increase and index the taxable amounts

        Dick

        Richard D Quinn Blogging at Quinnscommentary.com and HumbleDollar.com @quinnscomments

        >

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      • Here is Larson’s bill introduced in 2017 that would “Increase in threshold amounts and rate for inclusion of Social Security benefits in income” [tax cut for many seniors.]

        H.R.1902 – Social Security 2100 Act – 115th Congress (2017-2018)
        Sponsor: Rep. Larson, John B. [D-CT-1] (Introduced 04/05/2017)

        https://www.congress.gov/bill/115th-congress/house-bill/1902/text#toc-HBAE3E964B34E4490A51483EE2BEA1C1B

        ” SEC. 104. Increase in threshold amounts and rate for inclusion of Social Security benefits in income.

        *

        “(c) Base amount.—For purposes of this section, the term ‘base amount’ means—

        “(1) except as otherwise provided in this paragraph, $50,000,

        “(2) $100,000 in the case of a joint return, and… ”

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      • .

        Larson’s bill introduced in 2017 that would “Increase in threshold amounts and rate for inclusion of Social Security benefits in income” [tax cut for many seniors.]

        H.R.1902 – Social Security 2100 Act – 115th Congress (2017-2018)
        Sponsor: Rep. Larson, John B. [D-CT-1] (Introduced 04/05/2017)

        I repeatedly tried to post link and quote from this congressional bill… but those posts never showed. Basically the new income levels are $50,000 single and $100,000 couple. Unfortunately, this bill appears to have died in committee. Has it been reintroduced ??

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      • With the new Congress it’s active again.

        Dick

        Richard D Quinn Blogging at Quinnscommentary.com and HumbleDollar.com @quinnscomments

        >

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  3. This is an old strategy of the political parties. In the gun control debate, numerous laws are passed each year, often ones that are redundant or conflicting to existing laws and have no real effect on illegal use of guns. Last year NJ passed at least 6 gun laws with only one that had any real new restrictions. The main result is during the campaigns, the politicians all pointed that they passed 6 new gun laws.

    Now do this with social security and other programs. Democrats in Congress can say they passed a new law expanding social security. They can pass 10 new laws all without substance but they will get to use it on the campaign trail. Think about it. If they cannot do any significant changes to social security, just put SS in the title of a bill that spends money and therefore it must be a bill to improve social security. AARP will jump on it because it added something however so little and did not take away from social security. People will retweet and rejoicing will be heard around the senior centers.

    The following year, AARP will say it was not enough and the politicians can do it all over again.

    Liked by 1 person

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