How President Biden could help usher in Social Security changes, except we’re forgetting something ….

AND THAT IS making Social Security fully sustainable first.

Under his (Biden) plan, eligible workers would get a guaranteed minimum benefit equal to at least 125% of the federal poverty level.

People who have received benefits for at least 20 years would get a 5% bump.

Widows and widowers would receive about 20% more per month.

Biden also proposes changing the measurement for annual cost-of-living increases to the Consumer Price Index for the Elderly, or CPI-E, which could more closely track the expenses retirees face.

To pay for those higher benefits, Biden would apply Social Security payroll taxes to those making $400,000 and up. In 2021, workers generally pay the 6.2% Social Security tax on up to $142,800 of wages. (Earnings between $142,800 and $400,000 would not be subject to those levies under the plan, though that gap would eventually close over time.)

Source: How President Biden could help usher in Social Security changes

Why can’t Congress address the fundamental issue?

“Lawmakers have a broad continuum of policy options that would close or reduce Social Security’s long-term financing shortfall. Cost estimates for many such policy options are available at http://www.ssa.gov/OACT/solvency/provisions/.

The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust to them. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits. Social Security will play a critical role in the lives of 65million beneficiaries and 180 million covered workers and their families during 2020. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations” SOURCE: Social Security Trustee Report 2020 (and scores of prior years).

One comment

  1. Totally on board fixing the funding.
    I also thought that paying 125% of the federal poverty scale might be a good ideal until I started investigating.
    First, the average benefit for 2019 was about $1400. That works out to be slight more than 125% of the federal poverty level. I am not sure if it is the median average or not, but lets assume that it is. That would mean that 50% of all recipients would see some increases in the their benefits. Where is all that money coming from again?
    Second, an able body worker (not disabled nor a widower) who worked at just the bare minimum at a federal minimum wage job for only the 40 qualifying quarters required to qualify (10 years) over their lifetime, do they get the 125% benefit too? The current (2019) Social Security minimum benefit is $41.90 a month or $502.80 per year. Are they going to get bumped up to about $16,000 / yr because they chose not to work, go to jail, or work under the table? How many other government social and welfare programs will they also qualify for? Are they also going to get a 5% “raise” after 20 years in addition to the annual COLAs?
    Fix the current fund issues before giving out more benefits.

    Like

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