WASHINGTON – Sen. Bernie Sanders (I-Vt.) and progressive Democrats on Friday reintroduced a bill to increase Social Security retirement benefits and raise the finances of the program only by taxing companies and the rich.
Sanders has introduced similar bills in the past, including in 2022, but the latest version of the legislation came out during a national debate on Social Security between President Joe Biden and congressional Republicans.
Seizing proposals like Florida Senator Rick Scott’s plan to force Congress to renew all federal programs every five years and the House GOP plan to raise the program’s eligibility age, Biden accused Republicans of wanting to use the “debt ceiling” negotiations to force cuts. popular program. TThe GOP has steadfastly denied that it will include Social Security in the debt-ceiling discussion — a concession that Biden has voiced. ready to accept in his State of the Union address last week.
Sanders’ legislation pushes the boundaries of the current debate over Social Security that still lingers on the left by asking Republicans to respond to the prospect of bigger benefits and bigger taxes.
“At a time when nearly half of older Americans have no retirement savings and nearly 50 percent of our nation’s seniors are trying to live on less than $25,000 a year, our job is not to cut Social Security,” Sanders said in a release. “Our mission is to expand Social Security so that every senior in America can retire with the dignity they deserve and every disabled person can live with the security they need.”
Sanders’ Social Security Expansion Act is unlikely to become law, but it signals a progressive position — namely that there is no need to cut benefits in the future in order to close the gap between the budget and projected income. The bill is an implicit response to complaints from conservative policy experts that the program’s funding gap cannot be closed entirely through tax increases on high-income earners.
Brian Riedl, a fiscal policy scholar at the conservative Manhattan Institute, acknowledged last week that Sanders’ 2022 proposal, similar to the new one, would extend the program’s solvency by several decades.
However, Riedl wrote on Twitter“That leaves few ‘tax the rich’ options to close the Medicare gap that is 2-3 times bigger. The math doesn’t work.”
Unlike most other federal programs, Social Security is self-funded, meaning it cannot borrow to pay for the benefits it promises.
As a result of the continued retirement of the historically large Baby Boomer generation, the program is scheduled to fall short of the revenue needed to pay out future benefits in the coming years. If Congress fails to make changes to the program, Social Security will only have enough money to fund 80% of its scheduled benefits. starting in 2035. This will be a 20% profit cut across the board.
To make sure that the program can pay benefits in the future and some, Sanders proposed that earners over $250,000 be subject to a payroll tax of 12.4% while not counting new taxable income towards people’s benefits. This year, only $160,200 of wage income is subject to payroll taxes. Sanders proposed to impose other taxes as well, such as subjecting investment income of more than $200,000 to payroll taxes.
Sanders issue a letter Monday from the Social Security Office of the Chief Actuary stated that the legislation “would be beyond our means [Old Age, Survivors, and Disability Insurance] program to pay scheduled benefits in full and on time over the 75-year projection period.
In addition, Sanders’ new bill would result in Social Security allowing him to fund a broader benefit formula that would increase the benefits of low and moderate incomes by approximately 15%. They will also link the benefit measure to a consumer price index designed to account for the higher cost of living for older people.
Republicans have signaled since last year that they will demand big cuts to federal spending in exchange for supporting legislation to raise the federal government’s debt limit this year. The Treasury Department reached the limit last month and took “extraordinary measures” to pay the government’s bills. If the cap isn’t lifted, the government could default on payments to bondholders as well as beneficiaries of federal programs like Social Security. Financial crises and recessions can cause it.
In recent weeks, House Speaker Kevin McCarthy (R-Calif.) said Social Security and Medicare should be “off the table” in debt ceiling negotiations, despite lawmakers such as House Budget Committee Chairman Jodey Arrington (R-Texas) previously saying so. they should be in the mix.
In hallway interviews, Republican lawmakers said last week that they don’t want to touch the program, but Congress will eventually have to do something about it — and Democrats should support cutting benefits as part of some future deal.
“There is no question, long term, that Social Security and Medicare are going to be bankrupt in 10 years,” Rep. Bob Good (R-Va.) told HuffPost last week. “No one is talking … about reducing Social Security and Medicare benefits for people who are retired now, they are retired, but long term, they need to be changed to be solvent for the future.”
Rep. Dusty Johnson (RS.D.), a member of the bipartisan Problem Solvers Caucus, suggested that Republicans would be open to increasing taxes if they were part of bipartisan gains.
“What we do know is that we don’t do anything that warrants insolvency,” Johnson said. “We know that any solution is going to be unpopular with half of America. So there’s going to be a comprehensive solution here that will take some ideas from the right and some ideas from the left to get us to a place of responsibility.