Social Security What's Buzzing

How Biden, Sanders and Warren’s plans to strengthen Social Security compare

Written by Diane Archer

Today, one in five older adults struggle to survive on an annual income of $13,500, And, 8.8 percent of older Americans live in poverty; half of Americans 55 and older have no retirement savings. The three Democratic presidential frontrunners–Bernie Sanders, Joe Biden and Elizabeth Warren–all have plans for strengthening Social Security. It’s helpful to understand how their plans compare at this time.

To be clear, it is still early days and plans are still evolving. Vice President Joe Biden’s thinking on Social Security has shifted dramatically for the better, but he has not come out with a detailed plan. Senator Bernie Sanders has long had a bold vision. Senator Elizabeth Warren, with the benefit of Sanders’ vision, has taken it to a whole new level. Meanwhile, Republicans have plans only to privatize Social Security and cut it.

Privatizing Social Security: Joe BidenBernie Sanders and Elizabeth Warren all recognize that one way to put Social Security at serious risk is to privatize it in any way shape or form–effectively put some or all of your Social Security contributions that you pay today as premiums towards Social Security life insurance, disability insurance, and retirement premiums, into Wall Street investments.

That conservative plan substitutes people’s guaranteed Social Security benefits for whatever is left over after brokerage fees are paid, money that is subject to the ups and downs of the stock market. Moreover, privatizing Social Security will greatly increase Social Security’s projected shortfall, since the private investment in the market would divert money now going to pay benefits.

Means-testing Social Security benefits: Joe Biden once appeared to support means-testing Social Security benefits, a Republican plan for cutting or eliminating benefits for wealthier Americans. Now Biden, as well as Sanders and Warren, oppose benefit cuts. While means-testing Social Security benefits may sound reasonable, it turns Social Security from an earned benefit, based on work, not need, into a welfare program.

We already have a needs based program for low income seniors and people with disabilities – the Supplemental Security Income program.  Social Security is designed to benefit everyone.  Changing that would end Social Security as we know it.

Raising the full retirement age: Biden has said in the past that he is willing to consider raising the full retirement age for Social Security benefits, as many Republicans propose, though his opposition to benefit cuts suggests he no longer supports this unfair cut.

Sanders and Warren appreciate the dangers of raising the full retirement age for Social Security any further. It used to be 65. For people born in 1960 or later, it will be 67. Republicans would like to raise it to 70. But, raising the full retirement age for Social Security is a disguised across-the-board benefit cut for all retirees.

Although it may sound like retirees would simply have to wait longer to get their full benefits, that is inaccurate.  Even if you work until age 70 or later, you get lower benefits because Congress changed the retirement age listed in the statute.  You never catch up.

Worse, this form of benefit cut is especially harmful to those in physically demanding jobs and those who leave the work force early to care for family members. Raising the full retirement age means that people who must claim benefits early will receive even less than they receive under current law – amounts which are already much too low.

Inflation-protecting Social Security benefits: Today, Social Security benefits increase each year based on the Consumer Price Index experienced by urban workers, which means that they do not increase as much as the typical retiree’s costs increase.

Sanders and Warren want to adjust Social Security benefits upward, based on a cost of living adjustment experienced by older adults. That would likely – and appropriately — increase the inflation adjustment since older adults and people with disabilities spend more on health care costs, which are increasing faster than most other goods and services.

Republicans, in contrast, want to adjust Social Security benefits downward with a cost of living adjustment that imagines somehow that retirees could redirect their spending to lower-cost goods and services, a “chained CPI.”

Increasing Social Security benefits: Biden says he supports increasing Social Security benefits for some Americans, including retirees with low incomes who worked at least 30 years. He would increase their Social Security benefits to at least 125 percent of the federal poverty level. He would also increase benefits for the oldest Americans and for widows and widowers.

Warren and Sanders propose to increase every American’s Social Security benefits. Warren would increase benefits to all by $2,400 a year ($200 a month). Sanders would increase benefits to all by about half that amount.

In addition, like Biden, Warren proposes to increase benefits for those who are widowed. She also proposes to provide credit towards future benefits for those who take time out of the paid workforce to be family caregivers and to restore the student benefit.  Like Biden and Sanders, she wants to increase benefits for people who earned low incomes pre-retirement, so that their Social Security benefits in retirement are above the federal poverty level.

Increase the Social Security benefits of some public-sector workers: Today, teachers and other public sector workers, in jobs not covered by Social Security, receive less in Social Security benefits on the work they do that Social Security covers. Biden and Warren propose to repeal the applicable provisions so that public-sector workers’ benefits are calculated without regard to the non-covered work.

How to pay for Social Security expansion? Biden, Sanders and Warren all support raising the cap on Social Security contributions, which is currently at $132,900. Biden’s proposal is vague, saying only that he wants wealthy Americans to pay the same Social Security tax rate as middle-income Americans. Sanders and Warren are more specific, proposing that those who earn more than $250,000 pay on those large salaries.

Sanders proposes that people who earn more than $250,000 a year contribute at a rate of 6.2 percent, with their employers matching their contributions at the same rate, as is the case with lower-wage workers. Warren proposes that people who earn more than $250,000 a year contribute at a rate of 7.4 percent, also matched by their employers. Over about two decades that gap between $132,900 and $250,000 closes, at which point all workers will contribute to Social Security on all of their wages (though, under the Warren plan, at a higher rate.)

In addition, Sanders proposes adding a tax of 6.2 percent and Warren, an additional 14.8 percent, on investment income for the wealthiest Americans. Of note, 98 percent of working Americans would not see any increase in their taxes. Yet, the Warren plan ensures that all Social Security benefits can be paid in full and on time for more than a quarter of a century, and the Sanders plan, for more than half a century.

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3 Comments

  • First do no harm. None of these plans eliminate the taxing of Social Security benefits. What’s the point in collecting more if they are just going to tax it back?

    • …agreed, along with making SS benefits 100% immune to garnishment, including for educational loans which was changed under the Clinton Administration (only those on disability can have their remaining loan balance discharged and that was a court ruling).

    • …a major issue with how living cost adjustments as made is that they do not take into account three of the largest expenses many have to deal with, medications, supplemental insurance, and housing. Last year I had my entire cost adjustment (one of the largest such adjustments in the last three – four years) go totally to an increase in rent.

      Having been one of many who worked in low paying occupations all my life there was little if anything to put into retirement savings, and what many like myself had, was wiped out by the recession so Social Security is our only source of income.

      If there is an increase we should not be penalised by losing access to other programmes because it suddenly puts recipients above a maximum threshold as that would be no improvement. For example where I live which I am below the threshold for our state’s Medicare Savings Plan (funded by Medicaid) which covers the 135$ premium (there really should be no premium for seniors or the disabled) and other charges that would require supplemental insurance. The flat 200$ benefit increase which Mrs Warren mentions would pretty much be wiped out as many on such programmes (like myself) would likely lose our eligibility and be required to pay the monthly premium and other associated costs currently covered. It could also change what we have to pay for assisted housing as that is based on income so some may actually see a negative gain.

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