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Tag: Social Security 2100 Act

  • California lawmakers ask Congress to expand Social Security

    California lawmakers ask Congress to expand Social Security

    CNBC reports that California lawmakers just approved a resolution asking Congress to expand Social Security. The California legislators support Congressman John Larson’s Social Security 2100: A Sacred Trust bill. If passed, the Social Security 2100 Act would require people with annual incomes over $400,000 to contribute more to Social Security.

    Congressman Larson’s bill, H.R. 5723, would strengthen Social Security, ensuring that it remains solvent until 2038, and that it provides better benefits, about a two percent increase in benefits on average. The minimum benefit would increase to 25 percent above the federal poverty level. The bill was last introduced in October 2021, with widespread Democratic Congressional support, including 202 co-sponsors.

    All but two California Democratic members of the House of Representatives are co-sponsors of Social Security 2100, Nancy Pelosi and Scott Peters.

    Until 2035, Social Security has enough money in its Trust Fund to pay full benefits. After that, it would only be able to pay 80 percent of benefits, unless Congress shores it up. Because Social Security is a national treasure, beloved by Democrats and Republicans alike, Congress has always ensured its solvency.

    But, Social Security payroll contributions are capped at $147,000 in annual income this year. They rise every year. Workers and their bosses each pay 6.7 percent of income towards Social Security up to the limit.

    The Social Security 2100 Act would require people with incomes over $400,000 to pay into Social Security on wages up to $147,000 and. again, on wages over $400,000. It’s an equitable way to strengthen Social Security. Today, billionaires and millionaires pay no more into Social Security than people earning $150,000 a year.

    Senators Bernie Sanders and Elizabeth Warren have their own bill in the Senate that would strengthen Social Security. It would extend the solvency of the Social Security Trust Fund 75 years. It would also increase benefits about $200 a month. This year, it would have required people with incomes of $250,000 and more to contribute into Social Security like everyone else, up to $147,000 in income and, again, on income of $250,000 and above.

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  • Health care costs eat into your 2021 Social Security benefits

    Health care costs eat into your 2021 Social Security benefits

    Mark Miller writes for his subscription blog, RetirementRevised.com on how cost of living adjustments to Social Security are far smaller than Medicare premium cost increases. Medicare’s costs increase far faster than the rate of inflation. Only if Congress increases Social Security benefits can most older Americans maintain their standard of living from one year to the next. 

    As we have reported, your Social Security benefit will rise 1.3 percent in 2021 or an average of $20 a month. The 2021 standard Medicare Part B monthly premium will increase $3.90 to $148.50 for anyone who did not earn more than $88,000 a year in 2019.

    People with smaller Social Security benefits will likely not see an increase or see only a de minimis increase in their Social Security benefits. Fortunately, thanks to a “hold harmless” provision in federal law, people cannot see their Social Security checks decrease. So, no one with incomes under $88,000 will see an increase in their Medicare premium larger than the increase in their Social Security benefits.

    The average Social Security benefit increase in the last 12 years has been just 1.4 percent, even though average Medicare cost increases have been far higher. And, Social Security increases over the past ten years have been painfully small. In three of those years, Social Security benefits did not increase at all. In one of those years, benefits increased three-tenths of a percentage point.

    Because Social Security cost-of-living increases are tied to a basket of goods whose costs do not increase as quickly as health care costs, and because older adults use more health care than younger people, most older adults struggle to maintain their standard of living as they age. To help address this issue, Congressman John Larson’s Social Security 2100 Act would increase Social Security benefits by 2 percent; and, it would reduce taxes on Social Security benefits.

    This year, the Medicare premium is rising $3.90, about 25 percent of what it otherwise would have increased. Congress limited the amount the 2021 premium could increase in a COVID relief bill.

    If you want Congress to increase Social Security benefits, please sign this petition.

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  • Social Security benefits are relatively small

    Social Security benefits are relatively small

    As often as they can, Republicans in Congress argue to “reform” Social Security benefits. That’s code for cutting benefits.  In truth, Social Security benefits are relatively small.

    Social Security benefits are earned benefits, with people contributing over their lifetime into the Social Security Trust Fund. Only money from that Trust Fund goes to pay people’s Social Security benefits. So, Social Security benefits do not affect the deficit.

    The principal reason that Social Security faces a long-term shortfall is that more people are relying on it. There are more older adults and more people with disabilities than ever before. So, Social Security is paying out more money than it has in the past. Social Security’s costs are about five percent of GDP today and are projected to rise to six percent in the 2030’s.

    The overwhelming majority of Americans, along with Democrats in Congress, believe that Social Security needs to be expanded, not cut. While Social Security faces a long-term shortfall, there is no need to cut benefits. As of now, it has enough money to pay out benefits until 2035. And, after that, it has enough money to pay out three-quarters of the benefits it owes, if nothing is done to shore up the Trust Fund.

    Social Security protects workers and their families when they retire or have a disability or die. Here are five important things to remember about Social Security from the Center on Budget and Policy Priorities.

    Social Security benefits are relatively small. They average under $1,500 a month and under $18,000 a year. As a result many older adults live in poverty or near poverty, when you factor in their out-of-pocket health care costs.

    The majority of people depend heavily on Social Security when they retire or become disabled. About one in two older adults receiving Social Security depend on it for half or more of their income. About one in four older adults depend on it for 90 percent of their income. And, around one in four older adults has an annual household income under $20,000. Just one in ten retiree households has an annual income averaging $230,000.

    Including Social Security income, the median household annual income was around $44,000 in 2012. If you look at median household income by race and ethnicity, white and Asian households had far higher incomes than Black and Latino households, $47,000 and $48,000 respectively as compared to $32,000 and $30,000 respectively.

    For many reasons, means-testing Social Security benefits would not help to shore up the Social Security Trust Fund. There are so few retiree households with significant incomes that if you only means-tested retirees in the top 10 percent of income earners, it would not generate a meaningful amount of money. To generate adequate revenue, the federal government would have to reduce benefits of households with low incomes. Moreover, administrative costs would be high. 

    Only Social Security provides the majority of older adults guaranteed income for as long as they live, with some inflation protection. Fewer and fewer retirees can count on defined benefit plans in addition to Social Security income. Defined benefit plans pay people a guaranteed amount every year in retirement. Instead, people tend to have defined contribution plans, if they have an additional income source in retirement. These plans have no guarantees. If the stock market falls, people can easily lose income they need. If it collapses, people might have to depend entirely on Social Security.

    Several other developed countries provide higher Social Security benefits to their citizens than the United States. The United States might be the wealthiest country in the world, but it ranks in the bottom third of developed countries in terms of the generosity of its retirement benefits. While Social Security benefits in the US are better than in Japan, Mexico and the United Kingdom, they are far less generous than in the majority of developed countries, including Turkey, Italy, Austria and Spain. Social Security benefits replace, on average, less than half of Americans’ income. On average, other developed countries replace 58 percent of their citizens’ income.

    Most of the Democratic presidential candidates are proposing to expand Social Security benefits. Senator Warren has a plan to increase benefits by $200 a month. Others support Congressman Larson’s Social Security 2100 Act.

    Because Congress raised the age of eligibility for Social Security from 65 to 67 and because Medicare costs are rising, people retiring down the road will receive less from Social Security than people today. People born in 1960 will not receive full Social Security retirement benefits until the age of 67. In simple terms, on average, retirees are losing two years worth of Social Security benefits–more than $35,000 in income–which retirees born in 1937 and earlier received.

    If you would like Congress to expand Social Security, please sign this petition.

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  • Top Democratic presidential candidates support strengthening Social Security

    Top Democratic presidential candidates support strengthening Social Security

    The top four Democratic presidential candidates may be split on health care reform, two favor the public option and two favor Medicare for All. But, Nancy Altman writes in Forbes that all four top candidates, Bernie Sanders, Elizabeth Warren, Joe Biden and Pete Buttigieg, support strengthening and expanding Social Security. No matter who becomes the Democratic candidate, if you support expanding Social Security, it will be critical to vote.

    Social Security is a national treasure that virtually all Democratic members of Congress support expanding. In fact, nine out of ten members of the House of Representatives support Congressman John Larson’s Social Security 2100 Act. If enacted, Social Security benefits would rise, and its Trust Fund would be strong for many many decades.

    Increasing Social Security benefits would  help older Americans in retirement. Today, a large portion of older adults struggle to afford their basic needs. Few people can rely on pensions or retirement savings. Many rely almost exclusively or heavily on Social Security for their income. Social Security income is guaranteed and cost-effective, unlike Wall Street stock investments and 401(k) plans.

    Most Republicans in Congress would like to cut Social Security benefits even though their constituents overwhelmingly support Social Security. They strive to create a wedge between older adults and younger Americans. In fact, young Americans need Social Security both when they retire and, now, to help support their parents and grandparents. Without adequate Social Security benefits, young Americans would be left worrying even more about their parents’ financial well-being.
    Social Security is social insurance, meaning that everyone contributes to it and everyone who contributes benefits. It builds social solidarity. Americans all count on it for themselves and their families. Social Security is an earned benefit, unlike other federal and state social programs that are for particular populations in need. For our personal and collective security, we must ensure its continued well-being.
    Social Security benefits need to be coupled with coverage for home and community-based care. Medicare for All, which Senators Sanders and Warren support, covers these long-term services. Buttigieg proposes giving people $90 a day to help with these costs, which is far more than the US guarantees older adults today. But, his plan does not come close to providing the most vulnerable Americans with adequate coverage.
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  • 2020 Social Security benefits should rise, but checks may not

    2020 Social Security benefits should rise, but checks may not

    Social Security transformed the nation, providing working families a basic measure of economic security when wages are lost in the event of old age, disability that prevents substantial gainful employment, or death.  One of Social Security’s most important features is that its benefits are adjusted every year automatically to offset increases in inflation, so that the modest but vital benefits do not erode over time. As a result, 2020 Social Security benefits should rise.

    It is crucial to understand that Social Security cost-of-living adjustments are not increases.  They are intended simply to allow people to tread water, to maintain their purchasing power. Unfortunately, the government’s cost-of-living adjustment for Social Security is based on inflation experienced by urban wage earners and clerical workers. That is because in 1972, when the automatic adjustments were enacted into law, the Bureau of Labor Statistics, the agency that keeps track of inflation, only prepared that one index.

    Of course, retirees and people with disabilities who are unable to work full-time have very different expenditures from urban workers and even from the general population.  On average, they have higher health care and prescription drug costs, which have been going up much more rapidly than general inflation. Overall, they spend less of their fixed incomes on the latest smart phones and flat screen televisions, where cost increases tend to be lower than general inflation.

    Consequently, retirees and people with disabilities tend to experience higher increases in their cost of living than younger workers do. Because they generally experience higher increases in their cost of living than workers, their Social Security adjustments are more often than not inappropriately low. As a result, Social Security beneficiaries are not even treading water, but rather losing ground. Nevertheless, even inadequate adjustments are better than none.

    The actual adjustment that will take effect this January cannot be calculated precisely until October, because it is based on the inflation rate of the third quarter of this year, which runs from July 1 to September 30, compared to the third quarter of last year.  Obviously, inflation during the month of September will not be known until this month ends.

    Until the size of the automatic adjustment is announced in the second half of October, we won’t know the precise percentage increase of Social Security benefits.  However, it is possible to provide a quite accurate estimate now of what the adjustment is likely to be.

    In April, Social Security’s actuaries projected that the  cost-of-living adjustment beneficiaries would receive in January, 2020 would be 1.8 percent, or about a $24 monthly increase for an average benefit, which  is $1,353.68. However, we have now completed two of the three months of the third quarter and so can make a more accurate estimate of the size of the adjustment.

    In recent months, thanks in large measure to President Donald Trump’s trade war with China, the economy is slowing and inflation has been lower. Consequently, 1.8 percent is likely to be the highest the January increase will be. Depending on what happens in September, it is likely to be closer to 1.5 percent, or about $20 more a month for an average benefit.

    Moreover, millions of people will not experience that full increase.  Indeed, some may see no increase at all.  That is because of rising health care costs. Most people with Medicare who receive monthly Social Security benefits have their Medicare Part B premiums deducted directly from those Social Security payments.  For these people, Congress has provided that the annual increase in the Medicare Part B premium must be no larger than the Social Security cost-of-living adjustment. But it can be as large. They can’t go below zero and lose some of their Social Security benefits, but they can certainly see their cost-of-living adjustment go completely to rising health care costs.

    It is long past time to enact a more accurate cost-of-living adjustment for Social Security. More than three decades ago, in 1987, Congress directed the Bureau of Labor Statistics to develop a cost-of-living increase that measured inflation experienced by older adults. The Bureau complied and now each year publishes the Consumer Price Index for the Elderly, or the CPI-E. Congress should complete what it started and enact legislation that utilizes the CPI-E to adjust Social Security’s benefits.

    Fortunately, Democrats are squarely in favor of this change. Bills authored and co-sponsored by Democrats in both the House of Representatives and the Senate have been introduced that do just that. Indeed, one of those bills, the Social Security 2100 Act, authored by Rep. John Larson (D-CT), the chairman of the House Social Security Subcommittee, and cosponsored by 210 of his Democratic colleagues, is likely to be voted out of the House this fall. The bill also expands benefits across the board, while ensuring that all benefits can be paid in full and on time through the year 2100 and beyond.

    And they should go one big step more. A solid majority of House Democrats support improving Medicare and extending it to everyone. They should pass that legislation, as well.

    After a lifetime of work, Americans should have enough guaranteed Social Security to maintain their standards of living. And they should have expanded Medicare so no one is one illness away from bankruptcy.

    The good news is that Social Security beneficiaries will receive a cost-of-living increase this January, small though it will be. The better news is that Democrats are fully behind not only improving the cost-of-living adjustment, but also expanding Social Security and Medicare. When that happens, all of us will be able to keep our heads well above water.

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  • Top Social Security questions and answers

    Top Social Security questions and answers

    The New York Times answered the top Social Security questions from its readers.

    Question 1. Is Social Security in good financial shape?

    Social Security is in good financial shape today and at least for another 15 years. By 2035, however, Social Security will face a shortfall. If Congress does not make changes, Social Security would be able to pay out only 80 percent of scheduled benefits. Congress can and always has made changes to keep it paying out full benefits. 

    There is good reason for Congress to act. According to Richard W. Johnson at the Urban Institute, unless Congress acts, another one-third of retirees could be pushed into poverty. Fortunately, there’s a bill in Congress, the Social Security 2100 Act that would strengthen Social Security over the long term. All it would take is increasing payroll tax rates by 0.1 percent a year through 2043 and applying payroll contributions to all earnings over $400,000.

    In 1977, Congress intended for Social Security to cover 90 percent of people’s earned income. But, it now only covers 83 percent of wages. The average wage has not increased as quickly as wages above the Social Security cap, which is $132,900 today.

    Question 2. How do Social Security spousal benefits work?

    If you have been married for at least one year,  you can claim a benefit as high as 50 percent of your partner’s benefit if your partner is claiming benefits. You can claim the benefit before your full retirement age, but it will be lower because you are claiming before your full retirement age.

    Usually, you must file for your own benefit and your spousal benefit at the same time. Social Security will pay you your own benefit and your spousal benefit as well, but only if your personal benefit is less than half of your spouse’s benefit.

    If you were born before 1954, you can file for a “restricted claim.” You would then get only your spousal benefit and you could continue to accrue retirement credits on your account until age 70.

    You also get a survivor benefit if a spouse dies so long as you were married for at least nine months before your spouse died. This benefit is usually 100 percent of your former spouse’s benefit.

    If you are divorced but had been married for at least 10 years and are now single, you can get a spousal or survivor benefit from your ex-spouse. If you get married again, you lose these benefits. You cannot get spousal or survivor’s benefits from your new partner unless you have been married a minimum of one year.

    Spousal benefits apply to same-sex married couples.

    Question 3. Will I get benefits for the rest of my life and will they be taxed?

    Once you claim Social Security benefits, you will get them for the rest of your life, and they will be adjusted up a bit for inflation. They may be taxed if your gross income, nontaxable interest income and half your Social Security benefit are greater than $25,000 for an individual or $32,000 for a couple filing jointly.

    If you file a federal income tax return as an individual and your combined income is above $34,000, as much as 85 percent of your benefits may be taxable. If your income is between $25,000 and $34,000, you may need to pay income tax on as much as 50 percent of your benefits.

    If you file a federal income tax return as a married couple and your combined income is above $44,000, as much as 85 percent of your benefits may be taxable. If your combined income is between $32,000 and $44,000, you may have to pay income tax on as much as 50 percent of your benefits.

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  • The fight to strengthen Social Security is about intergenerational justice

    The fight to strengthen Social Security is about intergenerational justice

    The latest Social Security Trustees’ annual report shows that Social Security has an accumulated surplus of about $2.9 trillion and can pay benefits in full for the next 16 years. After that, even if Congress does nothing to protect it, Social Security will be able to pay 80 percent of benefits. Older adults overwhelmingly support Social Security. It is an American success story, a highly effective anti-poverty program that improves the lives of all Americans. What not everyone realizes is that the fight to strengthen it is about intergenerational justice.

    Democrats in Congress are proposing to strengthen Social Security so that it can pay full benefits for the next 75 years or more. Congressman John Larson’s Social Security 2100 Act would raise minimum Social Security benefits and adjust the formula for calculating cost-of-living adjustments so that benefits increase for everyone. It already has more than 200 co-sponsors.

    Strengthening Social Security is easily affordable. Larson proposes a 2.4 percent payroll tax increase phased in slowly over several decades and also requires everyone with incomes over $400,000 to pay into Social Security up to the current cap and then on income above $400,000.

    Before the 2020 election, we must broaden public support for Social Security by engaging younger generations who benefit directly and indirectly from Social Security in ways they may not yet grasp.

    To win, millennials need to understand the value of Social Security to themselves, not simply that it makes their parents and grandparents more economically secure. As a result of stagnating wages, millennials, unfortunately, are the first generation to earn less than their parents. And there are other economic reasons that two in three millennials have no retirement savings. Wages have stagnated. Student debt is huge because college and graduate school education is so expensive. Thus, Social Security will protect millennials down the road, when their savings are likely to be less than those of their parents. Additionally, millennials will likely live longer and therefore have even greater dependence on Social Security.

    Republicans are wrong. Younger Americans may benefit now from Social Security’s disability insurance and survivor benefits for families, but they will all definitely benefit when they reach retirement age. Americans of all ages have a stake in strengthening Social Security. If we all work together, we can ensure Social Security’s long-term political and financial viability.

    Note: A longer version of this article can be found here.

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  • Mainstream media misleads public on Social Security

    Mainstream media misleads public on Social Security

    Social Security is in strong financial shape. But, you wouldn’t know it if you’re reading AP or watching CNN or CBS. Having bought into a billionare-funded campaign to undermine Social Security, the mainstream media unintentionally is misleading the public about this vital program.

    The Social Security Board of Trustees’ annual report was just released. It shows that Social Security now has an accumulated surplus of about $2.9 trillion. By the year 2100, it will represent just 6.07 of GDP. As compared with other wealthy countries, these retirement, disability, and survivor benefits represent a far lower percent of GDP.

    Social Security has funding today to pay out benefits in full for the next 16 years. After that, it is still 93 percent funded for the next 25 years and 87 percent funded for the next 50 years. The shortfall is modest. Congress could, if it chose, easily restore Social Security to long-range balance and, importantly, expand funding.

    The good news is that Congressional Democrats are working on just that. Congressman John Larson has introduced the Social Security 2100 Act, which now has 203 cosponsors.

    And, there are other Democratic bills in the House and Senate. Moreover, every Democratic presidential candidate now in Congress is a member of the Expand Social Security Caucus.

    Congressional Republicans have no plan other than to cut Social Security benefits. No Republican has cosponsored the Social Security 2100 Act or any other bill to expand Social Security. No current Republican politician has even introduced a bill to restore Social Security to long-range balance.

    Congressional Republicans are not listening to their constituents. Like Medicare, Social Security enjoys tremendous bi-partisan support. Americans across the ideological spectrum, including conservatives, are united in opposing cuts to Social Security and supporting its expansion. Nearly seven in ten (68 percent of) Republican voters say they do not want Congress to cut Social Security, according to multiple polls.

    Social Security is a solution. Expanding it would help to address our looming retirement income crisis. It provides needed economic security to virtually all working families, replacing wages when workers retire, become too disabled to work, or die, leaving dependents. How can we afford not to expand Social Security?

    What can you do? Help stop Republican politicians from blocking Social Security expansion. In 2020, vote for candidates who support expanding Social Security. In the meantime, let Congress know that you support expanding Social Security, please sign this petition.

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