New Congressional Bill On Social Security Doesn’t Address The Funding Shortfallby Richard Kuehn on 10/26/21
A House bill sponsored by Democrats called Social Security 2100 : A Sacred Trust does much to help seniors, boosting benefits in a number of areas. Introduced by Rep. John Carson, D-Conn. who serves on the House Ways and Means Social Security Subcommittee is a bit perplexing as it is adding to a looming deficit and does nothing to address how our nation will pay for it. Some key issues in the bill:
Benefits would be set at 125% above the poverty line and tied to current wage levels;
Both new and existing beneficiaries would get a 2% increase in their benefit, on average;
The bill would repeal rules that reduce Social Security benefits for workers and their spouses, widows or widowers who also have pension income (called the Windfall Elimination Provision and Government Pension Offset); and
Annual cost-of-living adjustments would be tied to the Consumer Price Index for the Elderly, or CPI-E.
The latest estimates from the government are that by 2034, Social Security benefits will drop to 78% of what has been promised, and this new bill extends that date to 2038 to give Congress more time to come up with a long-term solution to the program’s solvency issues. There is a provision for an increase in the wages cap where workers have to pay Social Security Tax (up from $147,000 to $400,000). However, this will likely be offset from a provision in the bill which would only require Social Security recipients to pay taxes on earnings above $35,000 ($50,000 for couples), up significantly from $25K and $32K respectively. This seems to me like Congress just kicking the can down the road—why not try and solve this issue now?