We live in a country and during a time where and when the elders among us struggle to live off of Social Security and Medicare.
That’s all on the cusp of changing, as local legislators seek to reform the SS system.
The Social Security 2100 Act increases benefits to current and future recipients and combines the Old Age, Survivors and Disability Insurance benefits into one Social Security Trust Fund.
Ways and Means Social Security Subcommittee Chairman and Congressman John Larson is optimistic that his plan will be signed into law this year. Larson, who has served on Congress the last 20 years, introduced the bill with Social Security Works President Nancy Altman, State Reps. Jahana Hayes and Conor Lamb and Max Richtman, president of the National Committee to Preserve Social Security and Medicare. It was presented on the birthday of President Franklin Delano Roosevelt, who started the program in 1935. It hasn’t been updated since 1983.
The Ways and Means Committee’s Social Security sub-committee is expected to gather for a hearing sometime this month. The bill currently has more than 200 congressional co-sponsors.
“It needs to be expanded and upgraded actuarially,” Larson said. “They did not index it to deal with inflation and other factors. In 2008 when the market plummeted you saw your 401K turn into a 101K. We propose to make Social Security sufficiently solvent beyond 75 years. This is a common sense proposal that’s pay-as-you-go, with a direct benefit to the individual, that won’t add to the national debt.”
On a paycheck, the SS deduction is shown as “FICA” which stands for Federal Insurance Contributions Act. Currently, workers who earn an annual salary over $132,900 do not contribute to the program. The 2100 Act would require anyone earning less than $400,000 to contribute. This would only affect the top half of one percent of wage earners in America.
SS recipients whose individual income outside of the program is less than $50,000 (or less than $100,000 along with their spouse) would not be taxed on their benefit. This would lower taxes for 12 million seniors, including those earning more than the current $25,000 and $32,000 thresholds.
Additionally, the plan alters the Cost Of Living Adjustment (COLA) formula to better serve those who spend a large portion of money on healthcare and other necessities. The minimum benefit would rise as well.
During his presentations on the bill Larson is known for using a Starbucks latte to demonstrate the cost of his proposal to wealthy families.
“It costs more to buy one of these on a weekly basis than it does to fix Social Security,” he says.
He’s brought the proposal to senior centers across Connecticut, where it’s been generally well-received.
“Close to five million Americans on Social Security retire into poverty,” Larson pointed out. “Primarily women, because they were raising families and making 75 cents to their male counterparts. We’ll require the government to set the minimum benefit at 25 percent above the poverty level so there’s a two percent increase across the board for all recipients.”
According to the bill’s proponents, SS has built up $2.8 trillion in reserves and is fully solvent until 2034. If no changes are made to the current system, however, benefits are scheduled to drop by 25 percent in 2034.
Larson is hopeful that President Donald Trump will support the proposal, which has been certified by Social Security’s chief actuary.
“He’s also said that Social Security is not an entitlement, it’s a benefit,” he explained. “We think there is a real opportunity here to work with him on it.”