Lawmakers plan to hold a series of hearings to examine H.R. 1902, The Social Security 2100 Act, to figure out how the bill could prevent the Social Security Trust Fund from going bust by 2034, as projected in the just-released 2018 trustees’ report.
The bill, introduced last April, would increase both benefits and the payroll taxes that fund them and would change the way cost-of-living adjustments are calculated.
When asked whether the bill strengthens the Social Security Trust Fund so that it is financially sound throughout the 75-year projection, Social Security’s chief actuary, Stephen Goss, replied during a hearing held Thursday by the House Ways and Means Social Security Subcommittee that “indeed it does.”
Rep. Bill Pascrell, D-N.J., stated that H.R. 1902 “would raise benefits,” adding that a series of “good hearings down the road” would be held on the legislation. “I can’t support any program that would cut benefits in order to solve the problem.”
Goss agreed that resolving the viability of Social Security hinges on “enacting something to make changes that will be necessary sooner rather than later.”
H.R. 1902 was introduced last April and was referred to the House Ways and Means Social Security Subcommittee.
The Senior Citizens League states that If signed into law, H.R. 1902 would strengthen Social Security benefits by basing COLAs on the Consumer Price Index for the Elderly, increasing monthly benefits by 2%, creating a new Special Minimum Benefit equal to 125% of the poverty line, providing a tax cut to Social Security beneficiaries, applying the payroll tax to annual income over $400,000, and gradually increasing the payroll tax rate by 0.25%.
Goss told the lawmakers Thursday that the 2018 trustees report included “three main changes” from a year ago:
- Based primarily on continuing lower-than-expected disability application and incidence rates through 2017, the projected reserve depletion date for the Disability Insurance Trust Fund is extended once again, by an additional 4 years, from 2028 in last year’s report to 2032 in this report. The DI reserve depletion date is extended in spite of the fact that disability incidence is assumed to rise more rapidly to the same ultimate rate as in last year’s report.
- The projected reserve depletion date for the Old Age and Survivors Insurance Trust Fund is projected to be late in 2034, a few months earlier than the date early in 2035 projected in last year’s report. This change results largely from lower projected revenue to the OASI, DI and Hospital Insurance trust funds in the near term, due to lower-than-expected earnings as a share of GDP for 2016 and 2017, and assuming that a greater share of the low productivity growth over the last decade will be a permanent loss resulting in less economic growth over the remainder of the economic recovery.
- The actuarial status over the long range (75-year) period is similar to last year, with the OASDI actuarial deficit increasing less than expected and annual deficits in later years lower than expected in last year’s report, due largely to higher projected death rates, recent legislation, and improvements in projection methods.