What You Need to Know
- Larson is currently seeking co-sponsors in the House for his revised bill, which he may introduce in September.
- The bill would pay for enhancements to Social Security by extending the payroll tax to earnings over $400,000.
- Larson's announcement followed the release of the Social Security Trustees Report, which says the old-age fund is on track to go bust by 2033.
Rep. John Larson, D-Conn., chairman of the House Ways and Means Social Security Subcommittee, plans to introduce this fall — likely later this month — a revised bill, called Social Security 2100: A Sacred Trust, to increase benefits and extend the program’s solvency.
The bill would impose the payroll tax on wages over $400,000 a year. Full details are not yet available, but the bill also “increases benefits across the board” and is expected to change the way cost-of-living adjustments (COLAs) are calculated, according to the National Committee to Preserve Social Security & Medicare.
Walter Gottlieb, of the National Committee to Preserve Social Security & Medicare, told ThinkAdvisor Wednesday in an email that Larson’s original Social Security 2100 Act “included a 2% benefit boost for all beneficiaries. We would expect a similar provision in Sacred Trust but the details of that are not public yet.”
In commenting on the release Tuesday of the 2021 Social Security Trustees Report, Larson said that Social Security is expected to pay a COLA at the end of this year “that is significantly higher than in recent years, largely because of the pandemic.
“While it’s welcome, it is not a benefit increase,” Larson said. “It reflects inflation and keeps purchasing power steady for Social Security beneficiaries. It will be absorbed by Medicare premiums and the increase in costs for food, housing and prescription drugs.”
That’s why Larson says he’s working with President Joe Biden to pass Social Security 2100: A Sacred Trust.
“The Trustees Report confirms that Social Security’s financing is strong in the near term yet underscores why it is so important that Congress take action now to prevent 22% in cuts across the board on all benefits in 2034,” Larson said. “With the loss of traditional pensions, rising health care costs, and many people unable to save enough for retirement, there is a growing retirement crisis — 65 million Americans currently rely on Social Security benefits, yet millions are suffering and can’t make ends meet.”
The Trustees Report says that the trust fund that pays benefits to retirees is on track to go bust by 2033.
The report also shows “that this year the cost of paying out benefits will exceed the income from the Federal Insurance Contribution Act (FICA) payments,” Larson said.