What You Need to Know
- The bill would only delay benefit cuts by four years.
- While most of the bill's provisions only last five years, the payroll tax expansion would be permanent.
- Congress should focus on paying the benefits it's already promised before expanding benefits, a former SSA official says.
The new bill put forward by Rep. John B. Larson, D-Conn. — called Social Security 2100: A Sacred Trust — aims to begin addressing the program’s impending funding crisis. The legislation, an updated version of the Social Security 2100 Act, increases funding by raising taxes on high earners to pay for a temporary expansion of the current system.
The bill only delays benefit cuts for four years, from 2034 to 2038. While it’s an opening salvo in the Social Security funding debate, it doesn’t solve the trust funds’ long-term solvency problem.
What’s in the New Social Security 2100 Bill?
Some of the proposed changes appear to be aimed at building public support, including a 2% increase in real benefits (above the 5.9% cost-of-living adjustment in 2022) and a minimum benefit set 25% above the poverty line for Social Security beneficiaries who have worked at least 30 years.
Additional proposed benefit changes include expanding benefits for public-sector workers and increasing benefits for surviving spouses and dependents.
What Your Peers Are Reading
Proposed changes include substituting the Consumer Price Index for the Elderly, developed to capture costs paid by older consumers, for the Consumer Price Index for Urban Wage Earners and Clerical Workers when calculating annual COLAs. The CPI-E has recently outpaced the CPI-W by about 0.2% per year, according the American Enterprise Institute.
Other changes increase the minimum benefit to 25% above the poverty line, which will mainly increase income for workers who did not consistently participate in the labor market.
Widows and widowers would receive a minimum of 75% of the combined Social Security benefits of both spouses. This would increase benefits for dual-income couples, particularly those with more equal earnings histories.
If each spouse earned $1,000, they would receive a 50% increase in benefits (75% of the $2,000 combined benefit) under the proposal. The bill would also increase benefits for public-sector workers who may have contributed to Social Security for a limited number of years.