A plan that would increase Social Security benefits and strengthen the program’s finances primarily through taxing companies and the rich was proposed on Monday by progressive Democrats and Sen. Bernie Sanders (I-VT).
Sanders has sponsored similar legislation before, most recently in 2022; nevertheless, the timing of the unveiling of this latest version of the measure is particularly apt given the ongoing national dialogue between President Joe Biden and legislative Republicans on the topic of Social Security.
Deliberation on Social Security Benefits
Democrats have accused Republicans of trying to use debt ceiling negotiations to force cuts to the popular program by seizing on ideas like Florida Senator Rick Scott’s proposal to require Congress to renew all federal programs every five years and a House GOP proposal to raise the program’s eligibility age.
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Last week during the State of the Union, Vice President Joe Biden appeared willing to accept the concession, but the GOP has adamantly denied that it would bring up Social Security in discussions about extending the debt ceiling.
Sanders’s bill contributes to the leftward drift of the current Social Security debate by pressing Republicans to accept the possibility of enhanced benefits and big tax hikes.
Social Security Expansion Act proposed by Sanders (I-Vt.) and Warren (D-Mass.) in the Senate and Jan Schakowsky (D-Ill.) and Val Hoyle (D-Ore.) in the House would increase yearly benefits for retirees by $2,400 and ensure the program’s full funding through 2096.
Sanders requested an examination of how the plan would affect Social Security taxes and learned that the law would accomplish this goal by increasing the maximum amount of income subject to payroll taxes.
For the vast majority of American families (93%) with annual incomes of $250,000 or less, this move would not result in higher taxes.
Due to the payroll tax not being deducted on incomes exceeding $160,200 per year, millionaires will stop contributing to Social Security as of the 30th of this month.
Congressional Representative Jan Schakowsky Warns of Price Hikes
Proposed changes in the law would increase this cap and apply the Social Security payroll tax to all income in excess of $250,000, thereby eliminating the cap.
If the legislation had been implemented in 2021, the 11 highest-paid CEOs in the country, including Elon Musk, CEO of Tesla and Twitter, who would have given $2.9 billion, would have donated a total of over $3.4 billion to the fund.
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Instead of trying to safeguard Social Security, Schakowsky sounded the alarm, stating that her Republican colleagues are conspiring to decrease benefits and raise the retirement age.
Social Security has a $2.85 trillion surplus in its trust fund, according to the most recent annual report from the program’s trustees, which means it can pay 100% of promised benefits through 2035, 90% for the next 25 years, and 80% for the following 75 years, despite the claims of Republican lawmakers who are clamoring to cut benefits and delay eligibility.
