Democrats introduce bill to expand Social Security benefits, payroll tax

House Democrats introduced comprehensive Social Security reform legislation Tuesday that would boost payments and expand the payroll tax that supports the program.

The bill, the Social Security 2001: A Sacred Trust Act, would increase the average benefit for Social Security recipients by about 2%. It also modifies the cost-of-living adjustment formula to better protect against inflation, sets a new minimum benefit at 25% above the poverty line and ends the five-month waiting period for disability benefits, among its 17 enhancements to Social Security.  

The bill would pay for the additional benefits by applying the Social Security payroll tax to wages above $400,000, according to a summary. The levy is currently capped at $142,800; an annual inflation adjustment would gradually push that $142,800 cap up to $400,000, at which point all wages would be subject to the payroll tax. The measure also creates a unified Social Security trust fund by combining the two funds that currently comprise it – one for retirement and survivor benefits and one for disability insurance.

House Ways and Means Committee Democrats rolled out the bill in a Capitol Hill press conference that lasted more than an hour and included statements of support from more than a dozen lawmakers. The bill has nearly 200 original co-sponsors.

Democrats touted the measure with a sense of urgency — not only in terms of the millions of Americans who they said were struggling to get by on Social Security payments below the poverty level but also in terms of a political moment when Democrats control the House, Senate and White House.

“It’s now time to expand benefits [for] everyday, hard-working, decent Americans who work hard and play by the rules and contribute … through the payroll tax to this great program that has never missed a payment and stands as a hallmark to what good government is,” the bill’s author, Rep. John Larson, D-Conn. and chairman of the Ways and Means subcommittee on Social Security, said at the press conference.

Democrats maintain a three-seat majority in the House and the thinnest possible majority in the 50-50 Senate thanks to the tie-breaking vote of Vice President Kamala Harris. But the bill’s backers likely will have trouble obtaining Republican support, and the GOP can block legislation through a Senate filibuster.

But Democrats concentrated on their majorities at the Tuesday press conference.

“We have this rare moment to accomplish seismic achievements,” said Ways and Means Committee Chairman Richard Neal, D-Mass. “This is the time to do it.”

Rep. Bill Pascrell, D-N.J. and a co-sponsor of the bill, said: “With unified control of government, we must get this done for the American people.”

The Social Security Board of Trustees said in its annual report in August that the trust fund would be depleted one year sooner than previously predicted — in 2034 — as a result of the economic fallout from the coronavirus pandemic.

Democrats propose to bolster the trust fund and finance increased benefits by turning to a prominent theme of their agenda — increasing taxes on high-earners.

“The bill pays for these commonsense enhancements by asking the wealthy making over $400,000, who have been exempt, to pay their fair share,” Larson said.

The post Democrats introduce bill to expand Social Security benefits, payroll tax appeared first on InvestmentNews.

Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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