The NEW Social Security 2100 Act EXPLAINED | Benefits Extended!

We will be discussing a brand new bill that was recently re-introduced and aims to reform Social Security benefits. This bill, known as the Social Security 2100 Act, is being brought forward by Democratic Representative John Larson from Connecticut, chairman of the House Ways and Means subcommittee on Social Security. Democratic Senator Alexandria Ocasio-Cortez from New York and House Ways and Means Committee Chairman Richard Neal from Massachusetts appeared with Larson on Tuesday to announce the reintroduction of the bill. Neal urged lawmakers to offset the concentration of wealth, which has become more prevalent in the U.S., by embracing this Social Security proposal and extending the expanded child tax credit. According to Larson, “We have this rare moment to accomplish seismic achievements, and this is the time to do it”.

The new version of the bill, called Social Security 2100: A Sacred Trust, follows the Social Security Administration’s latest estimates that the trust funds that support the program will be depleted in just 13 years. At that time, in 2034, only 78% of promised benefits will be payable. The bill proposes extending that date to 2038 in order to give Congress more time to come up with a long-term solution to the program’s solvency issues. The measure would also incorporate proposals made by President Joe Biden during his presidential campaign. This new bill combines Biden’s proposals with House Ways and Means initiatives to expand and enhance Social Security benefits. Like Biden’s plan, the Social Security 2100 Act would set a higher minimum benefit for low-income workers. Benefits would be set at 125% above the poverty line and tied to current wage levels. There’s also a benefit boost for both new and existing beneficiaries amounting to about 2% of the average benefit. Annual cost-of-living adjustments would be tied to the Consumer Price Index for the Elderly, or CPI-E. The argument is that this experimental index may better reflect the costs seniors face. Biden also included this change in his Social Security proposals.

Notably, the Social Security 2100 Act proposed in 2019 had more than 200 co-sponsors, though all were Democrats. On Tuesday, lawmakers indicated that the new version of the bill has already drawn a similar level of support. Ocasio-Cortez spoke about how Social Security benefits helped her family when her father died unexpectedly of cancer. The plan also integrates a couple of elements that might help draw support from across the aisle. The new version would repeal rules that reduce Social Security benefits for public workers and their spouses, widows or widowers who also have pension income. These are known as the Windfall Elimination Provision and Government Pension Offset. This issue came up at a recent House hearing on Social Security and has bipartisan support. The elimination of one proposal — a higher payroll tax rate — may also help draw more support.

The Social Security 2100 Act had previously called for gradually increasing contributions to the program for workers and employers to 7.4%, up from the current rate of 6.2%, over roughly 20 years. However, the legislation does call for increasing Social Security taxes paid by higher-wage earners. In 2021, those taxes are capped at $142,800 in wages, and in 2022 that will rise to $147,000. This proposal reapplies taxes on wages at $400,000 and up, which is also in line with what Biden has proposed. At the same time, the bill would also raise the thresholds above which income including Social Security is taxed. The plan calls for changing that to $35,000 for individuals and $50,000 for couples, up from $25,000 and $32,000, respectively. The bill would also prevent the reduction of benefits for certain beneficiaries if the National Average Wage Index declines due to unforeseen circumstances, such as events impacting the economy. It would also require the Social Security Administration to mail paper statements to all workers ages 25 and up, unless they request electronic delivery.

Other changes in the bill include extending benefits for students up through age 25, increasing certain widows’ and widowers’ benefits, boosting beneficiaries’ benefits after 15 years, eliminating a five-month waiting period to receive disability benefits, and creating caregiver credits so that the retirement benefits of those who take time out of the workforce are not reduced. So the fact that Social Security reform is finally being considered in Congress is great news for a lot of concerned beneficiaries who are relying on Social Security for a majority of their income.

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