The Social Security Administration recently announced that due to this year’s high levels of inflation, it would be raising social security payments by 5.9% in 2022, the highest increase in nearly 40 years. And a new bill introduced in Congress could increase those payments even further.
While on the campaign trail, President Joe Biden promised to look at the social security program, which is currently set to run out of money by 2034, according to Rep. John Larson, D-Conn., who introduced the new bill. This lack of funds would result in a 20% drop in benefits. Among some of the points in Biden's proposal was the suggestion to make payments that are at least 125% of the national poverty level to retirees.
Biden also campaigned on raising the Social Security income tax threshold to a maximum of $400,000, which would generate an additional $700 billion in revenue over ten years, according to Forbes. If passed, Larson's bill could do just that.
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Social Security 2100 introduced in Ways and Means Committee
House Ways and Means Social Security Subcommittee Chairman John Larson, D-Conn., introduced Social Security 2100: A Sacred Trust in the committee Tuesday. The bill is intended to expand social security benefits and prevent the program from running out of funds. It would also increase payments by about 2% for the average beneficiary.
The legislation currently has nearly 200 cosponsors and has been endorsed by more than 100 advocacy groups, according to Larson.
"Social Security 2100: A Sacred Trust will expand benefits and strengthen Social Security," Larson said in a statement. "The pandemic has only underscored what we already knew and has exacerbated systemic inequities – current benefits are not enough. Five million seniors are living in poverty due to longstanding discrimination in the labor force that affects mostly people of color and women.
"These are our sisters, brothers, aunts, uncles and neighbors," he continued. "For too long, Congress has forsaken its duty to enhance benefits. With 10,000 Baby Boomers a day becoming eligible, and with Millennials needing Social Security more than any generation, the time for Congress to act is now."
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What changes would the new social security bill bring?
Larson's bill pushes the date that benefits would expire to 2038 in order to give Congress more time to find a long-term solution for the impending retirement crisis. In the meantime, it would also increase minimum benefits and raise the income threshold to payroll taxes to $400,000, up from the current threshold of $142,800.
Here are a few of the other changes the new bill would bring, if passed into law:
- Increases the average benefit for all social security recipients by about 2%
- Improves the annual cost-of-living adjustment (COLA) formula to more adequately deal with inflation increases as measured by the Consumer Price Index (CPI)
- Sets minimum payments at 25% above the national poverty line
- Improves benefits for widows and widowers in a two income household
- Repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO)
- Ends the five-month waiting period for disability insurance benefits
- Provides caregiver credits for time spent out of the workforce
- Extends benefits for eligible students through age 22
- Increases access to benefits for children who live with grandparents or other relatives
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