New Legislation Aimed At Fixing Social Security and Medicare
By Shannon Benton, Executive Director
Senator Mitt Romney (UT) recently led a bipartisan Senate group in introducing legislation aimed at fixing Social Security and Medicare’s funding shortfalls. If nothing changes, the programs’ trust funds are expected to become insolvent in 15 years. If that should occur, benefits would be reduced by about 22 percent in order to match the amount of payroll taxes coming in.
Romney’s bill would not tackle changes to the programs directly but would require Congress to set up “rescue” committees. The committees would be tasked with evaluating proposals and writing legislation to extend the solvency of the Trust Funds— which include the Social Security retirement, survivors, and disability trust funds and Medicare hospital insurance. At least two members of each party would be required to work on the legislation, and any qualifying bills that are written, would get expedited consideration in both the House and the Senate.
While TSCL strongly agrees that the time has come for Congress to take action on Social Security and Medicare, we question whether rescue committees would work as desired. Over the past 25 years there have been numerous committees and commissions that developed (often) contentious plans to change Social Security and Medicare. None have been successful in getting their plans adopted as major legislation.
Rescue committees may not even be needed for Social Security. The House is working on The Social Security 2100 Act (H.R. 860) introduced by Representative John Larson (CT-1), and has the support of 208 co-sponsors. The bill would provide;
- a modest boost in benefits,
- a more generous cost-of-living adjustment (COLA) by calculating the annual boost using the Consumer Price Index for the Elderly (CPI-E),
- and would reduce the tax on Social Security benefits for older taxpayers with incomes below $50,000, (single filers) and $100,000 (filing jointly).
To do this, Larson’s bill would increase the payroll tax rate gradually over 24 years through annual 0.1% increases, and it would also apply payroll taxes to all earnings instead of just the first $137,700.
Our annual Senior Surveys indicate overwhelming public support for the major provisions of The Social Security 2100 Act. And based on your comments and email, that’s pretty much the case, no matter which political party you happen to vote for. It’s vital for all of us to make sure your Member of Congress knows how you think Social Security and Medicare should be “rescued.” Please take our 2020 Senior Survey.
