How Social Security Can Be Fixed Without Deep Cuts
By Jessie Gibbons, Senior Policy Analyst
The chances are high that the next president of the United States will sign into law legislation that reforms the Social Security program and extends the solvency of the trust fund beyond 2034, its projected year of exhaustion. For years leaders in Washington have been authoring sweeping plans that would enact major benefit cuts like reduced cost-of-living adjustments (COLAs) or increased eligibility ages in order to strengthen the financing of the program. But the unpopularity of those plans with voters ensured those plans never went anywhere.
The Senior Citizens League (TSCL) understands that Social Security beneficiaries today cannot afford any cuts to their benefits. Since 2000 alone, their benefits have lost 23% of their purchasing power. Instead, to improve the financing of the Social Security trust fund, TSCL is urging lawmakers to strengthen the program responsibly without benefit cuts.
Here’s how one TSCL-backed proposal – the Social Security 2100 Act (S. 1904, H.R. 1391) – would restore the program’s solvency through the next century while strengthening benefits for older Americans.
The Social Security 2100 Act would make Social Security benefits more generous by:
- Boosting benefits across-the-board by approximately 2% for all Social Security recipients;
- Creating a new minimum benefit for low-income retirees set at 25% above the poverty line (the current minimum is as low as $39.90 per month and requires eleven years of work);
- Adopting a more accurate and adequate COLA that protects seniors against inflation;
- Providing relief for more than 11 million middle-class beneficiaries who pay income taxes on their Social Security benefits each year.
The Social Security 2100 Act would strengthen the program’s financing by:
- Phasing in an increase in the payroll tax rate for workers and employers from 6.2% to 7.4% each over a period of twenty years. The gradual growth would mean an extra 50 cents in taxes per week each year for the average worker.
- Applying the payroll tax to all wages over $400,000. Currently, payroll taxes are not paid on income over $118,500, which means millionaires and billionaires pay a much smaller tax rate than everyone else.
Upon introducing the bill back in 2015, Congressman John Larson (CT-1) said: “Social Security remains the nation’s bedrock retirement program and provides vital protection … Many Americans, however, do not believe it will be there for them when they retire. I am proud to announce a common sense path forward today that not only strengthens benefits now, but ensures Social Security will be here through the next century.”
TSCL supports the Social Security 2100 Act enthusiastically since it would reform the program responsibly, without any cuts for beneficiaries. Our legislative team will continue to advocate for it in the months ahead, and we hope to see it signed into law before the end of the 114th Congress. For updates on the progress of the Social Security 2100 Act, visit our Legislative News updates regularly or follow us on Facebook or Twitter (@Seniors_League).