Last week TSCL was contacted by the office of Rep. Al Lawson (D-Fla.), to ask if we would once again endorse his bill, the Social Security for Future Generations Act. The Congressman first introduced his bill in 2019 but because it did not pass at that time he has now reintroduced it.
This legislation would make targeted benefits increases to students and widow(ers), update the cost-of-living adjustments formula (COLAs) to all beneficiaries, and will close a tax loophole that allows the wealthiest Americans to pay a lower Social Security tax rate.
It includes the following provisions:
- Extension of Student Benefit to Age 22: Social Security provides benefits directly to about 3 million dependents under age 18 who have lost parental support because of death, disability, or retirement. Originally, this benefit was extended to dependents up to age 22, but that ceased after April 1985. This provision will reinstate benefits for dependents enrolled in college, up to age 22 so that they can afford skyrocketing tuition and college costs.
- Updated Benefit Formula for Widow and Widowers: Under the current benefit formula, Social Security benefits at widow(er)hood will be one-third to one-half less than the combined benefits to the couple. This provision would ensure that benefits are directed toward a vulnerable group of women (and men), so that they receive a minimum amount of Social Security retirement in the case of spousal death.
- COLA Adjustment: CPI-E is a more accurate measure of spending that is produced by the Department of Labor. This measure is projected to increase the annual COLA benefit by ~0.2 percentage points, on average. An average senior at the age of 80 could see a $43 a month increase, while the average senior at age 90 could see a $73 a month increase in benefits.
- Apply Payroll Tax to Wages above $250K: Currently, there is a maximum amount of earnings ($127,200 in 2017) that can be taxed; any earnings above this taxable maximum are not subject to the payroll tax. According to the Center for Economic Policy Research, subjecting all income over $250,000 to the Social Security payroll tax would impact only an estimated top 1.5 percent of wage earners.
- Special Minimum Benefit: This is alternative benefit formula increases benefits paid to workers who had low earnings and who have worked long enough to secure Social Security retirement. This provision will ensure low-income workers qualify for benefits.
TSCL has once again endorsed this important legislation and we are grateful to the Congressman for his authorship of the bill.