The first meaningful reforms of Social Security since 1983 would increase benefits, reduce taxes for millions of Social Security beneficiaries, set new minimum benefit levels to protect low-income workers, and make the wealthy pay into the program at the same rate as everyone else.
The proposal would also gradually increase payroll taxes so that by 2043 workers and employers would each pay 7.4 percent instead of the current 6.2 percent.
U.S. Rep. Steven Horsford outlined what Democrats call the Social Security 2100 Act at a forum Tuesday afternoon at the Doolittle Senior Center. He was accompanied by fellow Democratic Rep. John Larson, chairman of a House Ways and Means subcommittee on Social Security and the primary sponsor of the legislation. The bill is co-sponsored by more than 200 House Democrats.
The conversation comes as recent reports that Social Security is solvent through 2035. “After that, benefits drop to 80 percent,” said Horsford, who serves with Larson on Ways and Means. “We can’t have that.”
Nearly 640,000 Nevadans receive Social Security benefits.
Social Security isn’t an “entitlement,” as it’s often called, Horsford said. “These are not government giveaways … This is something you’ve earned and deserve.”
The Social Security 2100 Act is designed to make Social Security solvent through the end of the century by the payroll tax increases, but also by lifting the cap on taxable earnings. Currently, employees and employers split payroll taxes on earnings up to $132,900. The Democratic proposal would also establish Social Security taxes on wages above $400,000.
Benefits for everyone would be increased by about 2 percent. Benefits for low-income workers would also be increased by establishing a minimum benefit at 25 percent above the poverty level.
The proposal provides a tax break to Social Security recipients. Currently Social Security benefits are taxes if a beneficiary’s other income exceeds $25,000, or $32,000 for couples. The Democratic legislation would increase those thresholds to $50,000 and $100,000.
The legislation would also modify Cost-of-Living Adjustments (COLA) to take into account other costs, such as increased rent prices or utilities. “There should be a COLA that actually reflects the costs you incur,” Larson said.
“So many Americans contribute to Social Security all their lives, yet so many of them retire into poverty,” Larson said. “Most of them are women and the majority are women of color.”
The topic was especially important to Horsford because of his family. He told the audience that when he was nine weeks old, his grandmother had a stroke that put her in a coma for six months and left her paralyzed on the left side.
“Here my mother is, still a teenager, alone in the United States taking care of a sick mother and a baby,” he said. “My grandmother needed round the clock care and was put into a nursing home to get the care she needed. Social Security Disability and Medicaid made that possible.”
The Social Security 2100 Act would also combine the Disability Insurance trust fund and the much larger Old Age and Survivors trust fund into a single fund to assure the solvency of both.
“There is a huge need to educate people about the benefits they are entitled to and to help them actually get those benefits,” Horsford said, referring to disability benefits. “Even if they know and apply, sometimes they might get the run around.”
Trump’s budget proposes cutting $25 billion in Social Security Disability benefits.
Horsford and Larson were also asked about prescription drug prices and Medicare for All. Horsford didn’t answer directly if he supports Medicare for All, instead saying he was willing to look at any proposal that would help achieve universal health care.
While President Trump wasn’t brought up much at the event, Horsford was asked if the president’s proposed budget would affect seniors. Horsford said it would hurt them.
“His budget proposal would drastically cut programs that benefits America’s oldest and most vulnerable citizens,” he said. “His plan calls for deep reductions to Social Security. His budget is dead on arrival. We’re not passing his budget.”