We live in a country and during a time where and when the seniors among us struggle to live off of Social Security and Medicare.
That could be about to change as U.S. Rep. John Larson seeks to reform the Social Security system.
Larson’s Social Security 2100 Act proposes to increase benefits to current and future recipients and combine the Old Age, Survivors and Disability Insurance benefits into one Social Security Trust Fund.
Larson, chairman of the Ways and Means Social Security Subcommittee, is optimistic his plan will be signed into law this year. Larson, who has served on Congress the last 20 years, introduced the bill with Social Security Works President Nancy Altman, U.S. Reps. Jahana Hayes and Conor Lamb and Max Richtman, president of the National Committee to Preserve Social Security and Medicare. It was presented on the birthday of President Franklin Delano Roosevelt, who started the program in 1935. It hasn’t been updated since 1983.
The Ways and Means Committee’s Social Security sub-committee is expected to gather for a hearing sometime this month. The bill currently has more than 200 congressional co-sponsors.
“It needs to be expanded and upgraded actuarially,” Larson said. “They did not index it to deal with inflation and other factors. In 2008 when the market plummeted you saw your 401(k) turn into a 101(k). We propose to make Social Security sufficiently solvent beyond 75 years. This is a common sense proposal that’s pay-as-you-go, with a direct benefit to the individual, that won’t add to the national debt.”
On a paycheck, the Social Security deduction is shown as “FICA” which stands for Federal Insurance Contributions Act.
Currently, workers do not contribute to the program on wages exceeding $132,900. The 2100 Act would raise that limit to $400,000. This would only affect the top half of 1 percent of wage earners in America.
Social Security recipients whose individual income outside of the program is less than $50,000 (or less than $100,000 along with their spouse) would not be taxed on their benefit. This would lower taxes for 12 million seniors, including those earning more than the current $25,000 and $32,000 thresholds.
Additionally, the plan alters the Cost Of Living Adjustment (COLA) formula to better serve those who spend a large portion of money on healthcare and other necessities. The minimum benefit would rise as well.
During his presentations on the bill Larson is known for using a Starbucks latte to demonstrate the cost of his proposal to wealthy families.
“It costs more to buy one of these on a weekly basis than it does to fix Social Security,” he says.
He’s brought the proposal to senior centers across Connecticut, where it’s been generally well-received.
“Close to five million Americans on Social Security retire into poverty,” Larson pointed out. “Primarily women, because they were raising families and making 75 cents to their male counterparts. We’ll require the government to set the minimum benefit at 25 percent above the poverty level so there’s a two percent increase across the board for all recipients.”
According to the bill’s proponents, SS has built up $2.8 trillion in reserves and is fully solvent until 2034. If no changes are made to the current system, however, benefits are scheduled to drop by 25 percent in 2034.
Larson is hopeful that President Donald Trump will support the proposal, which has been certified by Social Security’s chief actuary.
“He’s also said that Social Security is not an entitlement, it’s a benefit,” he explained. “We think there is a real opportunity here to work with him on it.”