A new bill introduced by Sen. Bernie Sanders (I-Vermont) would increase Social Security payments annually by “scrapping the cap” on the amount that the wealthiest Americans pay into the program.
The bill would increase Social Security payments by $2,400 a year and would fully fund the program until 2096, or the next 75 years — far past the current estimated insolvency date of roughly 2033, thanks to Republican refusal to raise taxes to fund the program.
The bill would eliminate the income cap on Social Security taxes in order to ensure that people with high incomes contribute the same portion of their incomes to the program as the rest of the country; currently, the income cap for Social Security payments is $147,000, meaning that people making $1 million in income a year stop paying into Social Security by the end of February.
As a result, while those with an income lower than $147,000 are paying 12.4 percent of their incomes into the program each year, the wealthy pay a far smaller proportion of their incomes in Social Security taxes. This income cap, Sanders said, is “absur[d]” and “grossly unfai[r].”
Sanders introduced the Social Security Expansion Act alongside fellow Expand Social Security Caucus co-chair Sen. Elizabeth Warren (D-Massachusetts) and seven other Democratic senators, as well as Rep. Peter DeFazio (D-Oregon) in the House. The bill also has the support of 50 organizations, including major labor unions like the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
In a Budget Committee hearing on the program on Thursday, Sanders said that Social Security is something that Americans often take for granted — which makes fully funding the program to ensure that younger generations can enjoy its benefits in several decades all the more critical. At the same time, Sanders pointed out, the current program payments are too small for some seniors to live on, meaning that many seniors are putting off or giving up retirement in order to survive.
Despite the “important success” of the program that has drastically reduced the number of seniors living in poverty in the U.S., Sanders said, “tens of millions of senior citizens are still struggling today to make ends meet and many older workers are scared to death — literally frightened to death — that they will never be able to retire with any shred of dignity.”
The senator cited data showing that 12 percent of seniors are struggling to live off of incomes of less than $10,000 a year, while 55 percent are living off of incomes of less than $25,000 a year. At the same time, half of Americans 55 and older have no retirement savings, meaning that many rely largely on Social Security payments in order to survive — payments of, on average, about $1,500 a month.
“Our job, in my view, is not to cut Social Security, is not to raise the retirement age, as many of my Republican colleagues would have us do,” Sanders said. “Our job is to expand Social Security so that everyone in America can retire with the dignity that he or she deserves and that every person in this country with a disability can retire with the security they need.”
Sanders emphasized that the bill is also about leveling the playing field. “At a time of massive income and wealth inequality, at a time when billionaires pay an effective tax rate lower than the average working person, at a time when the very richest people in this country are becoming much richer,” he said, “this legislation demands that the wealthiest people in this country start paying their fair share of taxes.”
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