Why don’t Democrats expand Social Security?

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Members of the House Ways and Means Social Security subcommittee watch Rep. Alexandria Ocasio-Cortez, DN.Y., speak about legislation that would strengthen Social Security benefits, in Washington, DC, October 26, 2021.

Photo: Drew Angerer/Getty Images

Democratic Rep. John Larson of Connecticut drafted a bill titled “Social Security 2100: A Sacred Trust” that would immediately expand program benefits to all 65 million beneficiaries. It has at least 200 co-sponsors, all Democrats, in the House. And increasing Social Security payments should be an easy lift for Democrats, especially in an election year.

Yet the bill still awaits a vote in the Social Security subcommittee — chaired by Larson — of the House Ways and Means Committee, let alone a vote on the floor. Why?

Part of the answer appears to be Wendell Primus, a senior aide to House Speaker Nancy Pelosi, D-Calif. Primus is seen by many in the Washington, D.C., world of progressive politics as embodying a mindset of the Democratic Party’s past, when all that seemed possible was to stave off cuts to important social programs, rather than to be offended.

Primus “cares passionately about children, he’s always been about making sure we take care of children,” Larson said during a recent appearance on The Intercept’s Deconstructed podcast. “Wendell’s concern would be that there isn’t a lot of money to spend. We have a limited number of expenses. Pelosi’s office did not immediately respond to a request for comment.

But, Larson explained, “My argument is that it takes care of the kids. [Social Security] is the #1 anti-poverty program for children. Although Social Security is best known for its benefits to retirees, it also provides support for children whose parent has died or become disabled and for children who are themselves disabled. Larson is optimistic that his bill will receive a vote before long and in fact thinks it would be so politically popular that it could pass with some GOP support.

According to Larson, Mark Meadows, former chairman of the House Freedom Caucus and later chief of staff to former President Donald Trump, once told him that if his legislation “gets the ground, you’re going to find a lot of Republicans are going to vote for it. [it].”

Social Security 2100 would then face a tougher challenge in the Senate. Under Senate rules, changes cannot be made to Social Security through the reconciliation process, which requires a simple majority. It would therefore be necessary to bring together the votes of all 50 Democratic senators as well as 10 Republicans to put an end to a certain buccaneer.

Another tricky aspect of the bill is that all of its expanded benefits are temporary and will only last for five years. A previous version of Larson’s bill made the increased benefits permanent, paying for them by gradually increasing the payroll tax rate and eliminating the salary limit, currently $147,000, on which taxes are assessed. The new bill would generate far less revenue because it is drafted to honor President Joe Biden’s pledge not to raise taxes on anyone earning less than $400,000 a year.

Larson and other supporters of this version of the bill believe it would be politically difficult for members of Congress to let the new benefits lapse and the matter could then be revisited.

In addition to Larson’s bill co-sponsors, it has also been endorsed by numerous outside organizations, including the NAACP, National Organization for Women, and MoveOn. Still, there has been limited political education on the bill’s specific new benefits, so ordinary citizens may want to educate themselves. Here are the main provisions of Social Security 2100:

  • Social Security payments would immediately increase by $360 a year for the program’s 65 million beneficiaries

Benefits for each Social Security recipient would immediately increase by $30 a month, or $360 a year for individuals or $720 for retired couples. This is especially important because, while it may be reconsidered, Medicare is raising Part B premiums by an unusually large amount for 2022, adding $260 to the annual expenses of the majority of retirees receiving Social Security.

That extra $360 would go to all Social Security recipients. While Social Security is best known for supporting the elderly, the official name of the program is Old Age, Survivors and Disability Insurance, or OASDI. About 15 million beneficiaries are disabled or survivors of deceased workers.

It’s not about increasing benefits just for fun. Rather, it is designed to meet inaccurately low increases in the cost of living from Social Security for decades.

  • The annual cost of living adjustment would be higher

Since 1975, Social Security benefits have been automatically increased each year via a cost-of-living adjustment, commonly known as COLA, to prevent them from decreasing in real terms due to inflation. However, the Department of Labor sets the cost-of-living adjustment using a measure called CPI-W, which is designed to capture the inflation experienced by the urban working-age population.

More recently, the Department of Labor has started trying to measure inflation as experienced by older people with something called CPI-E. The CPI-E has been on average around 0.2% higher per year than the CPI-W.

Although the average difference of 0.2% may seem minor, it gets worse over time: by 2047, benefits calculated with CPI-W cost-of-living adjustments will be 5% lower than benefits calculated with CPI-E. Currently, the purchasing power of a worker’s average benefit of $19,884 will decline by nearly $1,000 over the next 25 years.

  • Retirees who earned the least in their work would earn much more per year

Congress decreed a “special minimum benefit” in 1972 for people who had been paid the least during their working lives. For those who have worked for 30 years, the special minimum benefit has generally been around 85% of the federal poverty level for individuals. Social Security Bill 2100 would increase the special minimum benefit to about 125% of the poverty level.

A 62-year-old who worked full-time for 30 years, earning $15,080 a year (the current federal minimum wage) and claiming his Social Security benefits at age 66 would receive about $11,200 a year under the usual formula. Under the bill’s new special minimum benefit, she would receive about $15,900, or 42% more.

  • Higher benefits for surviving spouses

When one member of a couple who both worked dies, Social Security benefits can drop precipitously for the survivor, sometimes by as much as half. Social Security 2100 would change the rules so that surviving spouses continue to receive at least 75% of the combined benefits received by them and their deceased partner. This would be especially important for women, who tend to outlive men.

  • More for older average workers

Many people will spend their non-Social Security savings if they live long enough. Social Security 2100 recognizes this by increasing benefits for retirees who have been entitled to benefits for at least 15 years. Those who have been eligible for 20 years will receive a 5% increase, or about $1,000 more per year for an average worker today.

  • Caring for others would count as working

Currently, social security benefits for retirees are calculated based on their earnings from jobs they held while working. This penalizes those who must devote unpaid time to caring for children or other dependants. Social Security 2100 would change that by recognizing that caregiving is obviously work and giving those who do it credits as if they had been in the formal workforce.

  • The 1% would pay old age, survivors and disability insurance taxes on income over $400,000

People who don’t pay close attention to Social Security are often stunned to learn that the taxes that fund it are only levied up to a certain income threshold. As mentioned above, this limit for 2022 is $147,000. Anyone earning more than $147,000 this year will pay no OASDI tax on income above that threshold. Social Security 2100 would leave the $147,000 threshold in place – until a worker’s income reaches $400,000. All wages after that would again be subject to OASDI taxes.

Social Security 2100 would also bring many minor changes and technical fixes to the program that would improve it considerably. Those who became severely disabled would be immediately eligible for benefits rather than being forced to wait five months. Partially disabled people would simply have their benefits gradually reduced if they are able to work and earn above a certain threshold, rather than have their benefits cut immediately. The Social Security Administration would send annual statements to people throughout their lives so they could see their projected benefits. And that’s not all.

For all of these reasons, passing Larson’s bill — or simply forcing Republicans to defeat it — should be a major issue for Democrats entering the midterms, especially in an atmosphere in which the party badly needs support. demonstrate results.

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