DeFazio, Sanders Introduce Legislation to Strengthen and Expand Social Security
Congressman Peter DeFazio and Senator Bernie Sanders today introduced joint legislation, the Social Security Expansion Act, to strengthen the Social Security program for future generations on the day that millionaires stop paying into Social Security.
“Millions of Americans—including hundreds of thousands of Oregonians—depend on the earned benefit of Social Security as their livelihood, yet congressional Republicans continue to play games with its funding,” said Rep. DeFazio (D-OR). “This legislation will protect this vital program from future attempts to dismantle it while expanding benefits to better meet the needs of our nation’s seniors.”
Today, February 16th marks the day that millionaires stop paying into Social Security. Social Security provides the majority of income to two-thirds of the United States’ retirees and provides financial security to millions of disabled workers and their children. Alarmingly, current projections show the Social Security trust fund falling short of funds to pay full benefits after 2034.
The Sanders-DeFazio bill would close a tax loophole so that earned income over $250,000 is subject to the Social Security payroll tax. Under current law, the amount of income subject to the payroll tax is capped at $127,000, which means the wealthiest 6 percent of Americans do not pay the same taxes as the rest of the population. 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.
The Social Security Expansion Act would also modify how the Social Security Administration calculates cost-of-living-adjustments for seniors by replacing the current COLA formula, which is based on the price index of goods the average consumer purchases (such as technology, groceries, and childcare), with a new Consumer Price Index for the Elderly (CPI-E) to factor in costs seniors traditionally face such as prescription drugs, utility bills and property taxes.
In addition, the bill would:
- Increase benefits for Social Security recipients by an estimated $65 a month;
- Improve the Special Minimum Benefit by making it easier for low-income workers to qualify for benefits and increasing the benefit level;
- Apply a 6.2 percent Social Security tax on investment income for high-income households, collecting more revenue for the program.
If enacted, the Social Security Expansion Act will provide a critical expansion of benefits and extend the solvency of Social Security for more than 60 years, past 2078.
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