The day after and I will attempt to recover from all the festivities and this damn head cold…..
I agree that Social Security needs updating….and yes it may soon go broke but not the fault of the program more so because of the idiots that have been working to kill this social program from it’s inception.
Pres. Biden is offering up a few changes that he says will go a long way to stabilizing the program.
A list of the changes Biden foresees…..
1. Lift payroll taxation on high earners
The most notable change proposed by Biden involves collecting more payroll tax revenue from high-earning workers. In 2023, all earned income between $0.01 and $160,200 is subject to the 12.4% payroll tax. However, wages and salary above $160,200 aren’t subjected to this tax. Well over $1 trillion in earned income “escapes” the payroll tax this way every year.
Biden’s plan would reinstate the payroll tax on earned income above $400,000, while creating a doughnut hole between the maximum taxable earnings cap (the $160,200 figure in 2023) and $400,000 where earned income would remain exempt. Since the maximum taxable earnings cap increases over time, this doughnut hole would eventually close and subject all earned income to the payroll tax.
2. Change Social Security’s measure of inflation from the CPI-W to the CPI-E
The other sweeping change Biden is offering is to shift the program’s inflationary tether from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the Consumer Price Index for the Elderly (CPI-E).
The issue with the CPI-W is that it tracks the spending habits of “urban wage earners and clerical workers,” which doesn’t make much sense when senior citizens make up the bulk of Social Security beneficiaries. Since the CPI-E specifically tracks the expenditures of seniors, it should result in more accurate cost-of-living adjustments being passed along to beneficiaries.
3. Increase the special minimum benefit
A third Social Security reform proposed by Biden involves increasing the special minimum benefit paid to lifetime low-earning workers.
This year, the maximum payout for a lifetime low-earner with 30 years of coverage is just $951 per month. That’s more than $180/month below the federal poverty level for a single filer. Under Biden’s plan, the special minimum benefit would rise to 125% of the federal poverty level. For a lifetime low-earner, it would mean a monthly payout boost of nearly $500.
4. Boost the primary insurance amount for aged beneficiaries
The fourth and final change would see the primary insurance amount (PIA) steadily increased over time for older beneficiaries. Specifically, the PIA would grow by 1% annually from ages 78 through 82 until a 5% cumulative increase was realized.
The purpose of boosting the PIA is to account for higher late-in-life expenditures. As we age, things like medical transportation costs and prescription drugs can become costlier. This would help offset some of those expenses.
The bigger problem for Joe Biden, and pretty much every president for the past four decades, is that getting the needed votes in the U.S. Senate to amend Social Security has been impossible. Whereas a simple majority of the vote suffices in the House, 60 votes are needed in the Senate to make changes to the Social Security program. Neither party has held 60 seats in the Senate since the late 1970s. This means any major overhaul to Social Security will require bipartisan support.
Basically a good idea but as usual will go nowhere at all.
I Read, I Write, You Know
“lego ergo scribo”