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As the debate over Social Security reform heats up in the run-up to the November election, a congressional proposal to expand the federal program has received new approval from California lawmakers.
In August, a joint resolution was passed by both the Senate and the State Assembly.
Now it heads to Capitol Hill with a specific purpose: to ask California representatives in Congress to support the expansion of Social Security by voting in favor of the bill formally known as Social Security 2100: A Sacred Trust.
“It’s the state of California telling Congress that we want you to pass HR 5723,” said Sen. Nancy Skinner, the bill’s lead author.
The latest version of Social Security 2100 was introduced in October by Rep. John Larson, D-Conn. The event included the presence of high-profile Democrats, including House Ways and Means Committee chairman Richard Neal, D-Mass., and Rep. Alexandria Ocasio-Cortez, DN.Y.
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The bill has gained widespread support among Democratic House lawmakers, with 202 co-sponsors. Democrats currently hold a majority of the House, with 221 members.
Most California House Democrats have signed up as co-sponsors, with two exceptions: House Speaker Nancy Pelosi and Rep. Scott Peters. Neither office responded to requests for comment.
Social Security has an estimated time frame of 13 years in which it can continue to pay full benefits. After that, by 2035, only 80% of benefits will be paid, according to a report from the program’s administrators released in June.
“Social security is a lifeline for so many people, far more people than the public often realize,” Skinner said.
Bill would apply payroll taxes to higher incomes
Social Security 2100 offers one major change, Skinner says, aimed at solving those financing problems: applying Social Security payroll taxes to people with higher incomes.
Currently, only wages up to $147,000 are subject to those taxes, with employees and employers each paying a rate of 6.2%, for a total of 13.4%.
The ceiling – often referred to as the taxable maximum – is adjusted every year.
California State Senator Nancy Skinner speaks in Newport Beach, California, on Oct. 22, 2019. (Photo by Meg Oliphant/Getty Images)
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The Social Security 2100 proposal calls for that payroll tax to be reapplied for wages over $400,000, a change Skinner calls “one of the key features” of the bill.
“Multi-millionaires and even billionaires pay the same amount to the Social Security system as someone who makes $150,000,” Skinner said.
In California specifically, there is a small percentage of very high-income people who can afford to contribute more to Social Security, she said.
“The fact that we haven’t adjusted it is partly why we’re going to be short,” Skinner said.
Social Security 2100 proposes many other changes to make benefits more generous. That includes a broad increase of about 2% in the average benefit for both new and existing beneficiaries.
It would also raise the minimum benefit to 25% above the federal poverty line. It also aims to change the way annual cost of living adjustments are measured; improve benefits for widows and widowers; increase access to benefits for some students and children; repeal of rules leading to reduced benefits for civil servants; abolition of the five-month waiting period for disability benefits; and create healthcare loans.
Rep. John Larson, D-Conn., and other lawmakers discuss the Social Security 2100 Act, which would include increased minimum benefits, on Capitol Hill on Oct. 26, 2021.
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How the proposals affect social security solvency
The latest proposal would move the exhaustion date for Social Security funds to 2038, based on an analysis of the bill made last year by the chief actuary’s Office of Social Security.
Most provisions to increase Social Security benefits would only last five years. Consequently, groups such as the Center for Budget and Policy Priorities and the Committee on a Responsible Federal Budget favor earlier versions of the bill, which include less generous increases in benefits, but want to extend the program’s solvency into the next century.
A separate bill, proposed by Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., introduced this year, would increase the program’s solvency for 75 years, while adding $2,400 per year to benefits. That proposal calls for payroll taxes to be reapplied on incomes of $250,000 instead of $400,000.
Social Security and the midterm elections
As the November election approaches, President Joe Biden has stepped up social media attacks on Republicans for their Social Security plans.
This week, that included a tweet accusing Senator Rick Scott of having plans to “put Social Security and health care on the chopping block.” Scott has denied those claims.
But fears for the future of the program have led Democrats to ramp up their campaigns on behalf of the program ahead of the November election.
Michigan Democratic House lawmakers recently held a delegation to call on the House to approve Social Security by 2100.
Jon Bauman, chairman of the Social Security Works Political Action Committee, expects to appear at more than 40 events across the country this election cycle.
“I am very concerned about candidates who want to end the program, privatize the program and in any way cancel the program in November,” Bauman said.
“I don’t think that’s going to happen because the program is so popular,” he said. “But is it scary? Yes.”