What a brand new plan in Congress would imply for advantages

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The Democrats in the House of Representatives are reintroducing a social security reform law popular with their party. This time around, it includes some changes aimed at gaining more support from the Republicans.

Known as the Social Security 2100 Act, the bill is presented by Rep. John Larson, D-Conn., Chairman of the House Ways and Means Subcommittee on Social Security.

Rep. Alexandria Ocasio-Cortez, DN.Y., and House Ways and Means Committee chair Richard Neal, D-Mass., Appeared with Larson on Tuesday to announce the reintroduction of the bill.

Neal called on lawmakers to offset increasing wealth concentration in the US by adopting this Social Security proposal and expanding the expanded child tax credit.

“We have this rare moment to achieve seismic achievement and this is the time to do so,” he said.

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The new version of the bill, titled Social Security 2100: A Sacred Trust, follows the latest estimates by the Social Security Administration that the trust funds supporting the program will be depleted in just 13 years. At this point in time, in 2034, only 78% of the promised benefits will be due.

The bill plans to extend that date to 2038 to give Congress more time to find a long-term solution to the program’s solvency problems.

The move would also take into account suggestions made by President Joe Biden during his presidential campaign.

“We have one person on Pennsylvania Avenue who knows and understands that Social Security is a sacred trust,” Larson said of Biden.

This new bill combines Biden’s proposals with House Ways and Means initiatives to expand and improve social security benefits, he said.

“There are a lot of things that are attractive and nothing that I think should cause problems for Democrats in an election year,” said Nancy Altman, president of Social Security Works, an advocacy group that advocates the expansion of welfare benefits.

Like Biden’s plan, the Social Security 2100 Act would set a higher minimum benefit for low-income workers. The benefits would be set at 125% above the poverty line and linked to the current wage level.

There is also an increase in benefits for both new and existing beneficiaries of around 2% of the average benefit.

Annual cost of living adjustments would be tied to the elderly consumer price index, or CPI-E. The argument is that this experimental index better reflects the costs seniors face. Biden also included this change in his social security proposals.

Notably, the Social Security Act 2100 proposed in 2019 had more than 200 co-sponsors, despite all of them being Democrats. Legislators indicated on Tuesday that the new version of the bill has already found similar support.

Having this social safety net is not only good for us personally, it also makes us feel part of a society that respects our elders and values ​​our vulnerable.

Representative Alexandria Ocasio-Cortez

Democratic Congressman from New York

Ocasio-Cortez spoke about how Social Security benefits had helped her family when her father died unexpectedly of cancer.

“Social security checks have helped my family,” she said. “That’s why my brother and I got to go to college.”

“That’s why I had confidence during my studies that my mother would have something to eat,” she added. “Having this social safety net is not only good for us personally to calm us down, it also helps us feel part of a society that respects our elders and values ​​our vulnerable.”

I am looking for cross-party support

Rep. John Larson, D-Conn., Leaves the Capitol following the final votes of the week on February 28, 2019.

Bill Clark | CQ Call Group | Getty Images

The plan also incorporates some elements that can help get support from across the gang.

The new version would remove regulations that cut social security benefits for civil servants and their spouses, widows or widowers who also have retirement income. These are known as Windfall Elimination Commission and Government Pension Offset.

This issue was raised recently at a House of Representatives hearing on social security and is supported by both parties.

Removing a proposal – a higher wage tax rate – can also help to gain more support. The Social Insurance Act 2100 had previously called for a gradual increase in contributions from employees and employers to 7.4% from the current 6.2% over a period of around 20 years.

However, legislation calls for an increase in social security taxes paid by high earners. In 2021 these taxes will be capped at $ 142,800 in wages, and in 2022 they will increase to $ 147,000. This proposal will re-levy wage taxes above $ 400,000, which is also in line with what Biden proposed.

At the same time, the draft law would also raise the thresholds above which income, including social security, is taxed. The plan is to change this to $ 35,000 for individuals and $ 50,000 for couples, down from $ 25,000 and $ 32,000, respectively.

The bill would also prevent benefits for certain beneficiaries from being cut if the national average wage index was changed due to unforeseen circumstances, such as B. Events with an impact on the economy, decreases.

It would also require the SSA to send paper statements to all workers aged 25 and over, unless they request electronic delivery.

Other changes in the bill include expanding benefits for students up to the age of 25, increasing certain widow’s and widower’s benefits, increasing beneficiaries’ benefits after 15 years, abolishing a five-month waiting period for disability benefits and creating Care credits, so that the retirement benefits of people who take time off from working life, are not reduced.

It remains to be seen how much attention this bill will receive amid the busy legislative agenda of Congress and whether it will be adopted by Republican lawmakers.

However, proponents like Social Security Works are optimistic.

“We all hope that after the reconciliation and the debt ceiling and all those other things are done, they will bring up social security,” Altman said.

The National Committee for the Maintenance of Social Security and Health Insurance was also among the groups that supported the proposal.

“This bill contains good news for everyone, and it is only pertinent as Social Security affects the life of almost every American,” said Max Richtman, president and CEO of the organization.

“It is time the entire House passed Rep. Larson’s bill and sent it to the Senate,” he said.

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