The newly introduced Social Security Expansion Act, if passed, would increase benefits for current and future recipients while lengthening Social Security’s solvency.
Left unchanged, Social Security is currently able to fully pay benefits through 2035. After that, if nothing else is done, benefits may need to be reduced to 80% of promised levels.
Currently, incomes up to $147,000 per year are subject to the Social Security payroll tax. The bill would pay for itself by subjecting incomes over $250,000 to the Social Security payroll tax. Income between $147,000 and $250,000 would not be subject to the payroll tax. Additionally, investment and business income would also become subject to the payroll tax. It is estimated that 93 percent of households would not face any tax increase under the proposal.
These new revenues would both extend Social Security’s solvency and allow for an increase in benefits. Under the plan, beneficiaries would receive an extra $200 per month, or $2,400 per year. Benefits should also increase more from year to year due to a change in how cost of living adjustments would be calculated. The new method would better reflect the actual prices paid by elderly individuals. Minimum benefits would also increase for low-income workers. Even with the increased benefits, the new revenues would keep Social Security solvent through the year 2096.
The bill was introduced by Senator Bernie Sanders and Representative Peter DeFazio. The bill is co-sponsored by seven additional Senators and nineteen additional members of the House of Representatives.
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