February 17, 2017 10:00 a.m.
Congressman Peter DeFazio and Senator Bernie Sanders have introduced joint legislation that DeFazio says will strengthen the Social Security program for future generations.
The Social Security Expansion Act was introduced on Thursday. That’s the day that millionaires stop paying into Social Security for the year, according to DeFazio. He says that Social Security provides the majority of income to two-thirds of retirees in the United States and provides financial security to millions of disabled workers and children. Current projections show that the Social Security trust fund will start falling short of funds to pay full benefits by 2034.
A press release from the Congressman’s office says that the DeFazio/Sanders bill would close a current 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. DeFazio claims that means the wealthiest six 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 the top 1.5% of wage earners.
The Social Security Expansion Act would also modify how the Social Security Administration calculates cost-of-living adjustments by replacing the current COLA formula, which is based on the price index of goods the average consumer purchases. A new Consumer Price index would be put into place to factor in costs that seniors traditionally face like prescription drugs, utility bills and property taxes.
DeFazio says the bill would also:
*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 benefits 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 also provide a critical expansion of benefits and extend the solvency of Social Security for more than sixty years, past 2078, according to Congressman DeFazio.