Lawmakers on both sides of the aisle agreed that they must act to shore up Social Security funding and the time to do so is running out, but there wasn't a consensus on exactly how to make that happen Thursday on Capitol Hill.
The House Ways and Means Committee hosted a hearing on the Social Security 2100 Act, introduced by Rep. John B. Larson, D-Conn., that aims to bolster Social Security while implementing an across-the-board benefit increase for current and new beneficiaries and improving cost-of-living adjustments, among other provisions.
The added benefits would be paid for by gradually increasing the contribution rate beginning in 2020 so that by 2043, workers and employers each would pay 7.4% toward Social Security, instead of the 6.2% today, according to the congressman's website. The bill would also tax payroll income above $400,000 at a 12.4% clip.
The bill currently has 210 co-sponsors — all Democrats.
The bill would protect the Social Security benefits for millions of Americans and strengthen the system, said Richard Neal, D-Mass., the committee's chairman. "It is fully paid for," he said. "It asks the most fortunate among us to pay their fair share. And it asks everyone to pay slightly higher premiums so that Social Security can remain strong."
Republicans on the committee aren't fans of raising taxes to fund the bill.
Moreover, Kelly Brozyna, the founder and president of the Colorado Business Development Foundation, a non-profit that provides entrepreneurial resources within the state, was one of five witnesses — and the lone critic — who testified Thursday before the committee. The bill's tax increases would "take a painful bite out of the incomes of entrepreneurs, workers and small business owners," she said.
Kevin Brady, R-Texas, the committee's ranking member, said Republicans want to secure Social Security benefits with long-term economic growth, not raising taxes. "The best way to achieve that growth is through promoting work, not penalizing it. Social Security already discourages work, particularly among women and seniors. Let's reform the program so that the best safety net available — a good paying job — is part of the equation."
Following a question from Rep. Thomas Suozzi, D-N.Y., Stephen C. Goss, chief actuary of the Social Security Administration, said "more economic growth will certainly be a help, but to close the gap that we have facing us (is) highly unlikely."
Mr. Larson and other Democrats criticized Republicans for not putting forth a plan of their own in writing.
The Social Security trust funds — one that covers retirees and their families and one that covers disabled workers and their families — will be out of money by 2035, according to the Social Security trustees' annual report issued in April. The fund devoted to retirees is projected to become depleted in 2034, at which time Social Security revenue will cover only 77% of benefits promised, the report said.
If "substantial actions" are deferred for several years, the burden would be concentrated on fewer generations, the trustees said. Much larger changes would be necessary if action is deferred until 2035.
Nancy J. Altman, president of Social Security Works, an organization committed to safeguarding the program, is a supporter of Mr. Larson's bill. "Restoring Social Security to actuarial balance throughout the 21st century and beyond, as the Social Security 2100 Act does, is an important step to restoring that intangible benefit of security," she told the committee Thursday.
Time is off the essence, said Rep. Vern Buchanan, R-Fla., who does not support the bill. "I think this is a good start," he said. "If you look historically, unless we do something together, this isn't going to get done in a serious way or it's going to be an ongoing challenge."
A markup, where the bill can be amended and debated in committee, has yet be scheduled.