House lawmakers and a panel of experts on Tuesday discussed the merits of a bill that aims to bolster Social Security while implementing an across-the-board benefit increase for current and new beneficiaries.
The Ways and Means Subcommittee on Social Security held a hearing on the Social Security 2100 Act, which was reintroduced in October by Rep. John Larson, D-Conn., the subcommittee's chairman.
The bill, a version of which was last introduced and debated in 2019, would increase payments by about 2% for current and new beneficiaries; establish a new minimum benefit at 25% above the poverty line in order to protect low-income workers; and end the current five-month waiting period to receive disability benefits.
To pay for the improvements, the bill would apply the payroll tax to wages above $400,000, which would affect the top 0.4% of wage earners, according to a fact sheet from Mr. Larson's office. Presently, payroll taxes are not collected on wages over $142,800, according to the fact sheet.
"To be sure, this bill is a first step, an enormous and important step for those who need it the most and whose very security and livelihood hangs in the balance waiting for Congress to act," Mr. Larson said at the hearing. "While I may have preferred a more comprehensive bill, we must not let the perfect be the enemy of the good. The time to act is now."
Collectively, 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 2034, according to the latest Social Security trustees' annual report released in August. On its own, the retiree trust fund has a projected depletion date of 2033, one year sooner than the projection in 2020. The disability insurance trust fund is projected to be depleted in 2057 — eight years sooner than an estimate in 2020.
Republicans on the committee agreed that Congress must act on Social Security, but are not supporting Mr. Larson's bill in large part because of its proposed tax increase.
"While we may not see eye to eye on what needs to be done, one thing that I think Chairman Larson and I are in full agreement with is the cost of delay," said Rep. Tom Reed, R-N.Y., the subcommittee's ranking member. "The longer we wait to fix this, the more draconian the solution is going to look. For those on the left, that could mean bigger and more painful benefit cuts, and for those on the right, even more devastating tax increases that will harm workers, employers and make it that much harder for our kids and grandkids to find success."
Most of the nine witnesses who testified before the subcommittee supported the bill and said Congress should act urgently to pass it, though two witnesses from conservative think tanks denounced it and said it would not make the program solvent.
