Rep. John Larson, D-Conn., said Sept. 13 that Congress must act to address Social Security's impending insolvency before it's too late.
"The time to act is long overdue," Larson said at the Harkin Retirement Security Symposium in Washington, after receiving a Harkin Retirement Security Award.
In April, the Social Security trustees' annual report found that Social Security's main trust fund for retirees and their families faces depletion in 2033, and if depleted, the trust's income would be able to pay only 77% of its scheduled benefits. Collectively, Social Security's trust funds — including the other fund that covers disabled workers and their families — will run out of money by 2034, the report projected.
Larson, who serves as ranking member of the House Ways and Means Social Security Subcommittee, is also the author of a bill known as the Social Security 2100 Act, which currently has the support of 177 Democratic co-sponsors.
The bill, which Larson first introduced in October 2021, would provide a 2% increase in benefits for current and new beneficiaries, adjust the annual cost-of-living adjustment formula, and make changes to the income tax cap. There is currently an income tax cap for Social Security taxes, so individuals making more than $160,200 in income, as of this year, do not get taxed on their earnings above that amount, according to the Social Security Administration.
Larson's bill would modify that formula, adding an additional tier to tax all earnings above $400,000. The legislation would also add a 12.4% net investment income tax, or NIIT, for taxpayers making more than $400,000. Currently, there is a 3.8% NIIT on certain net investment income for taxpayers meeting an income threshold of $200,000 for single taxpayers or $250,000 for married taxpayers filing jointly, according to the IRS.
If enacted, the Social Security 2100 Act would extend the projected depletion date of Social Security's trust funds by 32 years — moving it from 2034 to 2066 — according to a July report from the Social Security Administration's chief actuary, Stephen C. Goss.
Goss, who also spoke at the Harkin Retirement Security Symposium on Sept. 13, said that by 2034, "we're going to have to make some changes" to avoid a reduction in benefits.
He noted some solutions are to raise the income tax cap or increase the tax on investment income, such as Larson's bill proposes.
However, Larson was adamant that "Social Security 2100 isn't the only plan that's out there. There are many plans out there. If you got a better idea, put it on the table, explain how you're going to pay for it, and then vote," he said.
Larson emphasized that only Congress holds the power to address Social Security's impending depletion.
"This is something that has to be done by Congress," he said.
