More Help For Children Of Deceased Workers
Some people may not be aware that Social Security provides benefits to children of disabled or deceased workers if they are full-time students.
The legislation would raise the eligibility age for students to collect benefits to 22, provided the individual is a full-time student in college or a vocational school. Currently, the program ends for children of disabled or deceased workers when they turn 19 years old or before that age if they are no longer a full-time student.
The lawmakers say extending this benefit would help ensure that the children of deceased or disabled parents can continue their education beyond high school.
Larson Introduces Landmark Social Security Bill
Washington, D.C. – Today, House Ways and Means Social Security Subcommittee Chairman John B. Larson introduced Social Security 2100: A Sacred Trust. The legislation has nearly 200 cosponsors and has been endorsed by more than 100 advocacy groups.
“Social Security 2100: A Sacred Trust will expand benefits and strengthen Social Security.The pandemic has only underscored what we already knew and has exacerbated systemic inequities — current benefits are not enough!5 million seniors are living in poverty due to longstanding discrimination in the labor force that affects mostly people of color and women. These are our sisters, brothers, aunts, uncles, and neighbors. For too long, Congress has forsaken its duty to enhance benefits. With 10,000 Baby Boomers a day becoming eligible, and with Millennials needing Social Security more than any generation, the time for Congress to act is now,” said House Ways and Means Social Security Subcommittee Chairman John B. Larson .
A fact sheet on the bill can be found here.
The section-by-section can be found here.
A list of endorsing organizations can be found here.
The bill text can be found here.
The press conference can be viewed here.
“Subcommittee Chairman Larson is the fiercest fighter in Congress to strengthen Social Security and protect beneficiaries. I applaud his tireless commitment to preserve and expand this critical earned benefit,” said House Ways and Means Chairman Richard Neal.
Does New Hill Spending Deal Affect Social Security & Medicare
Congressional negotiators have avoided a government shutdown by reaching a compromise agreement on federal spending for the remainder of FY 2023. The Hill newspaper reported that lawmakers had reached a bipartisan, bicameral framework that should allow them to finish an omnibus appropriations bill that can pass the House and Senate and be signed into law by the President. We spoke to NCPSSM legislative director Dan Adcock about the spending deal and whether it impacts Social Security and Medicare.
Q: What basically happened here?
Adcock: Republicans and Democrats were able to forestall a government shutdown that would have been triggered on Friday had they failed to agree on spending for the remainder of FY 2023. Late yesterday the two parties arrived at a compromise agreement on appropriations for the rest of the fiscal year, which began on October 1, 2022. The result will be an Omnibus spending bill because it combines all congressional appropriations into a single piece of legislation.
Q: Does this process affect Social Security and Medicare benefits?
Q: What about funding for the Social Security Administration?
Q: The current process is different than the debt ceiling negotiations, right?
Q: Is the spending agreement a done deal?
Read Also: What Can Someone Do With Your Social Security
Joe Biden Has Proposed Sweeping Reforms For Social Security
In 2020, prior to his election as president, then-candidate Joe Biden released a plan he believed would strengthen Social Security for decades to come. Although there are four Social Security changes Biden is seeking, two stand out as key to shoring up the program.
This biggest Social Security change proposed by Biden would tackle income inequality head-on and generate a lot of extra revenue.
In 2023, Social Security’s 12.4% payroll tax is applicable to earned income between $0.01 and $160,200. “Earned income” means wages and salary but not any sort of investment income. Approximately 94% of all working Americans earns less than the maximum taxable earnings cap . For the other 6% of workers, earned income above this $160,200 level is exempt from the payroll tax.
Joe Biden’s proposal would create a doughnut hole between the maximum taxable earnings cap and $400,000 where earned income would remain exempt, as well as reinstate the payroll tax on earned income above $400,000. Since the maximum taxable earnings cap tends to rise over time with inflation, this doughnut hole would eventually close decades down the line. This immediate increase in payroll tax revenue should push back the asset reserve depletion date of the OASI.
The other notable Social Security change President Biden is seeking is the replacement of the program’s measure of inflation.
Repealing Social Securitys Wep And Gpo Rules Would Be Misguided
Congress faces mounting pressure from some current and retired public employees to repeal Social Securitys Windfall Elimination Provision and Government Pension Offset , provisions designed to treat workers with work not covered by Social Security comparably to workers whose whole careers are covered. The bill to repeal WEP and GPO, H.R. 82, includes no offsetting tax increases or spending cuts, and so would worsen Social Security financing, moving the trust funds reserve depletion date forward by a year and adding nearly $150 billion to the programs costs over the next ten years.
Far from targeting seniors most in need, repealing WEP and GPO would restore windfall benefits to workers who did not pay into Social Security for much or all of their careers and who have other pensions that were designed to replace Social Security . There is a case for updating the rules for workers with earnings not covered by Social Security, using data that are available today but were not at the time of WEP and GPOs creation. But repealing them altogether would be costly and inequitable.
You May Like: Pikeville Ky Social Security Office
The Government Pension Offset
Typically, Social Security beneficiaries can receive spouse benefits if their benefits are less than half that of their living spouses benefits, and can receive survivors benefits if their benefits are less than those of their deceased spouses. The amount of spouse or survivors benefits is reduced dollar-for-dollar by the amount of beneficiaries retirement benefits based on their own earnings. This is called the dual entitlement rule. Consider a woman who qualifies for a monthly $1,000 Social Security retirement benefit, and her husband qualifies for a $1,500 benefit. When he dies, she would receive a $500 survivors benefit , which would be combined with her own retirement benefit of $1,000 for a total benefit of $1,500, equal to the amount of her husbands benefit when he was alive.
For beneficiaries with substantial non-covered work, the amount of their Social Security spouse or survivors benefit is reduced by two-thirds of the amount of their non-covered pensions. Consider, for example, a woman who receives no Social Security benefit based on her covered work but has a $1,000 monthly pension based on her non-covered work, and her husband receives a $1,500 Social Security benefit. When he dies, she would receive an $833 Social Security survivors benefit in addition to her $1,000 pension bringing her total benefits to $1,833. Absent GPO, she would have received the full $1,500 survivors benefit, for combined monthly pension benefits of $2,500.
How Bill Would Expand Retirement Benefits
The latest Social Security 2100 bill put forward by Larson seeks to enhance Social Security benefits in multiple ways.
It calls for increasing all checks by about 2% of the average benefit. At the same time, it would also set the minimum benefit above the poverty line and tie it to current wage levels.
The measure for the annual cost-of-living adjustment would be changed with the goal of better keeping up with the costs retirees face.
Widows and widowers would also receive more generous benefits. It would repeal rules that reduce benefits for public workers, including the Windfall Elimination Provision and Government Pension Offset.
The bill also calls for providing caregiver credits to people who take time out of the workforce to care for children or other family members.
Benefits for students would be extended to age 26. Children who live with grandparents or other relatives would also have increased access to benefits.
The bill also calls for ending the five-month waiting period for disability benefits.
In order to pay for the benefit increases, the bill calls for reapplying the Social Security payroll tax on wages above $400,000, which would affect an estimated 0.4% of wage earners.
Currently, wages of up to $147,000 are taxed for Social Security in 2022. Employers and employees each pay a 6.2% tax on wages, for a total of 12.4%.
Don’t Miss: Apply For Disability Social Security
When Will We Hit The Borrowing Cap
The date that the federal government can no longer fully meet its obligations on time is a moving target, but there are signs that it is approaching sooner than previously thought.
Analysts at Goldman Sachs expect the date to arrive around August. The Bipartisan Policy Center, which closely tracks the debt limit deadline, projected last summer that the X-date would likely arrive no sooner than the third quarter of 2023. But those estimates have been thrown into flux by uncertainty over the Treasury Departments cash flow, which could change depending on the trajectory of the economy and the fate of certain policies.
Shai Akabas, the director of economic policy at the Bipartisan Policy Center, said that the the situation has deteriorated somewhat from last June and that the actual X-date could now be sometime around the middle of the year.
Key House Minority Leaders Threaten To Force Cuts To Social Security And Medicare
There is concrete evidence that key House minority leaders plan to hold the borrowing cap hostage, threatening a catastrophic U.S. default unless they get the cuts they seek to Social Security and Medicare. According to Bloomberg Government reporting, four House Republicans, all vying to be the next House Budget Committee chair, have indicated that they plan to hold the debt ceiling hostage to Social Security and Medicare cuts if their party regains the House majority:
Read Also: Why Is My Social Security Direct Deposit Late This Month
Understand The Us Debt Ceiling
What is the debt ceiling?The debt ceiling, also called the debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury securities, such as bills and savings bonds, to fulfill its financial obligations. Because the U.S. runs budget deficits, it must borrow huge sums of money to pay its bills.
When will the debt limit be breached?Congress passed legislation in December 2021 to raise the limit by $2.5 trillion and stave off the threat of default until 2023. Unless it is raised again, the statutory cap is expected to be reached at some point next year.
Why is there a limit on U.S. borrowing?According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so that the Treasury would not need to ask for permission each time it had to issue debt to pay bills.
What would happen if the debt limit was hit?Breaching the debt limit would lead to a first-ever default for the United States, creating financial chaos in the global economy. It would also force American officials to choose between continuing assistance like Social Security checks and paying interest on the countrys debt.
Govtrackus Is Taking A New Focus On Civic Education
Help us develop the tools to bring real-time legislative data into the classroom.
If youve visited a bill page on GovTrack.us recently, you may have noticed a new study guide tab located just below the bill title. This is part of a new project to develop better tools for bringing real-time legislative data into the classroom. We hope to enable educators to build lesson plans centered around any bill or vote in Congress, even those as recent as yesterday.
Were looking for feedback from educators about how GovTrack can be used and improved for your classroom. If you teach United States government and would like to speak with us about bringing legislative data into your classroom, please reach out!
You May Like: National Committee To Preserve Social Security And Medicare
Manchin Calls For Deal On Social Security Medicare Medicaid In New Congress
Centrist Sen. Joe Manchin on Thursday called for a broad bipartisan deal to protect the solvency of Social Security, Medicare and Medicaid, popular programs that face serious funding issues over the next few decades.
Youre going to get your financial house in order. We cannot live with this crippling debt, Manchin, whose pivotal vote both delayed and helped pass big pieces of President Bidens agenda, told Fortunes Alan Murray at a CEO conference.
If we dont look at the trust funds that are going bankrupt, whether they be Medicare, Medicaid, Social Security, highway, all the ones there are tremendous problems right now, Manchin said when asked where he sees areas of potential compromise in Washington after the Nov. 8 midterm elections.
If we cant come to grips of how we face the financial challenge that this country has, then were all going to be paying a price that we cant afford, he said.
Manchin, who sank Bidens ambitious $3 trillion Build Back Better agenda in December, has often talked about the financial challenges facing Social Security and Medicaid.
The Social Security Administration announced last year that it is not projected to have the funds to pay full benefits past 2033.
In February, Manchin proposed addressing that shortfall by increasing the amount of income subject to taxation to fund Social Security from $147,000 to $400,000.
Quit writing checks to everybody, he said.
A Benefits Boost: $200 Plus Cola Changes
Anyone who is a current Social Security recipient or who will turn 62 in 2023 the earliest age at which an individual can claim Social Security would receive an extra $200 per monthly check.
There are some additional tweaks that would boost benefits over the long-term. One of the primary changes would be to base the annual COLA on the Consumer Price Index for the Elderly , rather than the current index that the Social Security Administration uses for its calculation the Consumer Price Index for Urban Wage Earners and Clerical Workers .
The CPI-E more accurately reflects seniors’ spending patterns, according to experts on Social Security. For instance, it puts more weight on health care expenses, which can be considerable for senior citizens.
If the CPI-E had been used to index the annual COLA for Social Security, a senior who filed for Social Security benefits over 30 years ago would have received about $14,000 more in retirement than compared with the CPI-W, according to the Senior Citizens League.
The bill would also boost benefits for the lowest income earners in the U.S., who receive benefits under a program called the Special Minimum Benefit. Under the legislation, it would be indexed so that it is equal to about 125% of the federal poverty line, or about $1,400 a month. In 2020, the Special Minimum Benefit paid about $900 per month, according to the Social Security Administration.
Read Also: Social Security Office In Newark
The Windfall Elimination Provision
For a typical worker, Social Security benefits are calculated based on the highest 35 years of work. First, the agency calculates the workers average indexed monthly earnings , then enters it into the Social Security benefit formula to calculate the workers basic benefit amount . The formula is progressive, meaning it replaces a greater share of earnings for people with lower earnings than for those with higher earnings. In 2022, the PIA formula replaces 90 percent of the first $1,204 in AIME, 32 percent of AIME over $1,024 and up to $6,172, and 15 percent of AIME above that amount.
For beneficiaries with substantial non-covered work, instead of replacing 90 percent of AIME up to the first bend point , the current formula replaces 40 percent. The other two parts of the PIA formula remain the same. However, the amount of the WEP reduction cannot exceed half of the non-covered pension a worker receives, and the WEP does not apply to workers with 30 or more years of covered work. There is also an adjusted formula for workers with 20 to 30 years of covered work, which limits the WEP reduction.
Bipartisan Support May Be Hard To Come By
Social Security 2100: A Sacred Trust currently has 202 Democratic co-sponsors in the House of Representatives.
It is one of several Democratic proposals that aim to tackle Social Security reform. While the proposals vary, each seeks to sweeten benefits while making the wealthy pay more into the program.
However, one key difference is how long they would extend the program’s solvency. The Social Security 2100 Act would extend the depletion date to 2038 from the current projected date of 2035. Another proposal led by Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., would extend the program’s solvency past 2096 while also expanding benefits.
Moreover, a recent analysis from the Center on Budget and Policy Priorities points out many of the provisions to expand benefits in the current Social Security 2100 plan would only last five years.
You May Like: Maximum For Social Security Tax
Wep And Gpo Level The Playing Field For Workers Who Dont Pay Into Social Security
The WEP and GPO were established nearly 40 years ago to treat equitably workers who pay Social Security taxes for their entire careers and those who do not pay Social Security taxes on some of their earnings and thus do not earn Social Security benefits based on that work, instead receiving workplace pensions designed to replace Social Security. About 4 percent of workers work in non-covered jobs, almost all of them public employees. About one-quarter of active state and local government employees are in jobs not covered by Social Security in addition, some federal workers hired before 1984 are not covered. The pensions non-covered workers receive from this work are typically substantial on average, beneficiaries affected by the WEP receive non-covered pensions that are higher than the average Social Security retirement benefit.
Moreover, most people with non-covered earnings receive Social Security in addition to their non-covered pensions. This can occur for two reasons. First, they can become eligible for Social Security worker benefits after working at least ten years in jobs that are covered by Social Security. Second, they can become eligible for a Social Security spouse or survivors benefit based on their spouses Social Security-covered work.