This week, Devin is interviewing Congressman John Larson, sponsor of the The Social Security 2100 Act. This is the only bill out there that has an actuarial report, from the non-partisan Social Security actuaries, showing that the changes proposed in the bill will accomplish the goals of keeping Social Security solvent into the future.
Devin and Congressman Larson go over some of the specific provisions within this bill:
1. An average 2% increase in benefits. This would give a bigger increase to those who are currently getting a smaller benefit, and a smaller increase to those who are currently getting a larger benefit.
2. An increase in the minimum benefit, to 125% of the federal poverty level. Currently, more than 5 million people are receiving Social Security but the amount of their benefit is less than the federal poverty level.
3. A change in the Consumer Price Index used for Cost of Living Adjustments. Under the current rules, the yearly cost of living adjustment is based on the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers.) This proposal changes the index used to the CPI-E, the Consumer Price Index for the Elderly. The CPI-E better reflects the spending habits of those who are receiving Social Security retirement benefits.
4. Changing the way the Social Security benefits are taxed. The benchmark income for taxation would be increased, and then indexed for inflation each year.
5. An increase in the maximum income subject to Social Security taxes. Under this plan, the current income limits on Social Security taxes will continue to grow, but there is a supplemental Social Security tax on higher earners. Those who pay into the supplemental tax would receive an increased benefit.
6. An increase in Social Security taxes. There would be a gradual increase, from the current 6.2% for the employee and the employer, to 7.4% each by 2042.
Congressman Larson has introduced this bill five years in a row, and he’s optimistic that this will be the year that it passed the House of Representatives.
Resources mentioned in this episode:
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