Biden on Social Security Cuts: ‘I Will Not Do That’ — What Are His Options?
While election officials sort through the results of the 2022 midterms to determine which party will control Congress, President Joe Biden reached out an olive branch to Republicans this week — except when it comes to Social Security.
Speaking to a media gathering on Wednesday, Biden said he is “open to any good ideas,” and that “the future of America is too promising to be trapped in an endless political warfare.” But as CNBC reported, the president also said he will not negotiate with Republicans on fundamental changes to Social Security and Medicare.
“I will not do that,” Biden said.
The president’s comments were likely aimed at a Republican Study Committee proposal that would link the full retirement age for Social Security benefits to increases in life expectancy since the program was first established. As GOBankingRates previously reported, such a move would increase the FRA to 70 years old from the current 66 or 67, meaning millions of Americans could end up with much lower payments.
Although that proposal has gotten pushback from Democrats and senior advocates, almost everyone agrees that something must be done to bolster Social Security. Under the present system, the program’s Old Age, Survivors, and Disability Insurance trust fund will become insolvent in 2035. When that happens, Social Security taxes paid by employers and employees are expected to cover only about 78% of the benefits in ensuing years.
In terms of Biden’s options for shoring up the program, a few proposals are winding their way through the legislative system right now. One is the Republican Study Committee proposal, which Biden said he will oppose.
Another bill currently under consideration proposes to delay the depletion of the OASDI until 2052 and reduce the federal budget deficit by $12.3 trillion over the next 75 years, The Motley Fool reported. That bill — called the Protecting and Preserving Social Security Act — was initially proposed in 2019 and reintroduced this past summer by U.S. Sen. Mazie Hirono (D-Hawaii) and U.S. Rep. Ted Deutch (D-Fla.).
To reach its funding targets, the bill would gradually phase out the maximum amount of earnings people pay Social Security taxes on. That limit is currently $147,000 a year and will increase to $160,200 in 2023.
A similar bill proposed this year is the Social Security Expansion Act, sponsored by Sen. Bernie Sanders (I-Vt.), Sen. Elizabeth Warren (D-Mass.) and Rep. Peter DeFazio (D-Ore.). It aims to extend the solvency of the trust funds by 75 years by raising the maximum taxable earnings to $250,000 a year. It also proposes to raise Social Security benefits by $200 a month and require individual millionaires and billionaires to pay a 12.4% tax rate on Social Security, up from the current 6.2% individual rate.
Another bill, authored by Rep. John Larson (D-Conn.), chairman of the House Ways and Means Social Security Subcommittee, would increase the maximum taxable earnings to $400,000 a year and increase annual average benefits by 2%. The bill, called Social Security 2100: A Sacred Trust, has 200 co-sponsors in the U.S. House.
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