I’m a Retirement Planner: What Social Security Could Look Like in a Decade If Harris Wins
Written by
Cara Danielle Brown
Edited by
Jenna Klaverweiden
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Many Americans are increasingly anxious to learn that the Social Security Trust Funds are projected to become depleted in 2035. Since Social Security remains a major source of income for individuals over 65, Congress must take swift action to solve this looming solvency crisis.
A bipartisan agreement has to happen. However, given Democrats’ and Republicans’ vastly different strategies for how they’d each like to fix Social Security, Congress has been at a standstill for quite some time.
So would Kamala Harris winning the presidential election affect the future of Social Security in the U.S.? It could. While she would not have unilateral authority to push through a left-leaning agenda that aims to expand and protect Social Security, Harris’ recent activation of the Democratic base could drive more liberals to the polls and, theoretically, place more Democrats in Congress.
Let’s look at a situation in which this were to happen to find out what Social Security could look like in a decade if Harris and more House Democrats win their elections.
The Overarching Solution
According to Chris Orestis, president at The Retirement Genius, “A combination of reducing demand on Social Security and increasing revenue is essential […] to maintain the program’s sustainability for future generations.” So what does this look like to the Democrats?
Increasing Revenue
Raising payroll taxes to fund Social Security may be in the cards. One way of doing this, stated retirement specialist Andrew Cremé, CFP, “would be eliminating the wage cap. Right now, only the first $168,600 of wages count towards Social Security. I wouldn’t be surprised if that was extended higher,” therefore allowing for a larger contribution from top earners. “The challenging part there would be also increasing the maximum benefit since that would occur simultaneously.”
Another, more direct way of raising payroll taxes, according to the Center on Budget and Policy Priorities, would be increasing Social Security payroll tax rates which would affect all covered workers. “Increasing rates alone could close the entire solvency gap,” wrote Kathleen Romig. “Even a modest change, such as a gradual increase of .03 percentage points each for employees and employers … could close about one-fifth of the gap.”
Reducing Demand
Because the Democrats oppose the Republican’s proposal to reduce benefits for those in need or raise the age limit above 65, the second change that could be coming to Social Security is reducing “the income-related monthly adjusted amount (IRMAA) limit for Medicare Parts B & D,” stated Crème. Currently, IRMAA penalizes benefits for individuals earning over $103,000 and couples earning over $206,000. “By reducing this number, it would keep more money in the Social Security system and not penalize lower-income families.”
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out “Here Are All the Promises Trump Has Made About Social Security If He’s Reelected.”
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