Social Security At A Crossroads-- Congress Can Either Make It Better Or Ruin It

On January-- FDR's birthday-- John Larson (D-CT) introduced the Social Security 2100 Act (H.R.860), currently wending its way through Congress. The relevant committees doing hearings on it are House Ways and Means, Education and Welfare and Energy and Commerce. I'm told it will probably get voted on next month. If it passes the House (it will) and Senate (sketchy) and is signed by Trump (sketchier yet), the 63 million Americans who currently receive Social Security checks-- not to mention everyone else who will receive Social Security checks in the future-- will see increased benefits. The bill also guarantees that cost of living adjustments are more accurate and less likely to allow buying power of Social Security checks to be eroded by inflation. The new legislation also guarantees that Social Security is solvent for the rest of the 21st Century.

At the behest of scumbag billionaires, Republicans and conservative Democrats have made sure that Congress has been unable to add new protections and increases in benefits for over half a century. In the run-up to the 2018 midterms, a PPP survey found that 66% of voters said that they were more likely to back candidates who support "expanding and increasing Social Security benefits." Two years earlier a poll by Pew Research found that even Trump supporters overwhelmingly agreed that Social Security benefits should not be decreased. And except for neo-liberal Status Quo Joe, all the Democratic presidential candidates have pledged to support expanding Social Security, not just Bernie and Elizabeth Warren, but also Beto, Kamala Harris, Kirsten Gillibrand, Cory Booker, etc.

In February the Motley Fool weighed in on this as well, pointing out that "Although Social Security is currently keeping more than 22 million people out of poverty, its ability to provide a financial foundation for retired workers, the long-term disabled, and the survivors of deceased workers could soon be compromised. According to the 2018 report from the Social Security Board of Trustees, ongoing demographic changes that include the retirement of baby boomers, increased longevity over many decades, growing income inequality, and lower recent fertility rates will push the program from generating net cash surpluses to net cash outflows very soon. The good news is that there's nearly $2.9 trillion in asset reserves to help counteract these outflows for a period of time. However, by 2034, the entirety of this $2.9 trillion in excess cash is projected to be gone... With no excess assets, Social Security would be forced to reduce its monthly payouts to eligible beneficiaries by as much as 21% between 2034 and 2092, assuming Congress fails to raise additional revenue or cut expenditures. On a total dollar basis, the Trustees estimate the program will run a $13.2 trillion deficit between 2034 and 2092-- a deficit that's widening each year it's not dealt with."

The Social Security 2100 Act aims to raise revenue such that no benefit cuts need to be made over the long term (i.e., the next 75 years). It also intends to expand benefits for current and future beneficiaries. According to Chief Actuary Stephen Goss, the estimated $13.2 trillion budget deficit between 2034 and 2092 would be replaced by a $2.1 trillion net surplus-- a $15.3 trillion swing.

[T]he Social Security Act does everything you'd want to see a proposal do. It ensures that benefits aren't cut for current or future retirees, expands benefits for those at the lowest rung of the income ladder, and helps to simplify the program. With more than 200 co-sponsors of the bill in the House, only 218 votes needed for passage, and Rep. Larson set to become chairman of the Ways and Means subcommittee on Social Security, passage of the Social Security 2100 Act in the House appears quite possible.

But there's just one problem: A bill needs to pass both houses of Congress and affix a president's signature (in most cases) to become law.

The Senate is still under control of the Republican Party, which frankly views a solution to Social Security's imminent cash crunch differently. Rather than increasing or amending the payroll tax cap, the GOP prefers gradually raising the full retirement age to account for increased longevity.

Your full retirement age is the age at which you become eligible to receive your full monthly payout, as determined by your birth year. Currently set to peak at age 67 for those born in 1960 or later, Republicans have proposed gradually increasing this to as high as age 70. This would require future generations of workers to wait longer to receive their full benefit or to accept a steeper monthly payout reduction by claiming earlier. Either way, it reduces lifetime benefit payouts, thereby saving the program money.

Republicans also prefer the Chained CPI as a measure of inflation, rather than the CPI-E. The Chained CPI, which is already being indexed to federal income tax brackets and credits, takes into account the idea of substitution bias. If, for instance, the price of one good, say ground beef, has risen sharply in price, the Chained CPI assumes that consumers will trade down to less-costly but similar food, such as chicken or pork. If the Chained CPI were implemented, lower COLAs would likely ensue, also saving the program money over the long run.

There are no House Republican co-sponsors for the Bill so far, but will they all vote against it? Republicans don't like that wealthy wage earners will be forced to pay their fair share. FICA will apply to wages up to $400,000 instead of the current $132,900. According to Nancy Altman at SocialSecurity Works, the current FICA rate (6.2%) will increase by .05% a year-- 50 cents a week for an average worker-- until it reaches 7.4%.

There are now 203 co-sponsors out of 235 Democrats in Congress. Want to guess who the 32 Democrats are who don't support strengthening and expanding Social Security? As always, the first place to look is at the Republican wing of the Democratic Party-- the New Dems and Blue Dogs, many of whom also refused to get behind the minimum wage increase. So let's start with the worst garbage in the freshman class-- an even dozen of 'em:

• Joe Cunningham (Blue Dog-SC)
• Ben McAdams (Blue Dog-UT)
• Jeff Van Drew (Blue Dog-NJ)
• Anthony Brindisi (Blue Dog-NY)
• Xochitl Torres-Small (Blue Dog-NM)
• Antonio Delgado (New Dem-NY)
• Cindy Axne (New Dem-IA)
• Abigail Spanberger (Blue Dog-VA)
• Mikie Sherrill (Blue Dog-NJ)
• Elaine Luria (New Dem-VA)
• Max Rose (Blue Dog-NY)
• Abby Finkenauer (IA)

And here are all the usual suspects-- or some of them anyway, again, a dozen of 'em-- who have refused to sign on. Do they think their voters don't like Social Security? They must be insane:

• Dan Lipinski (Blue Dog-IL)
• Josh Gottheimer (Blue Dog-NJ)
• Jim Costa (Blue Dog-CA)
• Tom O'Halleran (Blue Dog-AZ)
• Stephanie Murphy (Blue Dog-FL)
• Scott Peters (New Dem-CA)
• Brad Schneider (Blue Dog-IL)
• Jim Cooper (Blue Dog-TN)
• Charlie Crist (Blue Dog-FL)
• Kurt Schrader (Blue Dog-OR)
• Ron Kind (New Dem-WI)
• Steny Hoyer (MD)