Two bills, one each in the Senate and one in the House, would expand Social Security benefits for Americans. This idea seemed like a long shot when they were introduced in 2019, but the political landscape has changed and now Democrats are in control of the U.S. House of Representatives, the U.S. Senate and the White House.
Many Democrats have advocated to not only protect Social Security benefits, but to expand them. Considering we are in the middle of the COVID-19 pandemic Social Security legislation is probably not the top priority for legislators, but over the next couple years it is possible some sort of bill will be passed that would address Social Security’s issues. Below are summaries of the two bills that have previously been introduced in each legislative chamber.
Social Security 2100 Act (U.S. House of Representatives)
This bill increases various Old Age, Survivors, and Disability Insurance (OASDI) benefits and related taxes.
The bill increases the primary insurance amount (e.g., the amount a Social Security beneficiary receives if the beneficiary begins receiving benefits at normal retirement age) by increasing the percentage of the beneficiary’s average indexed monthly earnings used to calculate the amount.
The Bureau of Labor Statistics shall publish a Consumer Price Index for Elderly Consumers, which the Social Security Administration (SSA) shall use to calculate cost-of-living adjustments to benefits. Currently, the SSA uses a price index for wage earners to make such adjustments.
The bill increases the minimum benefit amount for individuals who worked for more than 10 years by creating an alternative minimum benefit. A qualifying beneficiary shall receive that alternative minimum if it is higher than the standard calculated benefit amount.
The bill increases the income threshold that a beneficiary must reach before Social Security benefits are taxable.
Increased benefits from this bill shall not count as income when determining an individual’s eligibility or benefit amounts for (1) Medicaid, (2) the Children’s Health Insurance Program, or (3) the Supplemental Security Income program.
Income above $400,000 shall be included when calculating Social Security benefits and taxes. The bill also increases rates for the payroll and self-employment taxes that fund OASDI.
The bill establishes the Social Security Trust Fund, which replaces the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund.
Social Security Expansion Act (U.S. Senate)
The legislation would increase benefits by about $1,342 a year for seniors now making less than $16,000 annually and increase cost-of-living adjustments by more accurately measuring the spending patterns of seniors.
The bill would ensure that Social Security could pay every benefit owed to every eligible American for the next 52 years, according to the retirement system’s chief actuary. It would extend the program’s solvency by making the wealthiest 1.8 percent of Americans – those with incomes of more than $250,000 a year – pay the same rate into the retirement system as everyone else already pays. Current law caps the amount of income subject to payroll taxes at $132,900.
