Deutch, Hirono Reintroduce Bill to Strengthen, Expand Social Security
Today, Congressman Ted Deutch (FL-22) and Senator Mazie K. Hirono (D-HI) reintroduced the "Protecting and Preserving Social Security Act," legislation to strengthen Social Security and guarantee its solvency for generations to come by restoring fairness to Social Security contributions.
The "Protecting and Preserving Social Security Act" would phase out the contributions cap over seven years until everyone pay into Social Security at the same rate all year long. Most Americans contribute 6.2% of their paychecks to Social Security. However, high-income earners stop paying into Social Security once they've hit the annual contributions cap, which in 2019 is $132,900. According to Center for Economic and Policy Research estimates, Americans earning over $500,000, will get a huge tax break starting on April 8, 2019 when they stop contributing to Social Security for the year.
This legislation would also fix the way cost-of-living adjustments are calculated. Currently, those adjustments are made based on the Consumer Price Index for workers (CPI-W). However, costs for seniors rise faster than for working Americans as they spend more of their income on medical care, prescription drugs, energy costs, and other growing expenses. This legislation replaces the CPI-W with the CPI-E, a metric created by the Bureau of Labor Statistics to accurately measure the costs incurred by elderly Americans.
"Social Security remains one of the most important programs for about 63 million Americans, including most American seniors who depend on it as their main source of income. But this crucial source of income for Americans has not kept up with their rising costs and is on track to dry up completely by 2034," said Congressman Deutch. "Rather than chip away at the program, we're proposing a way to strengthen this pillar of retirement security and disability assistance by making sure all Americans, including those top income earners in our country, pay the same rate into Social Security. The cap will give the highest income earners—those who make over $500,000 per year—a big tax cut this week when they stop paying Social Security taxes. The rate most Americans pay into Social Security is 6.2 percent. But for people who make $500,000, their effective rate is only 1.6 percent. By scrapping the cap we can ensure all Americans contribute their fair share to retirement security and disability benefits for one another."
“For many seniors living in Hawaii on fixed incomes, Social Security benefits have not gone far enough to help them make ends meet and have not kept pace with the rising costs of consumer goods,” Senator Hirono said. “Social Security is the cornerstone of retirement and a safety net for millions of families who rely on the program every day to survive. I am proud to join Congressman Deutch in reintroducing this legislation as we continue our fight to strengthen and improve Social Security and to ensure that seniors and others who rely on this critical program receive the benefits they deserve.”
The House bill was introduced with Congressman John P. Sarbanes (MD-03), Congressman David Cicilline (RI-01), and Congressman Alcee L. Hastings (FL-20). In the Senate, the bill was introduced with Senators Tina Smith (D-MN) and Kirsten Gillibrand (D-NY).
The annual Trustees Report provided a detailed overview of the financial outlook for Social Security’s combined Old-Age, Survivors, and Disability Insurance (OASDI) Trust Funds in the coming years, and further indicated that the Trust Funds have substantial surpluses that should fully cover administrative costs and benefits for seniors, individuals with disabilities, and survivors of deceased beneficiaries until 2034—the same year as previously indicated in 2017. SSA had previously estimated that the Protecting and Preserving Social Security Act would strengthen the program by covering these costs and benefits for an additional 25 years, until 2059—further strengthening the basic safety net for millions of Americans, including many of those who have worked hard for their entire lives.
Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare: “On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am pleased to endorse the “protecting and Preserving Social Security Act,” that would ensure a livable retirement for more Americans. By adopting the Consumer Price Index for the Elderly to determine cost-of-living adjustments, the bill assures that the purchasing power of benefits is maintained as beneficiaries age. And, this legislation improves Social Security’s financing for decades by requiring all Americans to contribute their fair share to the program by lifting the cap on Social Security payroll taxes. The National Committee applauds Congressman Ted Deutch and Senator Maize Hirono’s leadership in strengthening Social Security and look forward to working with to enact this important legislation.”
Richard Fiesta, Executive Director, Alliance for Retired Americans: "The 'Protecting and Preserving Social Security Act' will significantly improve the way that Social Security Cost of Living Adjustments are calculated to more accurately reflect the goods and services seniors,' said Richard Fiesta, Executive Director of the Alliance for Retired Americans. "It will also extend the solvency of the trust fund until 2053 by requiring wealthy Americans pay their fair share into the Social Security system. On behalf of our 4.4 million retiree members, we commend Rep. Deutch and Sen. Hirono for their leadership on this critical issue. We also thank them for their 100% lifetime pro-retiree scores in the Alliance's annual Congressional Voting Record."
Nancy Altman, President of Social Security Works and Chair of the Strengthen Social Security Coalition: "Senator Hirono and Representative Deutch are Social Security champions. Their bill, the Protecting and Preserving Social Security Act, ensures that Social Security's vital but modest benefits do not erode over time by enacting an improved formula for cost of living adjustments that reflects the real expenses beneficiaries face every day. Moreover, it restores Social Security to long-range actuarial balance by requiring that higher-paid workers pay their fair share. Under current law, those making over $500,000 a year will not be paying a single penny into Social Security the rest of the year. Under this bill, they will pay in all year long just like the rest of us. This legislation is both common sense and extremely wise."