From Forbes:
Increasing Social Security benefits for widows can get enough support from both parties in Congress to become law, House Ways & Means Committee Social Security Subcommittee lead Republican Tom Reed said Wednesday.
Stressing the need for an increase at a subcommittee hearing, the New York Congressman said the current system risks putting new widows in poverty by cutting their families’ Social Security payments by a third to a half.
The Democratic proposal is for a general increase in benefits. Their bill would also increase taxes.“Increasing the Social Security survivor’s benefit to 75 percent of the couple’s prior benefit could prevent hardship at a reasonable cost to the program,” said conservative think tank retirement expert Andrew Biggs. ...
The Democratic proposal described in the linked article would not increase benefits very much. The rate below the first bend point (currently $926) goes from 90% to 93%, which would increase benefits at full retirement age for most people by $28 per month. There would be a slightly higher COLA each year, due to the use of CPI-E (maybe 0.2% per year). Probably the biggest effect would be on the taxation of Social Security benefits, which would decrease income taxes for many people with income other than Social Security. I think that most of the increase in taxes is not for these increases, but to deal with the projected revenue shortfall that is expected even with current benefits.
ReplyDeleteI'm just happy if the two parties are arguing over 2 plans to raise benefits rather than trying to lower them.
Republicans will propose to pay for their small benefit increases for lower income workers and survivors with significant benefit cuts for higher earners. How far down the income scale they will have to go (i.e. how will they define “high earner”) with cuts to pay for the increases AND achieve long-range solvency is the key question. R’s show no signs of being willing to accept any revenue increases.
ReplyDeleteEverybody loves to help widows. But where's the money to pay for this? Need to see the actual proposal.
ReplyDeleteIf Andrew Biggs likes it, examine it carefully. Just saying. He's no friend of the program.
ReplyDeleteThe survivor benefit change better reflects reality. Since 1997 the greatest inflation categories impacting retirees have been hospital, doctors, medication then housing and food. Hard goods like TVs, computers, phones, clothes, and cars have been flat or actually dropped in spending power required.
ReplyDeleteThe typical couple has survived those increases by pooling income. The 50% cut takes big hit.
@5:56
ReplyDeleteTaxes, cutting spending elsewhere, or deficit spending are pretty much the only options in budgeting for any government program, so it would be one of those.
As to whether the actual proposal will address which of these options are used, I doubt it. Nothing requires an individual bill to contain funding language. I think it most likely that Congress will just use the general budget process to fund any program expansions. That said, the proposal linked does support an increase in the payroll tax cap to $400,000 from $132,900, and raising the tax from 6.2% to 7.4% starting in 2020, with the increase being gradual, ending in 2043. But again, I expect if the changes are enacted, the actual funding would be made months later, in the budgeting process.
My last job paid $90,000/ year and yet my benefit is less than $2000 a month...WHY DON'T THEY INCREASE MINE TO 75% of my former take home pay?
ReplyDeleteThe word widow has no meaning for me, because I NEVER got the chance to get married...POLITICIANS do whatever makes them look good and they all make me sick.