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| Representative Larson |
• Benefit bump for current and new beneficiaries – Provides an increase for all beneficiaries that is the equivalent to about 2% of the average benefit. The US faces a retirement crisis and a modest boost in benefits strengthens the one leg of the retirement system that is universal and the most reliable.
• Protection against inflation – Improves the annual cost-of-living adjustment (COLA) formula to better reflect the costs incurred by seniors through adopting a CPI-E formula. This provision will help seniors who spend a greater portion of their income on health care and other necessities. Improved inflation protection will especially help older retirees and widows who are more likely to rely on Social Security benefits as they age.
• Protects low-income workers – No one who paid into the system over a lifetime should retire into poverty. The new minimum benefit will be set at 25% above the poverty line and would be tied to wage levels to ensure that the minimum benefit does not fall behind.
• Improves benefits for widows and widowers in two income households
• Repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) that currently penalize many public servants.
• Ends the 5-month waiting period to receive disability benefits.
• Provides caregiver credits to ensure that caregivers are not penalized in retirement for taking time out of the workforce to care for children or other dependents.
• Extends benefits for students through age 22.
• Increases access to benefits for children who live with grandparents or other relatives.
• Have millionaires and billionaires pay the same rate as everyone else – Presently, payroll taxes are not collected on wages over $142,800. This legislation would apply the payroll tax to wages above $400,000. This provision would only affect the top 0.4% of wage earners.
• Extends the depletion date (when a 20% cut to benefits would occur) to 2038 – Giving Congress more time to ensure long term solvency of the Trust Funds.
• Social Security Trust Fund Established – Social Security provides all-in-one retirement, survivor, and disability benefits funded through the dedicated FICA contribution paid by workers. There are technically two trust funds, Old-Age and Survivors (OASI) and Disability Insurance (DI), and that are usually referred to as the Social Security Trust Fund. This provision combines the OASI & DI trust funds into one Social Security Trust Fund, to ensure that all benefits will be paid.
There is no path to passage of this bill in the current Congress. It's not clear this would pass even in the House of Representatives. Senate Republicans would use the filibuster to prevent debate on the bill. Because of opposition from Senators Manchin and Sinema, Democrats lack a majority to do anything about the filibuster. Anything having to do with Title II of the Social Security Act is off limits under the budget reconciliation process.
One aspect of the bill not summarized above could have some real world consequences in the near term. Representative Larson's bill would do something about the fee cap that is slowly choking attorneys who represent Social Security claimants. The Acting Commissioner of Social Security can raise the fee cap by a simple notice in the Federal Register. No legislation is needed. I believe this bill is the first time that Larson has come out in support of raising the fee cap. Generally, Social Security Subcommittee Chairs have considerable influence at Social Security. However, Larson has seemed so disengaged from his Subcommittee's responsibilities, I don't know how much influence he has at the agency.
SSA already paid benefits to students up until the early/mid 1980s. What a disaster! Many were overpaid because they didn't tell SSA when they dropped out of school or cut back to less than full time.
ReplyDeleteBillionaire/millionaire tax==how many of those will just not take salary that is subject to SSA taxes? Some may have no choice but I doubt that will be a big money maker.
Repeal WEP and GPO because it's fair that someone who works as a teacher and draws say a $5K per month pension is paid the same spouse's/widow's benefits at another person who stayed home to take care of their family. WEP and GPO are actually very fair.
Protect low income workers..like teachers and firemen who have part time jobs that pay $10K a year so they won't have their benefit reduced due to WEP and will actually get a big bump in their benefits, same as other workers who work part time. Low income workers already receive a large bonus, getting up to 90% of their average indexed monthly earnings vs more like 40% for higher income workers.
This would all be much more reasonable if SSA had been put on solid ground years ago and the date for running out of money was way far in the future instead of the next decade.
I'd argue but I won't...you have too many facts in you post, lol.
Delete@8:55
ReplyDelete1. Okay so have student benefits go directly to the school, like federal student loans already do. If the school doesn't report a change by the student, social security takes the money back from the school's coffers. Problem solved.
2. Meh, billionaires/millionaires already do avoid taxes by foregoing a salary if able. I don't see an exceptionally minor new tax threat to change that behavior. Those that do take a salary usually are in an industry that can't as easily choose to forego a salary (actors, athletes, very high end doctors/lawyers, etc.)
3. I don't have an issue with teachers getting paid more and don't see why any person with a decent sense of morality would either.
4. We should raise the first bend point from 90% to 120%.
5. Social security is on solid ground and the absurd talking point from both sides that it will be insolvent any time in the future has been proven false. I recall the first time I heard of the insolvency issue, it was supposed to fail in 2018. It goes back and forth by 1-2 years, each year, but people only remember the headlines.
I see nothing in this bill that anyone should complain about. What is going to happen if this bill does not pass?
ReplyDeleteSome bill has to pass before it is too late. A 20% cut would find me in a tent, and I am not kidding.
The US Government started this program, and it is broken so they must fix it, or millions of people are going to be in really bad shape.
@1118--Student benefits are not for tuition but for basics like housing, food, etc. Paying those to the school makes no sense at all.
ReplyDeleteRe teachers--it's not just teachers, it's anyone who didn't pay into SSA reaping benefits that they don't deserve. WEP and GPO keep SSA funds from going to the middle class who didn't pay in (paid into state, county, fed pensions only) so that those who actually didn't work much receive their fair share.
@555 Raise the percentage 1% that each person is taxed to keep it solvent. Less workers now than before so they have to pay more to support SSA.
When the financing is fixed so at least as much comes in as goes out, may think about revising the system to pay more out.
One can argue that WEP is a key defense against paying a workers who appears to be a low SSA wage earner when they aren't. OK, fair enough.
ReplyDeleteThe issue is more with GPO. It appears when a mixed couple (one who is hit by WEP and a spouse who isn't) has a death. The receipt of the gov pension often zeros out any SSA payment to the surviving spouse. Had the gov pension been instead a private pension, GPO doesn't apply. Many state employees have no choice in how their employer structures their pay and pension, and don't pay FICA. So GPO makes a lie of the idea of "survivor" benefits as part of the SSA package and often the result is a family/widow/widower losing a partner and a lot of income. Primarily because of the source of their own pension.
It's draconian. It can and should be fixed.
The benefit enhancements would apply only for 5 years (2022-2026)
ReplyDeletehttps://larson.house.gov/sites/larson.house.gov/files/Section%20by%20section%20Social%20Security%202100%20FINAL%2010.25.21.pdf
https://www.ssa.gov/oact/solvency/JLarson_20211026.pdf
Avoiding political commentary....
ReplyDeleteElimination of WEP/GPO would remove over one-third of the claims specialist workloads in regional PSCs (excluding ODO). WEP is cheap and efficient to implement, and consistent. GPO is more costly to maintain with frequent updating, but provides significant trust savings. However, the proposed law provides relief for ONLY a 5 year period, so it is more of a temporary relief which means a huge nightmare for its re-application after the 5 year period expires.
All benefit increases are ONLY for a 5 year period and drop off afterwards.
Having seen many famed millionaire records (only 1 billionaire I can recall), most of their income comes from outside covered earnings and did not appear on their earnings record. Thus, a projection of only 1.95% gain for the trusts paying all this means any changes are bound to be limited, temporary are less enticing that what the talking points say.
More details on the proposals are at
https://www.ssa.gov/OACT/solvency/JLarson_20211026.pdf
@834--Had the govt pension been a private one, the person would have been paying into SSA and would be eligible/receiving retirement or disability benefits, no? And if their monthly benefit was say $1500 and the deceased spouse's amount was $2000, they would only get $500 per month more, assuming no reduction for age. If the amounts were reversed, the survivor would receive no benefits other than the LSDP and their private pension. Most pensions from state/county and even the federal govt are larger than any SSA benefit so they are better off that they get their pension rather than had they paid into SSA instead and they had to rely on that for their sole benefit.
ReplyDeleteMaybe an example will help--1) worker dies that is receiving $2500 SSA benefit. His spouse who did not work enough to receive retirement receives his full $2500 survivor benefit. Same worker with $2500 benefit dies but his spouse had a good job and receives $2000 in retirement. Spouse would get the difference of $500 in survivor benefits for a total of $2500. 3-Same worker dies but spouse had a govt job and did not pay into SSA. Spouse has pension of $5000 per month because spouse had a very good job, the same as the person in the prior example but this spouse receives much more in private pension than the other did in SSA benefit. Under GPO, this spouse would get nothing (although he/she would qualify for free Part A of medicare). Without GPO, this spouse who is already getting $5K govt pension would get $2500 more from SSA. This spouse is not reduced for their $2000 in SSA benefits because they did not pay into SSA and instead receive a larger govt pension.
GPO is very fair as shown in these examples.
SSA stopped paying benefits to college students around 1983 and it was a complicated mess with "phase out students", their benefits being reduced by 25% per year until they no longer qualified.
ReplyDeleteAnd how many billions of taxpayers money would go down the drain if SSA paid college students again, and ended the 5 month waiting period?
We should be looking for ways to help the trust fund. SSA should stop recognizing the phony "life expectancy" clauses which are now routinely added to huge lump sum workers' compensation awards. The clauses are added for the purpose of avoiding offset of SSA dib benefits, and they achieve that goal, costing taxpayers untold millions each year.
Re: Anonymous @ 8:55 AM, October 27
ReplyDeleteStudent benefits are "a disaster" due to overpayments? As a person whose father died when he was 12, SS was what enabled me to go to college. If you think this program is a disaster, then why should we allow legal on-street parking? I mean, this enables illegal parking, which is another "disaster", right?
As for WEP/GPO: Fix the problems, yes. But make SS open-season for benefits where you didn't pay in? Remember that SS is a "social contract with America" as described by FDR. Your benefit is proportional to your contribution. You want to make it some form of welfare? Then it becomes an entitlement, and that takes away all sense of proportion and incentive.
1:23 - you got "entitlement" backward. SSA benefits are an entitlement. SSI is something one can qualify for, but is not entitled to. If you paid into the FICA tax system and had your quarters, you are entitled to those SSA benefits.
ReplyDelete2:21 - you assume all government pensions are large. Your assumption is wrong. For example, the average Texas teacher pension is not enough to live off of. And those who work less than 20 years are most at risk to have small pensions. But large enough to zero out or close to zero out survivor benefits, resulting in a huge income hit when a spouse dies.
You may poo poo the idea but it is an issue. Admit these are spotlighted but they do rebut the presumptions made that all persons getting a government pension are living fat off the land.
https://ssfairness.org/gpo-wep-hardship-stories/
@258. I read some of those hardship stories. You could find many more that don't involve WEP or GPO. Married couple where both worked. One received $2500 SSA and the other $2000. When one dies the survivor will only get $2500. That's the way it works for everyone. Apparently you'd like government workers to not suffer that same fate. That would have to be due to a large SSA tax hike.
ReplyDeleteRe small pensions, change GPO and WEP to exclude the first $1000 per month in pensions. That would limit the damage to low pension people while not allowing the others to profit.