Problems For Social Security 2100 Act in CBO Projections

     The Congressional Budget Office (CBO) has analyzed the effects of the Social Security 2100 Act currently pending before the House Ways and Means Committee. They find that it doesn't quite stabilize the Social Security Trust Funds until the year 2100 as the bill's sponsors have believed. More important, the CBO finds that along the way the bill would cause the Trust Funds to run out of money in 2041. In other words, in the long run if the bill would be adopted would come pretty close to solving the funding problem but there would be a crisis in 2041. This conflicts with the projections of Social Security's Office of Chief Actuary that under the bill the Trust Funds would be fully solvent until at least the year 2100.

     I think the Trust Fund problem- brought up by the CBO could probably be addressed fairly simply by modestly speeding up the tax increase included in the Social Security 2100 Act.

     Another problem, though, is that while the CBO projects that the bill would decrease the overall federal deficit, it would increase on-budget deficits by hundreds of billions of dollars in each decade "because a portion of income taxes paid on Social Security benefits would no longer be allocated to the Medicare Hospital Insurance (HI) trust fund (which is on-budget) and because of the reductions in income tax revenues that would result from the increase in payroll taxes." I don't understand this. My guess is that it's an conceptual problem in the byzantine world of federal budgeting rather than a real world problem.

Social Security 2100 Act To Get A Vote In House This Year?

     Rachel Greszler, research fellow at the Heritage Foundation, believes that the House of Representatives will take up the Social Security 2100 Act this fall. That bill would assure Social Security financing through the year 2100 and would increase benefits. It would also     increase the FICA tax, particularly on high income individuals. She predicts it will pass the House easily. Here’s another right wing source predicting it will come up in the House very soon. Of course, with Mitch McConnell as the Majority Leader there’s no way the Senate will take it up.
     By the way, I haven’t seen even one source with even a marginal alignment with Democrats warning that there’s some political danger for Democrats in voting for this. As scared of their own shadow as Democrats often are, I think that tells you something about the politics of this bill.

More On Tomorrow's Congressional Hearing On The Social Security 2100 Act

     Here's the list of witnesses for tomorrow's hearing before the House Social Security Subcommittee on the Social Security 2100 Act:

• Stephen C. Goss, Chief Actuary, Social Security Administration
• Nancy J. Altman, President Social Security Works
• Kelly Brozyna, Member, Job Creators Network’s National Women’s Coalition
• Abigail Zapote, Executive Director, Latinos for a Secure Retirement
• Shaun Castle, Deputy Executive Director, Paralyzed Veterans of America

     By the way, in case you're wondering whether this is a serious proposal that might move forward should Democrats actually control the White House and both houses of Congress after the next election, here's the list of the bill's cosponsors:

Mr. Larson of Connecticut for himself, Ms. Adams, Mr. Aguilar, Ms. Barragán, Ms. Bass, Mrs. Beatty, Mr. Bera, Mr. Beyer, Mr. Bishop of Georgia, Mr. Blumenauer, Ms. Blunt Rochester, Ms. Bonamici, Mr. Brendan F. Boyle of Pennsylvania, Ms. Brownley of California, Mr. Brown of Maryland, Mrs. Bustos, Mr. Butterfield, Mr. Carbajal, Mr. Cárdenas, Mr. Carson of Indiana, Mr. Cartwright, Mr. Case, Mr. Casten of Illinois, Ms. Castor of Florida, Mr. Castro of Texas, Ms. Judy Chu of California, Mr. Cicilline, Mr. Cisneros, Ms. Clark of Massachusetts, Ms. Clarke of New York, Mr. Clay, Mr. Cleaver, Mr. Clyburn, Mr. Cohen, Mr. Connolly, Mr. Correa, Mr. Courtney, Mr. Cox of California, Mrs. Craig, Mr. Crow, Mr. Cuellar, Mr. Cummings, Ms. Davids of Kansas, Mr. Danny K. Davis of Illinois, Mrs. Davis of California, Ms. Dean, Mr. DeFazio, Ms. DeGette, Ms. DeLauro, Ms. DelBene, Mrs. Demings, Mr. DeSaulnier, Mr. Deutch, Mrs. Dingell, Mr. Doggett, Mr. Michael F. Doyle of Pennsylvania, Mr. Engel, Ms. Escobar, Ms. Eshoo, Mr. Espaillat, Mr. Evans, Mr. Foster, Ms. Frankel, Ms. Fudge, Ms. Gabbard, Mr. Gallego, Mr. García of Illinois, Ms. Garcia of Texas, Mr. Garamendi, Mr. Golden, Mr. Gomez, Mr. Gonzalez of Texas, Mr. Green of Texas, Mr. Grijalva, Ms. Haaland, Mr. Hastings, Mrs. Hayes, Mr. Heck, Mr. Higgins of New York, Ms. Hill of California, Mr. Himes, Ms. Kendra S. Horn of Oklahoma, Mr. Horsford, Ms. Houlahan, Mr. Huffman, Ms. Jackson Lee, Ms. Jayapal, Mr. Jeffries, Ms. Johnson of Texas, Mr. Johnson of Georgia, Ms. Kaptur, Mr. Keating, Ms. Kelly of Illinois, Mr. Kennedy, Mr. Khanna, Mr. Kildee, Mr. Kilmer, Mr. Kim, Mrs. Kirkpatrick, Ms. Kuster of New Hampshire, Mr. Lamb, Mr. Langevin, Mr. Larsen of Washington, Mrs. Lawrence, Mr. Lawson of Florida, Ms. Lee of California, Mr. Levin of Michigan, Mr. Levin of California, Mr. Lewis, Mr. Ted Lieu of California, Ms. Lofgren, Mr. Lowenthal, Mr. Luján, Mr. Lynch, Mr. Malinowski, Mrs. Carolyn B. Maloney of New York, Mr. Sean Patrick Maloney of New York, Ms. Matsui, Ms. McCollum, Mr. McEachin, Mr. McGovern, Mr. McNerney, Mr. Meeks, Ms. Meng, Ms. Moore, Mr. Morelle, Mr. Moulton, Ms. Mucarsel-Powell, Mr. Nadler, Mrs. Napolitano, Mr. Neal, Mr. Neguse, Mr. Norcross, Ms. Norton, Ms. Ocasio-Cortez, Ms. Omar, Mr. Pallone, Mr. Panetta, Mr. Pappas, Mr. Pascrell, Mr. Payne, Mr. Perlmutter, Mr. Peterson, Ms. Pingree, Ms. Plaskett, Mr. Pocan, Ms. Porter, Ms. Pressley, Mr. Price of North Carolina, Mr. Quigley, Mr. Raskin, Miss Rice of New York, Mr. Richmond, Mr. Rouda, Ms. Roybal-Allard, Mr. Ruiz, Mr. Ruppersberger, Mr. Rush, Mr. Ryan, Mr. Sablan, Ms. Sánchez, Mr. Sarbanes, Ms. Scanlon, Ms. Schakowsky, Mr. Schiff, Ms. Schrier, Mr. Scott of Virginia, Mr. David Scott of Georgia, Mr. Serrano, Ms. Sewell of Alabama, Ms. Shalala, Mr. Sherman, Mr. Sires, Mr. Smith of Washington, Mr. Soto, Mr. Suozzi, Ms. Speier, Mr. Stanton, Ms. Stevens, Mr. Swalwell of California, Mr. Takano, Mr. Thompson of Mississippi, Mr. Thompson of California, Ms. Titus, Ms. Tlaib, Mr. Tonko, Mrs. Torres of California, Mrs. Trahan, Mr. Trone, Ms. Underwood, Mr. Vargas, Mr. Veasey, Mr. Vela, Ms. Velázquez, Ms. Wasserman Schultz, Ms. Waters, Mrs. Watson Coleman, Mr. Welch, Ms. Wexton, Ms. Wild, Ms. Wilson of Florida, and Mr. Yarmuth

Legislative Hearing On Social Security 2100 Act

     The House Social Security Subcommittee has scheduled a legislative hearing on the Social Security 2100 Act for July 25. I don't know what a "legislative hearing" is. Apparently, this isn't a markup session where Subcommittee members approve the final language of a bill. Will the Subcommittee be hearing from members of Congress who aren't on the Subcommittee?

     This bill won't be enacted in this Congress. It may never make it out of the full Ways and Means Committee and it will certainly won't get a vote in the Senate. This is about setting a Democratic agenda for the future, especially if Democrats gain the White House and Senate after the 2020 election.

    Here's a summary of the Social Security 2100 Act from the Chairman of the Subcommittee, John Larson of Connecticut:

• Benefit bump for current and new beneficiaries – Provides an increase for all beneficiaries that is the equivalent of 2% of the average benefit. The United States faces a retirement crisis and a modest boost in Social Security benefits strengthens the one leg of the retirement system that that is universal and the most reliable. [Sec. 101]

• 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.  [Sec. 102]

• Protect 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.  [Sec. 103]

• Cut taxes for beneficiaries – Over 12 million Social Security recipients would see a tax cut[ii].  Presently, your Social Security benefits are taxed if you have non-Social Security income exceeding $25,000 for an individual or $32,000 for couples.  This would raise that threshold to $50,000 and $100,000 respectively. [Sec. 104]

• Holding SSI, Medicaid, and CHIP Beneficiaries Harmless – Ensures that any increase in benefits from the bill do not result in a reduction in SSI benefits or loss of eligibility for Medicaid or CHIP. [Sec. 105]

• Have millionaires and billionaires pay the same rate as everyone else – Presently, payroll taxes are not collected on wages over $132,900. This legislation would apply the payroll tax to wages above $400,000.  This provision would only affect the top 0.4% of wage earners. [Sec. 201, 202]

• 50 cents per week to keep the system solvent – Gradually phase in an increase in the contribution rate beginning in 2020 so that by 2043, workers and employers would pay 7.4% instead of 6.2% today. For the average worker this would mean paying an additional 50 cents per week every year to keep the system solvent. [Sec. 203]

• 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.  [Sec. 204]