How President Biden may assist provoke modifications in social safety

United States President Joe Biden speaks about his administration’s plans to fight the coronavirus disease (COVID-19) pandemic during a COVID-19 response event at the White House in Washington on January 21, 2021.

Jonathan Ernst | Reuters

Newly-elected President Joe Biden has a large list of priorities in his early days in office, including the pandemic chief.

However, experts expect that an issue he addressed during his campaign, social security reform, could become a focus as early as this year.

Millions of Americans count on Social Security benefits to generate income when they are retired, disabled, or when loved ones die.

The program is running out of funds. The latest official estimate by the Social Security Agency shows that in 2035 only 79% of promised benefits will be due due to trust fund depletion. That estimate doesn’t take into account the impact of the pandemic, which experts say could postpone that date even earlier.

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Biden announced major changes to the program on the Campaign Path.

Under his plan, eligible workers would receive a minimum guaranteed benefit equal to at least 125% of federal poverty. People who have had benefits for at least 20 years will get a 5% bump. Widows and widowers would receive about 20% more per month.

Biden also suggests changing the measurement of annual cost of living increases to the Consumer Price Index for Older People (CPI-E) to better capture the cost of retirees.

To pay for these higher benefits, Biden would apply social security taxes to those earning $ 400,000 and above. In 2021, workers will generally pay 6.2% Social Security tax on wages up to $ 142,800. (Revenues between $ 142,800 and $ 400,000 would not be subject to the plan’s levies, although that void would fill over time.)

Other Democratic candidates ahead of the 2020 presidential election also issued their own ideas for social security reform. The last time major changes were made was in 1983 when Republican Ronald Reagan signed a deal with Democratic House Speaker Tip O’Neill, D-Mass.

“I’ve always believed that social security reform needed a Democratic president,” said Jason Fichtner, a fellow at the Bipartisan Policy Center and a former social security administration officer.

Since 78-year-old Biden has hinted from the start that he wants to be a president for a term, he would have to deal with the issue in the next few years.

“I hope that President Biden will try at least after the interim periods in 2022 to 2023 to secure a legacy, and that would be a reform of social security,” said Fichtner.

What changes could come in 2021?

zimmytws | iStock | Getty Images

Experts believe that social security will be on the legislature’s agenda this year.

The Covid-19 pandemic created what is known as a tier that would decrease benefits for those who turn 62 and apply for retirement benefits in 2022, as well as those who apply for disability or survivor benefits that year.

Congress is expected to take action to prevent these cuts before they go into effect.

Since these benefit cuts were directly caused by Covid-19, this could be addressed in the next relief package, said Dan Adcock, director of government relations and policies for the National Committee for the Maintenance of Social Security and Medical Care.

“I think this is the most likely early social security measure,” Adcock said.

If reduced benefits for this cohort are not included in upcoming legislation, lawmakers could consider doing so later in the year, which could lead to bigger talks on social security reform, said Nancy Altman, president of Social Security Works, facing up campaigns for an expansion of social security.

“If this is not included in the Covid package, it would make sense to do so in a comprehensive social security package that gives the impetus to respond in the coming year,” Altman said.

Room for compromise?

(LR) U.S. Senate Minority Leader Chuck Schumer (D-NY) watches as Majority Leader Mitch McConnell (R-KY) speaks during a gold medal ceremony at the U.S. Capitol on January 15, 2020 in Washington, DC.

Drew Angerer | Getty Images

Despite a Democratic majority in the House and Senate, there could be obstacles to the approval of a comprehensive social security reform.

Democrats have proposed their own laws to prop up the program. The Social Security Act 2100, proposed by Rep. John Larson, D-Conn., Aims to increase benefits and restore the program’s solvency for the next 75 years by increasing wage taxes.

Another proposal, the Social Security Enlargement Act by Senator Bernie Sanders, I-Vt., Also aims to increase benefits for low-paid workers while increasing taxes for those on higher wages.

In a statement, Larson said the Biden administration and members of the Senate and House of Representatives are trying to reach consensus by holding discussion boards and evaluating various proposals.

“There are many similarities between the Social Security Act 2100 and President Biden’s campaign proposal,” said Larson. “We will reintroduce a modified Social Security Act 2100 based on the results of these discussions.”

On the Republican side, Senator Mitt Romney, R-Utah, has touted the TRUST bill, which would allow lawmakers to set up bipartisan committees to address funding shortages such as Social Security and to expedite changes .

Traditional Senate negotiations, however, would require cross-party support.

It’s America’s most popular entitlement program, and part of the reason it’s so popular is that it’s not solvent.

Rachel Greszler

Research Associate at the Heritage Foundation

“It will need 60 votes in the Senate, which means we will likely have to convince at least 10 Republican senators to join a comprehensive bill to reform social security,” Adcock said.

Conservative politicians would likely protest against increasing benefits across the board, said Rachel Greszler, a research fellow at the Heritage Foundation.

“A compromise could be reached here in order to increase the minimum benefit that is provided, at least on the poverty line,” said Greszler. “But that would have to come … with a reduction in performance at the top.”

One challenge that could arise in the negotiations is that the heads of state and government have to face the decision of whether social security should be a program to combat poverty or an entitlement, Greszler said. Heritage advocates universal benefit to protect low-income people while reducing how many middle to high wage earners depend on benefits.

“It’s America’s most popular entitlement program, and part of the reason it’s so popular is that it’s not solvent,” Greszler said.

However, groups like Social Security Works and the National Committee for Social Security Preservation and Medicare focus on preventing benefit cuts.

Some Republicans could be swayed, Altman said.

“Although Republicans can try to block it, it will be very popular with their voters,” she said. “It’s just a question of whether they will.”

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