Invoice in Congress goals to guard social safety beneficiaries from poverty
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First, it would update the so-called special minimum benefit – a floor for low wage earners – to 100% of the current poverty line. This would apply to those who have been paying social security for at least 30 years and are receiving benefits when they reach full retirement age (usually 66 or 67, depending on their date of birth). The benefits would be adjusted so that employees who have been in employment for at least 10 but less than 30 years are also entitled.
In addition, Moore is calling for childcare credits to be applied to future program entitlements for parents of children under the age of 6. These parents would receive credit for a maximum of five years for each year a child under that age was in the household. This time would count towards the 30 years required for the special minimum benefit.
The bill also provides for a 5% increase in monthly checks for all beneficiaries once they have retired for 20 years. This increase would begin gradually when the beneficiaries reached 16 years of eligibility.
For the children of deceased and disabled employees, the student allowance is to be increased so that they are up to the age of 26. Currently, benefits are only paid for children up to the age of 18.
Moore’s plan also includes changes to pay for the extended benefits.
This includes the gradual abolition of the social security wage tax ceiling, which currently only applies to wages up to US $ 142,800.
At the same time, the plan provides for a gradual increase in the tax rate for employers and employees to 6.5% from the current 6.2% over a period of six years.
“My proposal would help us ensure that Social Security does what it is supposed to: protect all older Americans from retiring into deep poverty,” Moore said in a statement.
Challenges in social security reform
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Other Democratic social security proposals have also sought to set a minimum benefit to keep people out of poverty.
This includes five platforms of the Democratic presidential candidates from the last election: President Joe Biden, Secretary of Transportation Pete Buttigieg, Senator Amy Klobuchar from Minnesota, Senator Bernie Sanders from Vermont, and Senator Elizabeth Warren from Massachusetts.
Those plans were given more concrete shape than the previous presidential election, when Hillary Clinton’s platform was limited to providing care loans, said Karen E. Smith, a senior fellow at the Urban Institute, a Washington, DC think tank.
Rep. John Larson, D-Conn., Has also tabled a bill aimed at increasing benefits.
Notably, these other proposals tend to set the minimum benefit at 125% of the federal poverty line instead of 100%.
Regardless of how you choose to redistribute benefits, you can eradicate poverty and still have future cohorts with higher benefits than current beneficiaries.
Karen E. Smith
Senior Fellow at the Urban Institute
One problem with the proposals is how well they actually tackle poverty, Smith said. For example, only new beneficiaries can take advantage of the higher minimum benefits. At the same time, a 20-year bump-up could create a bias against higher-income people as they tend to live longer, she said.
While these plans call for an increase in benefits for some beneficiaries, they also aim to address the solvency problems of the program, albeit to varying degrees.
With the Social Security trust funds about 10 years left – at which point the benefits will be cut – “they have to deal with it,” Smith said of Washington’s leader.
“It really is a debate in Congress that we have to have and that didn’t take place,” said Smith.
Steps to eradicate poverty can now be taken at relatively low cost.
“No matter how you choose to redistribute benefits, you can eradicate poverty and still have future cohorts with higher benefits than current beneficiaries,” said Smith.
Granted, passing a social security bill in the near future may be out of reach.
But another change – supplementary security income reform – would be easier for Congress to pass now and would inevitably help the poor who are targeted by those benefits, Smith said.
In 2021, the maximum monthly SSI benefit is $ 794 per person or $ 1,191 per couple if both individuals qualify for the program.
A Senate bill calls for these monthly benefits to be increased to 100% of the federal poverty line, which would result in a 31% increase in income.
“Increasing SSI benefits really helps poor people,” said Smith. “That would be a big improvement.”