Sanders-Warren Plan Would Tax the Rich to Increase Social Security by $2,400 a Year
"Right now, a Wall Street CEO who makes $30 million pays the same amount into Social Security as someone who makes $160,000 a year," said Sen. Bernie Sanders. "Our bill puts an end to that absurdity."
As congressional Republicans threaten to cut Social Security and other key federal programs, progressive Sens. Bernie Sanders and Elizabeth Warren led a group of lawmakers Monday in unveiling legislation that would increase Social Security benefits by at least $200 per month and prolong the program's solvency for decades by finally requiring wealthy Americans to pay their fair share.
The Social Security Expansion Act, introduced by Sanders (I-Vt.) and Warren (D-Mass.) in the Senate and by Reps. Jan Schakowsky (D-Ill.) and Val Hoyle (D-Ore.) in the House, would put an additional $2,400 in beneficiaries' pockets each year and ensure the program is fully funded through 2096.
The bill would accomplish this by lifting the cap on the maximum amount of income subject to the Social Security payroll tax—a change that would not raise taxes on the 93% of U.S. households that make $250,000 or less per year, according to an analysis conducted by the Social Security Administration at the request of Sanders.
Currently, annual earnings above $160,200 are not subject to the Social Security payroll tax, which means that millionaires will stop contributing to the program later this month. The legislation proposes lifting this cap and subjecting all income above $250,000 per year to the Social Security payroll tax. If enacted, the bill would have raised more than $3.4 billion from the nation's top 11 highest-paid CEOs alone in 2021, including $2.9 billion from Tesla and Twitter executive Elon Musk.
"The legislation that we are introducing today will expand Social Security benefits by $2,400 a year and will extend the solvency of Social Security for the next 75 years."
"At a time when nearly half of older Americans have no retirement savings and almost 50% of our nation's seniors are trying to survive on an income of less than $25,000 a year, our job is not to cut Social Security," Sanders said in a statement.
“Our job is to expand Social Security so that every senior in America can retire with the dignity that they deserve and every person with a disability can live with the security they need," the chair of the Senate Committee on Health, Education, Labor, and Pensions continued. "The legislation that we are introducing today will expand Social Security benefits by $2,400 a year and will extend the solvency of Social Security for the next 75 years by making sure that the wealthiest people in our society pay their fair share into the system."
"Right now, a Wall Street CEO who makes $30 million pays the same amount into Social Security as someone who makes $160,000 a year," the Vermont Independent added. "Our bill puts an end to that absurdity which will allow us to protect Social Security for generations to come while lifting millions of seniors out of poverty."
As Sanders' office noted:
Before 1935, when it was signed into law by President Franklin D. Roosevelt, about 50% of the nation's seniors were living in poverty, as well as countless Americans living with disabilities and surviving dependents of deceased workers. Nearly 90 years later, the senior poverty rate is down to 10.3% and in 2021 alone, during the onslaught of the Covid-19 pandemic, Social Security lifted 26.3 million Americans out of poverty, including more than 18 million seniors.
Despite this long legacy of combatting poverty, more must be done to strengthen the program, not cut it. While the average Social Security benefit is only $1,688 a month, nearly 40% of seniors rely on Social Security for a majority of their income; one in seven rely on it for more than 90% of their income; and nearly half of Americans aged 55 and older have no retirement savings at all.
Schakowsky warned that "instead of working to protect Social Security, my Republican colleagues are plotting to cut benefits and raise the retirement age."
Contrary to the claims of GOP lawmakers who are clamoring to slash benefits and postpone eligibility, the latest annual Social Security trustees report showed that the program has a $2.85 trillion surplus in its trust fund, enabling it to pay 100% of promised benefits through 2035, 90% for the next 25 years, and 80% for the next 75 years.
"While House Republicans are willing to put Social Security on the chopping block, we are fighting hard to protect Americans' hard-earned benefits and expand coverage," said Hoyle. "With the rising cost of living, it's time to modernize and expand the program."
"While House Republicans are willing to put Social Security on the chopping block, we are fighting hard to protect Americans' hard-earned benefits and expand coverage."
In addition to lifting the tax cap to boost benefits by $200 each month for all recipients, the Social Security Expansion Act would increase Cost-Of-Living-Adjustments by adopting a more accurate measure of inflation, improve the Special Minimum Benefit to help keep low-income workers out of poverty, and restore student benefits up to age 22 for children of disabled or deceased workers.
Endorsed by 56 labor unions and progressive advocacy groups, the legislation is overwhelmingly popular among voters, who have consistently expressed opposition to cutting or privatizing Social Security.
According to polling results published Monday by Data for Progress, 78% of likely voters support the Social Security Expansion Act, including 85% of Democrats, 75% of Independents, and 72% of Republicans. The survey, commissioned by Social Security Works, was conducted online from January 27 to January 30.
"Social Security Works is proud to endorse the Social Security Expansion Act," the group's executive director, Alex Lawson, said in a statement. "This bill is the answer to any politician or pundit who claims we 'can't afford' Social Security. It protects and expands benefits, and it is fully paid for by finally requiring the wealthy to contribute their fair share."
"During the State of the Union, nearly every member of Congress stood and clapped for protecting seniors," Lawson noted. "They should prove it by passing this bill into law."