The Social Security Act was passed 85 years ago on August 14, 1935, and for most of the elderly in this country Social Security is their major source of income.
The latest Social Security Trustees Report projects that the Trust Fund will run out of money by 2034.
Trump stated in his 2016 campaign not to reduce Social Security benefits. In 2020, his campaign website contains no information at all about his position on Social Security, but has previously suggested that funding for Social Security can be improved by increasing the bigliness of the economy with tax cuts, including a recent order to suspend payroll taxes.
While Trump’s apparent plan is to “starve the beast” and force benefit reductions, Biden has outlined how to sustain and improve the funding for the future.
- Increase payroll taxes on higher earners
While 12.4% payroll taxes apply to those earning less than $137,700, those who reach that threshold have further payroll taxes exempt. Biden wants the tax to kick back in on wage earners who reach the $400,000 level.
- Provide an enhanced special minimum benefit
Biden wants to beef up the minimum benefit from $886 per month, which is below the federal poverty level, to 125% of the federal poverty level — a significant increase to lifetime low wage earners — or around $1300 per month.
- Boost benefits for long-lived beneficiaries
As expenses increase for longer living elders, Biden wants to increase benefits each year by 1% for those between 78 and 82 up to a 5% increase.
- Switch the program’s inflationary tether to the CPI-E
Adjustments for inflation to benefits has been tethered to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Biden wants to change it to the Consumer Price Index for the Elderly (CPI-E). The previous standard in place since 1975 has produced a positive COLA for 42 of 45 years, but it is not tracking the costs of seniors accurately. The CPI-E would track the spending habits of those 62 and older.