Lawmakers Push New Social Security Bills to Avert Insolvency
As the Social Security Trustees report projects a 22% cut to benefits starting in 2032, two new bills would aim to narrow the incoming insolvency.
Congressman Tom Suozzi (D-NY) on Monday introduced the “Bipartisan Social Security Commission Act,” a bill that would create a 13-member bipartisan, independent commission to address cuts to Social Security’s benefits.
The group would be modeled after the 1983 Social Security Commission, which was launched in an effort to curtail Social Security funding shortfalls at the time. Members would be appointed by the president, congressional leaders from parties in the House and Senate, and the chair and ranking member of the House Committee on Ways and Means and the Senate Finance Committee. Under the bill, two of the congressional appointees would be non-elected experts.
The Commission would have one year to build recommendations for Congress to address the solvency. Once a bipartisan agreement is reach, the legislation would be fast-tracked through the House of Representatives and Senate before becoming law.
“As a Congress, we must act. The Bipartisan Social Security Commission Act will allow us to find commonsense solutions to ensure the long-term survival of this program,” said Representative Tom Cole (R-OK), who co-led the bill.
The proposed legislation has received support from Social Security experts and nonpartisan groups, including the American Enterprise Institute Senior Fellow and expert Andrew Biggs. “The Commission on Long-Term Social Security Solvency provides a desperately needed framework for developing reforms that can strengthen retirement security while improving the nation’s fiscal outlook. The Commission’s bipartisan composition and supermajority voting requirement ensure that Democrats and Republicans must at last work together to find common ground on Social Security reform,” Biggs said in a statement.
Other supporters of the bill include the Bipartisan Policy Center Action, the Peterson Solutions Fund, the Committee for a Responsible Federal Budget, Concord Action, the American Action Forum, Third Way, and the Progressive Policy Institute.
A recent brief from the Center for Retirement Research at Boston College observes that while reforms to fix Social Security’s insolvency are possible, lawmakers will need to enact bipartisan measures to fix the funding gap.
Another bill, introduced by Ways and Means Committee member Congresswoman Linda T. Sánchez (D-CA), seeks to accurately mirror Social Security cost-of-living adjustments (COLAs) to daily costs for seniors and would phase out income tax caps.
The “Strengthening Social Security Act” would replace the CPI-W—the formula used to calculate annual Social Security COLAs—with the CPI-E. Experts have argued that substituting the current formula with the CPI-E would accurately reflect the cost of living for seniors today.
“Seniors paid into Social Security their whole lives on the promise it would be there when they needed it,” said Sánchez. “That promise is now at risk when too many retirees are already struggling to afford groceries, medicine and housing. The trust fund is heading toward insolvency and we must act. The single most important thing we can do to protect Social Security’s future is phase out the income cap so the wealthy finally pay their fair share. That alone would dramatically extend the life of the program. Our bill will also fix the cost-of-living formula so benefits actually keep up with what seniors spend.”
The bill would also gradually eliminate the taxable cap of $184,500 to ensure wealthy individuals are paying their share into the program and raise widow and widower benefits to 75% of combined benefits or the Primary Insurance Amount.
The bill is cosponsored by Representatives Eleanor Holmes Norton (D-DC), Janice Schawkowsky (D-ILL), Stephen Lynch (D-MA), Steve Cohen (D-TN) and Chellie Pingree (D-MN) and is endorsed by the National Education Association and Alliance for Retired Americans.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news.