Reintroduced Social Security Bill Would Increase Payroll Tax Limit
Two democratic lawmakers reintroduced Social Security legislation last week that would raise the payroll tax cap.
The Protecting and Preserving Social Security Act, reintroduced by U.S. Senator Mazie K. Hirono (D-HI) and U.S. Representative Jill Tokuda (D-HI) would use the Consumer Price Index for the Elderly (CPI-E) instead of the Consumer Price Index for Urban Wage Earners to calculate cost-of-living adjustments (COLA). It would also require for the wealthiest Americans to “pay their fair share” by phasing out caps on Social Security contributions gradually over the next seven years. The current limit sits at $176,100 per year.
The legislation would also stop the Social Security Administration (SSA) from reclaiming final checks—in which the agency retrieves benefit checks during the same month in which an individual passes away.
“Our bill strengthens benefits, accounts for the true cost of living, ends unjust practices like reclaiming final checks, and—most importantly—makes the wealthiest finally pay their fair share, securing this promise for generations to come,” said Rep. Tokuda in a statement.
The Protecting and Preserving Social Security Act is endorsed by the National Committee to Preserve Social Security and Medicare (NCPSSM); Alliance for Retired Americans (ARA); and Social Security Works (SSW).
Supporters of the bill champion the legislation for its efforts to remove the CPI-W for current COLA figures. Using that formula creates an inaccurate figure that does not reflect rising prices and daily inflation, they say.
“For years, we have been calling for an improved COLA formula that reflects the real impact of inflation on seniors, which the current one (CPI-W) does not. Every extra dollar in COLAs will help older Americans to meet their monthly living expenses—from groceries to gas to housing,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
The bill is also cosponsored by Sens. Jeff Merkley (D-OR) and Tina Smith (D-MN) and Reps. Steve Cohen (D-TN), Veronica Escobar (D-TX), Lois Frankel (D-FL), Eleanor Holmes Norton (D-DC), Seth Magaziner (D-RI), Brittany Pettersen (D-CO), Chellie Pingree (D-ME), Rashida Tlaib (D-MI), and Paul Tonko (D-NY).
SEE ALSO:
Social Security Turns 90: Still Popular, Still Under Pressure
Social Security COLA Forecast Boosts Slightly to 2.7%
Schumer Introducing New Legislation to ‘Protect’ Social Security
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. She is originally from Queens, New York, but now resides in Denver, Colorado.
