Updated: 2 Ways a Harris Presidency Could Impact Social Security
With the likelihood of being selected as Joe Biden’s Democratic running mate for the November presidential election increasing in recent weeks, it’s time to take a closer look at Kamala Harris’ views on retirement saving.
After all, if a Biden-Harris ticket were indeed to win the White House, the Democratic Senator from California would find herself “a heartbeat away from the presidency,” while Biden would become the oldest-ever to take the oath of office on inauguration day (Jan. 20, 2021) at 78 years, 61 days.
Biden has publicly stated his intention to select a woman as a running mate, and in light of recent events, the chances of it being a woman of color have no doubt increased. He also said recently, perhaps in a nod to his own age, he wants to select someone “who is ready to be President on Day 1,” in what is widely being viewed as one of the most significant VP nominee choices ever as Biden attempts to unseat President Donald Trump in November.
The 55-year-old Harris, who suspended her own bid for the Democratic presidential nomination back in December, checks off a number of the boxes. She is the clear frontrunner to join the Biden ticket at the moment, with her odds increasing as a result of the unrest following the death of George Floyd.
When asked in an interview last week with The New York Times about her prospects for being chosen as the running mate, Harris had this to say:
“I’m going to tell you what I honestly and deeply believe. Joe Biden has got to win this election. And I want him to choose whoever he believes, and whoever can help him win. Period. I know that sounds pretty coldblooded, but that’s where I am.”
When it comes to the subject of saving for retirement, she’s perhaps a little coldblooded as well because we haven’t heard her so much as utter the term “401k.” But here’s what we do know about Harris’ stance on retirement-related issues.
“Medicare for All” via a financial transaction tax
When Harris released her own version of a “Medicare for All” plan in July 2019 with a longer transition period of 10 years, the proposal intended to pay for the program largely by imposing a financial transactions tax that would impact retirement savers—even though she said at the time her plan would not raise taxes on the middle class.
According to the American Retirement Association (ARA), the proposal claimed it would raise “well over $2 trillion” over a 10-year period through a few measures, including a tax on stock and bond trading with no apparent exception for retirement accounts.
“American workers aren’t day-traders. At a time when lawmakers claim to be so concerned about retirement income adequacy and the impact of 401k fees, it’s stunning that some would attack the retirement savings of hard-working Americans,” said ARA CEO Brian Graff in a July 29, 2019 statement denouncing the proposal.
The ARA cited a 2015 report by the Obama Administration’s Council of Economic Advisors on the impact of 401k fees, which said these kind of taxes could reduce an American’s retirement savings by as much as 3% over their working life.
“Every week millions of Americans sacrifice to set aside part of their hard-earned pay for retirement, investing those savings to help provide a secure financial future,” Graff said in the statement. “After years of attacking 401k plan fees, some members of Congress—and those with an eye on the White House—now want to charge a fee every time a hard-working American contributes part of their pay into their 401k. Saving for retirement is hard work. And Congress shouldn’t work to make it any harder.”
Biden of course favors focusing on expanding the Affordable Care Act without thoroughly revamping the healthcare delivery system, and has characterized “Medicare for All” as too expensive and radical.
In Feb. 2019, Harris joined senate colleagues Bernie Sanders (I-VT), Cory Booker (D-NJ), Kirsten Gillibrand (D-NY) and Jeff Merkley (D-OR) to introduce legislation to expand Social Security benefits and “strengthen the retirement program for generations to come,” according to a statement from her Senate website.
The legislation, the Social Security Expansion Act, sought to increase benefits by about $1,342 a year for seniors now making less than $16,000 annually and increase cost-of-living adjustments by more accurately measuring the spending patterns of seniors.
“In the richest nation in the world, it is a travesty that so many Americans are struggling to keep up with the rising cost of living,” Harris said. “Over the past two years, this administration has been more focused on cutting taxes for the top 1% than making sure families can make ends meet. We need to expand Social Security and provide our seniors and other beneficiaries of this vital program with greater dignity and peace of mind.”
The bill would ensure that Social Security could pay every benefit owed to every eligible American for the next 52 years, according to the retirement system’s chief actuary. It would extend the program’s solvency by making the wealthiest 1.8% of Americans—those with incomes of more than $250,000 a year—pay the same rate into the retirement system as everyone else already pays. Current law caps the amount of income subject to payroll taxes at $132,900.
State-based retirement plans
Back in 2017, Harris blasted a vote by Senate to roll back an Obama-era rule that made it easier legally for states like California to set up 401k-type plans for private-sector companies who don’t otherwise have access to a retirement plan.
“At the behest of the financial services industry, Republicans just overturned a rule that helps people save for retirement,” Harris tweeted on May 3, 2017, as California prepared the rollout of CalSavers, the state’s automatically enrolled, state-run retirement plan.
While CalSavers eventually survived a legal challenge claiming the program was expressly preempted by ERISA, Democrats at the time slammed the Senate vote as an example of Republicans caving to Wall Street interests at the expense of Main Street Americans to need help saving for retirement.
More about Harris and retirement
While there is admittedly little else to go on in terms of Harris talking about her stance on saving for retirement, there are a few related bullet points out there. Such as:
- Harris’ campaign website said she would repeal the Trump tax cuts and “use the money saved to help make sure the LIFT Act can give working people a little extra support.”
As explained in The Atlantic, Harris’ LIFT the Middle Class Act, a kind of universal basic income program, would offer a cash payment to most middle-class households. Single people would get $250 per month or $3,000 a year, married couples would get $500 per month or $6,000 a year, and it would phase out for singles without kids making $50,000 or more, and for married couples or single people with kids making $100,000 or more. It would cost about $200 billion in the first year or $2 trillion over 10, which is roughly in the range of the price tag for the 2017 Trump tax cuts.
“Half of Americans are a $500 emergency away from financial chaos,” Harris told The Atlantic. “A trip to the emergency room or an unexpected expense should not land you in bankruptcy court or drive you to a predatory payday lender.”
- Harris has long been pro-organized labor, and as Attorney General in California, she was accused of killing state pension reform efforts in 2013 by wording a summary with language favored by labor groups designed to ensure a ballot measure making modest pension cuts would not pass.
- On the subject of student loan debt, as a candidate in July 2019 Harris put forth a proposal that sparked some confusion about its conditions, particularly compared to proposals from other candidates. Under her proposal, borrowers who received a Pell Grant, money the government provides to low-income students to attend college, would have up to $20,000 of their other student loan debt forgiven if they start a business and operate it for at least three years in a disadvantaged community. In addition, qualifying borrowers would have their loans deferred interest-free for an up to three-year business formation period.
According to her campaign, the proposal was intended to support closing the wealth gap among black Americans by focusing on investing in higher education and entrepreneurship.
SEE ALSO:
- 2 Ways a Harris Presidency Could Impact Social Security
- Trump Calls for Elimination of Social Security Tax