Senator Bernie Sanders (D-VT) and Senator Elizabeth Warren (D-MA) along with several other Democrats have proposed a new programme that would raise the tax on wealthy Americans to allow the government to pay retirees more.
The senators have said that the program will boost earnings by $2,400 per year and can be sustained until 2096, CNBC reports.
“Today, absurdly and unfairly, there is a cap on income subject to Social Security taxes,” Sanders said reading from a prepared statement.
At this stage, Americans are only taxed on the first $147,000 of their annual income for social security. Any earnings above this are not garnished. The Democrats have said that the Social Security Expansion Act would “would lift this cap and subject all income above $250,000 to the Social Security payroll tax,” per a fact sheet provided by Senator Bernie Sanders.
A recent federal social security report has stated that the program can only sustain monthly checks to elderly citizens and those with disabilities for a period of 13 years. For social security to continue beyond 20 years, a reduction in benefits of 20% would be required.
“In the coming decades it will be vital for Congress to take steps to put Social Security and Medicare on solid financial footing for the long term,” Treasury Secretary Janet Yellen said in response to the report.
Senator Lindsey Graham (R-SC) stated during a hearing on Thursday that the retirement age will likely have to be raised. Senator Mitt Romney (R-UT) backed this up in comments made in March this year.
“If we’re ever going to get a handle on our debt, we’re gonna have to find a way to either increase revenue, which I don’t favor, or find a way to adjust our long-term benefits not for current retirees,” he said at a Senate Budget Committee hearing on Wednesday, seemingly ruling out any tax hikes.
Romney stated during Thursday’s budget committee hearing: “Sen. Sanders makes a wonderful plea, which many, many people agree with, the need for helping our seniors and providing better benefits for them and so forth. But recognize this bill has no chance whatsoever of receiving a single Republican vote in either house.”
As noted by Business Insider, Romney has put forward a bill called the TRUST Act, which he says would work to improve federal programs such as Medicare and Social Security.
“We estimate that enactment of these provisions would extend the ability of the OASDI (Old Age, Survivors, and Disability Insurance) program to pay scheduled benefits in full and on time throughout the 75-year projection period,” said Stephen Goss, chief actuary at the Social Security Administration, in a statement.
ARTICLE: PAUL MURDOCH
MANAGING EDITOR: CARSON CHOATE
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