Joe Biden Has Called for Social Security Benefit Cuts 2 Times

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For most Americans, Social Security is or will become an essential source of income during retirement. According to surveys conducted by the national pollster Gallup, nearly 90% of current retirees rely on their Social Security income to make ends meet. In addition, 84% of non-retired people expect to rely on Social Security as a “big” or “minor” source of income during their golden years.

But while it’s been our nation’s most successful retirement program for over eight decades, Social Security is in some pretty serious financial trouble. According to the 2022 Social Security Board of Trustees report, the program will face an overwhelming $20.4 trillion cash shortfall over the next 75 years. While this doesn’t mean Social Security is insolvent — thankfully, the program can’t go bankrupt as long as Americans continue to work — it does predict the growing likelihood of hefty benefits on the not-too-distant horizon if nothing changes.

Image Source: Official White House photo by Katie Ricks.

Social Security needs to be “fixed” so that it can thrive for generations to come, and that means making the tough decision to collect more income, cut benefits, or run a combination of the two.

While most lawmakers don’t shy away from calling for cuts in Social Security benefits directly, President Joe Biden has done so on two separate occasions.

1. Biden Leaves the Door Open to Raise the Full Retirement Age

Speaking in a very broad sense, Biden’s political party (Democrat) prefers to generate additional income for Social Security by raising the payroll taxes paid by high-earning workers. But every now and then we see prominent lawmakers break with their party on important issues, which is exactly what happened when Joe Biden ran for president for the 2008 ticket.

In September 2007, Biden released a plan aimed, among other things, at strengthening Social Security. Keep in mind that since the 1985 board of directors report, lawmakers have known that Social Security was not on track to generate enough revenue to cover projected payouts for the next 75 years. While this plan called for an increase in the maximum taxable income ceiling for high earners, Biden was also open to discussing bipartisan options, such as raising the full retirement age.

The full retirement age is the age at which a beneficiary is eligible to receive 100% of their retired employee benefits. About six decades after the first Social Security check went out in 1940, the full retirement age was set at 65. But after two rounds of gradual increases, anyone born in 1960 and later will have a full retirement age of 67.

Raising the full retirement age, a core solution touted by Republicans, would result in eligible beneficiaries having to wait longer to receive their full monthly payout. Regardless of whether retired employees choose to take their payout early — and thus accept a permanently reduced monthly benefit — or wait until full retirement age, raising the full retirement age would reduce the lifetime benefits paid to a retired employee. to lower.

2. Joe Biden Calls For Income Testing

The second time President Biden called for Social Security cuts happened more recently.

In May 2018, nearly a full year before his candidacy for president, Biden called for an income test during a speech at a Brookings Institution event. Said Biden:

Paul Ryan [the former Republican speaker of the house] was right when he did the tax code. What’s the first thing he decided we should go after? Social security and health care. Now we have to do something about social security and health care. That’s the only way you can find space to pay for it. Now I don’t know a lot of people in the top a tenth of 1% or top 1% [who] are dependent on Social Security when they retire.

While Biden’s comments primarily emphasize the need to gradually increase payroll taxes on high-income earners, they also hinted at the idea of ​​income-testing for benefits.

An income review would involve canceling all or part of Social Security benefits to eligible recipients based on pre-determined annual income thresholds. In other words, it would ensure that individuals and couples who do not need Social Security benefits to live comfortably would receive a lower benefit or perhaps no benefit at all. While this would only affect a small percentage of beneficiaries, it still calls for cuts in benefits.

A person counting a range of cash bills in his hands.

Image source: Getty Images.

President Biden’s Four-Point Social Security Plan Is a Chance to Succeed

The thing about our elected officials is that their views on policy tend to change over time. Such is the case with President Biden, whose four-point plan to strengthen Social Security — this plan was drawn up during his campaign — makes no mention of cutting or reducing Social Security benefits.

In no particular order, here are the four Social Security changes Biden is now advocating:

  1. Increase payroll taxes for high earners: In 2022, all earned income between $0.01 and $147,000 will be subject to Social Security’s 12.4% payroll tax. However, more than $1 trillion in wages and salaries above $147,000 are exempt from this tax. Biden has proposed creating a donut gap between the current payroll tax cap and $400,000, with earned income remaining exempt. Meanwhile, payroll taxes would be reinstated on all wages and salaries above $400,000 to generate more revenue for Social Security.
  2. Increase the special minimum benefit: Biden advocates raising the minimum monthly payout to low-income people to 125% of the federal poverty level. If this proposal were passed into law by 2022, it would mean a special minimum benefit of $1,416/month instead of $951 for a low-earner lifetime earner with 30 years of coverage.
  3. Elevator Benefits for Longevity Social Security Recipients: Under Biden’s plan, the primary insurance amount (PIA) is to be increased by 1% annually from ages 78 to 82, which would equate to a total increase of 5% to the PIA. This proposed benefit increase is intended to help older beneficiaries cover increased costs as they age, such as medical transportation costs.
  4. Switch the inflationary chain to the CPI-E from CPI-W: Finally, Biden has called for the consumer price index for the elderly (CPI-E) to become the new Social Security inflation measure. While the consumer price index for urban wage earners and white-collar workers (CPI-W) has been the program’s inflationary chain since 1975, it’s not particularly good at tracking spending that matters most to seniors.

While these proposals have the potential to strengthen Social Security, Biden’s plan is nowhere near the number of votes (60) it would need to change Social Security in the Senate.

The conundrum of Social Security reform is that both US political parties have a working solution, meaning neither is willing to give in an inch and come to an agreement with their opposition. Without cooperation on Capitol Hill and from the Oval Office, Social Security seems destined to move toward what could be a significant benefit cut in just 12 years.


The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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