By Maureen Bo, Administrative Vice President of PSARA
A new bill sponsored by Sen. Tom Harkin of (D-Iowa) combines benefit increases for low and middle income Social Security recipients with phasing out the “cap” on contributions from high income earners. The phase out of the “CAP”, currently $113,700, will pay for increased benefits. (Example: If a worker is paid less than $113,700 a year, the worker pays 6.2% of every dollar earned towards Social Security. Someone who makes $1 million a year on payroll, pays only on the first $113,700–or about 1/10th of what most workers pay.)
Social Security has been the target of right-wing propaganda for years. Various corporate interests try to grab the money or make benefits so little that workers cannot afford to retire. It is not an unearned “entitlement” like tax free yacht purchases; WE PAID FOR IT! It is not causing budget deficits; two unfunded wars and the Wall Street Casino crash caused the deficit. Social Security is needed now more than ever as defined benefit pensions are being eliminated by employers, and 401k pensions, financial investments and home values have decreased. According to Washington D.C. based advocacy group, Social Security Works, the “Strengthening Social Security Act of 2013” (S. 567) would:
- Increase benefits for current and future Social Security beneficiaries by changing the method used by the Social Security Administration to calculate Social Security benefits. Over time, benefits for all Social Security beneficiaries will be increased an average of $70 per month. The Act particularly targets those in the lower and middle income distribution for whom Social Security has become either their entire retire- ment income or a growing proportion of their income.
- Ensure that cost of living adjustments (COLA) adequately reflect the living expenses of seniors. The Act requires adoption of the Consumer Price Index for the Elderly (CPI-E) which better reflects cost increases paid by seniors. This change is likely to result in higher COLAs, which will allow seniors to better keep up with the rising cost of essential items like health care.
- Improve the long term financial condition of the Social Security Trust. The Act phases out the current taxable cap of $113,700 so that payroll taxes apply to every dollar of wages. While the Trust Fund is not in crisis, it does face a long- term deficit. This change will significant- ly extend the solvency of the trust fund and assure payment of full benefits at least through 2049.
S. 567 is a direct challenge to those who advocate for cuts to Social Security such as the “chained CPI” and/or raising the age of eligibility.
PSARA members are urged to call our Senators and request they co-sponsor Sen. Harkin’s Bill – The Strengthening Social Security Act of 2013 (S.567). When a com- panion bill is introduced in the House, we will ask you to call your Representatives. In Washington state call: Senator Patty Murray 206-553-5545 or 1-866-481-9186; Senator Maria Cantwell, 206-220- 6400 or 1-888-648-7328.