This week, House Representative John B. Larson, chairman of the House Ways and Means subcommittee on Social Security and major advocate of the enhanced Child Tax Credit, presented a revised Social Security reform bill.
The new version of the bill, much like the CTC, aims to “offset the concentration of wealth,” House Ways and Means Committee Chair Richard Neal said. “We have this rare moment to accomplish seismic achievements, and this is the time to do it.”
The revised bill, known as Social Security Act 2100: A Sacred Trust, contains changes aimed at attracting the support of President Joe Biden, as well as Republicans in Congress. Minimum benefits will be set at 125% above the poverty line.
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In addition, the bill seeks to:
Set a higher minimum benefit for low-income workers
Offer a benefit boost of roughly 2% for new and existing beneficiaries
Include a cost-of-living adjustment tied to the Consumer Price Index for the Elderly (CPI-E)
Extend benefits for students up through age 25
Increase certain widow and widower benefits
Boost benefits after 15 years
Eliminate the five-month waiting period for disability benefits
Create caregiver credits for people who take time out of the workforce to care for family members so their benefits are not reduced
Additionally, the bill seeks to eliminate a higher payroll tax rate to fund the Social Security increases. Instead, caps for Social Security taxes paid by high-wage earners would rise. In 2021, Social Security taxes are capped at $142,800 in wages. In 2022, that limit rises to $147,000. Plus, taxes on wages will be reapplied on wages of $400,000 and up, in line with Biden’s intentions to raise taxes on high wage earners.
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The bill also proposes to raise the thresholds above which income, including Social Security, is taxed, CNBC reported. Currently, those amounts sit at $25,000 for individuals and $32,000 for couples. The bill calls for increases to $35,000 and $50,000, respectively.
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Last updated: October 27, 2021
This article originally appeared on GOBankingRates.com: New Social Security Bill: How Updates Could Lead to ‘Seismic Achievements’ for COLA and More