This is what Joe Biden campaigned on. You don’t
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Posted On: 01/27/2023 10:04:44 AM
This is what Joe Biden campaigned on. You don’t have a clue in what is his history. You are just trying to stir the pot with misinformation.
Biden’s 4 items he would like to change on Social Security.
1. Increase payroll taxation on the well-to-do
Arguably the most popular change proposed by now-President Joe Biden is having the well-to-do pay more into the system.
In 2022, all earned income (wages and salary but not investment income) between $0.01 and $147,000 is subject to the 12.4% payroll tax. Approximately 94% of working Americans are paying this tax on every dollar they earn. But for high earners, wages and salary above $147,000 are exempted from the payroll tax. We're talking about well over $1 trillion in earned income avoiding the payroll tax each year.
Biden's plan is simple: Create a doughnut hole between the current payroll tax cap ($147,000) and $400,000 where earned income would remain exempt. For wages and salary above $400,000, the 12.4% payroll tax would kick in again. This should allow Social Security to collect extra revenue each year. Plus, with the payroll tax cap increasing most years, this doughnut hole should eventually close over time.
2. Boost benefits for long-lived beneficiaries
The second change Biden proposed was increasing the primary insurance amount (PIA) doled out to aged beneficiaries. The reason for this change is that, as people age, some of their expenses, such as medical transportation costs, can rise a lot faster than the COLA attached to their Social Security benefit.
Biden outlined a plan to increase the PIA by 1% annually from ages 78 through 82 until aged beneficiaries receive a cumulative 5% bump.
3. Lift the special minimum benefit
A third Social Security change offered by Biden during his campaign was to enhance the special minimum benefit.
In 2022, a lifetime low-earner with 30 years of coverage could receive a monthly benefit of almost $951. The issue is this isn't anywhere close to the federal poverty level (for one individual) of $1,132.50/month, as of 2022.
Biden's proposal suggests increasing Social Security's special minimum benefit to 125% of the federal poverty level. Instead of $951, a lifetime low-earning worker with 30 years of coverage could be receiving nearly $1,416 per month under Biden's plan in 2022.
4. Change the inflationary tether from the CPI-W to the CPI-E
The fourth and final Social Security change Joe Biden wants to make is to switch the program from its ineffective inflationary tether, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), to the Consumer Price Index for the Elderly (CPI-E).
As noted, the CPI-W has done a poor job of accounting for the inflation seniors are facing, which has resulted in a 40% loss of purchasing power this century. Since the vast majority of Social Security recipients are seniors, utilizing an index that solely focuses on the expenditures important to aged Americans (i.e., the CPI-E) should lead to more accurate COLAs on an annual basis.
Biden’s 4 items he would like to change on Social Security.
1. Increase payroll taxation on the well-to-do
Arguably the most popular change proposed by now-President Joe Biden is having the well-to-do pay more into the system.
In 2022, all earned income (wages and salary but not investment income) between $0.01 and $147,000 is subject to the 12.4% payroll tax. Approximately 94% of working Americans are paying this tax on every dollar they earn. But for high earners, wages and salary above $147,000 are exempted from the payroll tax. We're talking about well over $1 trillion in earned income avoiding the payroll tax each year.
Biden's plan is simple: Create a doughnut hole between the current payroll tax cap ($147,000) and $400,000 where earned income would remain exempt. For wages and salary above $400,000, the 12.4% payroll tax would kick in again. This should allow Social Security to collect extra revenue each year. Plus, with the payroll tax cap increasing most years, this doughnut hole should eventually close over time.
2. Boost benefits for long-lived beneficiaries
The second change Biden proposed was increasing the primary insurance amount (PIA) doled out to aged beneficiaries. The reason for this change is that, as people age, some of their expenses, such as medical transportation costs, can rise a lot faster than the COLA attached to their Social Security benefit.
Biden outlined a plan to increase the PIA by 1% annually from ages 78 through 82 until aged beneficiaries receive a cumulative 5% bump.
3. Lift the special minimum benefit
A third Social Security change offered by Biden during his campaign was to enhance the special minimum benefit.
In 2022, a lifetime low-earner with 30 years of coverage could receive a monthly benefit of almost $951. The issue is this isn't anywhere close to the federal poverty level (for one individual) of $1,132.50/month, as of 2022.
Biden's proposal suggests increasing Social Security's special minimum benefit to 125% of the federal poverty level. Instead of $951, a lifetime low-earning worker with 30 years of coverage could be receiving nearly $1,416 per month under Biden's plan in 2022.
4. Change the inflationary tether from the CPI-W to the CPI-E
The fourth and final Social Security change Joe Biden wants to make is to switch the program from its ineffective inflationary tether, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), to the Consumer Price Index for the Elderly (CPI-E).
As noted, the CPI-W has done a poor job of accounting for the inflation seniors are facing, which has resulted in a 40% loss of purchasing power this century. Since the vast majority of Social Security recipients are seniors, utilizing an index that solely focuses on the expenditures important to aged Americans (i.e., the CPI-E) should lead to more accurate COLAs on an annual basis.
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