The future of Social Security is likely to be a hot topic in the 2016 presidential election, but it only popped up briefly in the 1st debate among Democratic candidates.
During Tuesday night’s debate (Oct. 13, 2015), Vermont Sen. Bernie Sanders said, “My view is, when you have millions of seniors in this country trying to get by — and I don’t know how they do on $11,000, $12,000, $13,000 a year — you don’t cut Social Security, you expand it.”
Then Sanders reiterated his plan for removing the cap on Social Security payroll taxes — $118,500 in 2015 — so higher earners pay taxes on more of their income.
“The way you expand (Social Security) is by lifting the cap on taxable incomes so that you do away with the absurdity of a millionaire paying the same amount into the system as somebody making $118,000,” he said. “You do that, Social Security is solvent until 2061 and you can expand benefits.”
Sanders was referring to the bill he has sponsored in the U.S. Senate, the Social Security Expansion Act. This bill would expand payroll taxes so they would apply to earnings greater than $250,000. Among other provisions, the bill would also levy a new 6.2% tax on investment income over $200,000 for a single person or $250,000 for married couples, with no upper limit on the amount to be taxed. Social Security’s chief actuary analyzed this proposal last March and concluded that it would extend the life of Social Security trust funds to 2065, after which Social Security would be able to support only 88% of promised benefits.
Another thing Sanders didn’t say is that those who pay these higher taxes wouldn’t get more Social Security — a big difference from the way Social Security is calculated now.
Hillary Clinton’s input
When asked during the debate whether she agreed with Sanders’ proposal, Hillary Clinton hesitated and then said, “I fully support Social Security. And the most important fight we’re going to have is defending it against continuing Republican efforts to privatize it.”
When the moderator pushed for her to respond to the question of expansion of Social Security, she said she would expand benefits for some of the lowest-income beneficiaries.
“I want to enhance the benefits for the poorest recipients of Social Security,” Clinton said. “We have a lot of women on Social Security … particularly widowed and single women who didn’t make a lot of money during their careers, and they are impoverished and they need more help from the Social Security system.”
On the GOP side, earlier this year New Jersey Gov. Chris Christie outlined a specific proposal to reform Social Security. His 12-step proposal would affect Social Security and Medicare. He says it would reduce the federal deficit by $500 billion over 10 years.
Editor’s Note: After Fifty Living thanks Jennie L. Phipps and Bankrate.com for providing this article.