April 16, 2015

HIRONO, DEUTCH INTRODUCE BILL TO STRENGTHEN & IMPROVE SOCIAL SECURITY FOR SENIORS, MAKE SOCIAL SECURITY SYSTEM FAIRER FOR MIDDLE CLASS

Proposal Lifts The Cap On Social Security Contributions From Wealthiest, Preserves Social Security For Generations; On Heels of GOP Budgets That Hurt Seniors & Middle Class Families, Hirono & Deutch Offer Plan To Strengthen Social Security

WASHINGTON, D.C.- Today, Senator Mazie K. Hirono (D-HI) and Congressman Ted Deutch (FL-21) introduced the Protecting and Preserving Social Security Act — a measure that strengthens Social Security for generations to come and improves benefits for all Americans by restoring fairness to Social Security contributions. Currently, most Americans contribute 6.2 percent of every paycheck they earn to Social Security, while a corporate lawyer earning $400,000 pays an annual rate of just 1.71 percent and a CEO earning $2 million pays an annual rate of just .003 percent. By ensuring those at the very top of the income ladder pay into Social Security at the same rate as most Americans, this legislation extends the system’s solvency at a time when nearly two-thirds of retirees rely on Social Security for a majority of their income. The legislation also restores accuracy to a broken cost-of-living adjustment formula and ensures that the benefits of all retirees keep pace, instead of shrink, in the face of inflation.

“Social Security is one of the cornerstones for the middle class, and literally a lifeline for millions of seniors,” said Senator Mazie K. Hirono. “But right now, those at the very top of the income ladder pay a lower share of their income into Social Security than the rest of Americans. That’s not fair for middle class families in Hawaii or anywhere else. Our proposal would make sure all workers pay the same rate and would improve benefits for seniors.” 

“For most Americans, Social Security is the only thing they can count on to keep them out of poverty during retirement,” said Congressman Ted Deutch. “Instead of chipping away at Social Security, in times like these everyone in Washington should be rallying behind it as the one pillar of retirement security that still stands strong. Restoring fairness is the first step toward protecting the promise that a lifetime of hard work translates into basic dignity at retirement, and I am pleased to partner with Senator Hirono to make that case in the 114th Congress.”

While Republicans have consistently pushed for proposals that hurt middle class families by voucherizing Medicare and gutting Social Security, the Hirono-Deutch bill would protect the basic safety net for Americans who have worked hard their entire lives.  Social Security advocates praised the Protecting and Preserving Social Security Act and how it would benefit seniors. 

"Senator Mazie Hirono (D-HI) and Representative Ted Deutch (D-FL) are showing strong, visionary leadership in sponsoring the Protecting and Preserving Social Security Act of 2015, " said Nancy Altman, founding co-director of Social Security Works. "Their legislation provides for a more accurate cost of living adjustment that takes into account the true costs of seniors and people with disabilities.  Consequently, those receiving Social Security's modest benefits would no longer see those benefits erode over time. Their bill pays for the improvement, while ensuring that all benefits can be paid in full and on time for decades to come, by requiring the wealthiest among us to contribute the same percentage of their pay that the overwhelming majority of workers do. This bill is excellent policy and supported by the vast majority of Americans.  If members are truly representing the values and interests of their constituents, this should become law without delay."

"Representative Ted Deutch (D-FL) and Senator Mazie Hirono (D-HI) understand that Americans want to expand, not cut Social Security," said Eric Kingson, co-chair of the Strengthen Social Security Coalition. "The Protecting and Preserving Social Security Act squares well with the wishes of the American people. By 'scrapping the cap' it greatly strengthens Social Security's financing and ensures that the wealthiest among us contribute their fair share. In proposing to use the CPI-E to determine COLAs, it further protects the benefits of retirees and people with disabilities against inflation. The Strengthen Social Security Coalition commend Representative Deutch and Senator Hirono for championing this important legislation."

“The National Committee applauds Senator Mazie Hirono and Representative Ted Deutch for their leadership in strengthening Social Security by reintroducing his bill, the ‘Protecting and Preserving Social Security Act,’ in the 114th Congress,” said Max Richtman, President and CEO of National Committee to Preserve Social Security and Medicare. “This bill strengthens Social Security in a number of ways.  First, it would require that future cost-of-living adjustments be based on a fully developed Consumer Price Index for the Elderly or ‘CPI-E.’  The CPI-E would more accurately measure the rising prices of goods and services paid by seniors than the current urban and clerical worker index.  To make this important proposal affordable, Congressman Deutch’s bill would strengthen the financing of the Social Security program by lifting the cap on Social Security payroll contributions.  This bill represents a bold step on behalf of seniors and all Americans by strengthening and safeguarding Social Security for future generations without cutting the earned benefits of middle class Americans.  The National Committee looks forward to working with Representative Deutch and Senator Hirono to ensure this important legislation is enacted.” 

The Protecting and Preserving Social Security Act would strengthen Social Security while ensuring all Americans — even those at the top of the income ladder — pay the same rate into Social Security:  

  • Lifting the cap on high-income contributions – For most Americans, Social Security contributions are deducted from each paycheck. Current law sets a cap on contributions based on income ($118,500 for 2015). High-income earners stop paying into the program once they hit the cap each year. The Protecting and Preserving Social Security Act gradually and responsibly phases out this loophole over the course of seven years until higher-income Americans pay into Social Security at the same rate, all year long, just like everyone else.
  • Adjusting and improving benefits with a fair market basket of costs – This bill not only protects Social Security, but improves benefits for all retirees. Today, Social Security benefit payments are adjusted by the Consumer Price Index for workers. However, costs for seniors rise faster than for working Americans. As seniors spend more of their income on medical care, prescription drugs, energy costs, and other growing expenses, the purchasing power of their benefits continues to shrink. This bill restores accuracy to cost-of-living adjustments by replacing the CPI-W with the CPI-E, a metric created by the Bureau of Labor Statistics to accurately measure the costs incurred by elderly Americans.
  • Untouched, Social Security is solvent for nearly 2 decades; this bill adds decades more –Social Security’s self-sustaining payroll tax (Federal Insurance Contributions Act, or FICA) and available reserves in the Trust Fund will cover full benefits until at least 2033, and even longer if we promote strong economic growth and healthier paychecks for the American worker. Regardless of when exactly the Trust Fund is depleted, without any changes at all Social Security is able to pay 75 percent of Americans’ benefits indefinitely. The Protecting and Preserving Social Security Act will extend the solvency of the Trust Fund for decades into the future.