WASHINGTON, D.C. – Today, Senators Mazie K. Hirono (D-Hawaii), Tina Smith (D-Minn.), Kirsten Gillibrand (D-N.Y.), Jeff Merkley (D-Ore.), and Congressman Ted Deutch (D-Fla.) reintroduced the Protecting and Preserving Social Security Act, which would strengthen the Social Security program by restoring fairness in contributions while increasing benefits for seniors and other beneficiaries.
“For many seniors living in Hawaii on fixed incomes, Social Security benefits have not gone far enough to help them make ends meet and have not kept pace with the rising costs of consumer goods,” Senator Hirono said. “Social Security is the cornerstone of retirement and a safety net for millions of families who rely on the program every day to survive. I am proud to join Congressman Deutch in reintroducing this legislation as we continue our fight to strengthen and improve Social Security and to ensure that seniors and others who rely on this critical program receive the benefits they deserve.”
“Social Security remains one of the most important programs for about 63 million Americans, including most American seniors who depend on it as their main source of income. But this crucial source of income for Americans has not kept up with their rising costs and is on track to dry up completely by 2034,” Congressman Deutch said. “Rather than chip away at the program, we’re proposing a way to strengthen this pillar of retirement security and disability assistance by making sure all Americans, including those top income earners in our country, pay the same rate into Social Security. The cap will give the highest income earners – those who make over $500,000 per year – a big tax cut this week when they stop paying Social Security taxes. The rate most Americans pay into Social Security is 6.2 percent. But for people who make $500,000, their effective rate is only 1.6 percent. By scrapping the cap we can ensure all Americans contribute their fair share to retirement security and disability benefits for one another.”
“On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am pleased to endorse the Protecting and Preserving Social Security Act that would ensure a livable retirement for more Americans,” Max Richtman, the President and CEO of the National Committee to Preserve Social Security and Medicare, said. “By adopting the Consumer Price Index for the Elderly to determine cost-of-living adjustments, the bill assures that the purchasing power of benefits is maintained as beneficiaries age. And, this legislation improves Social Security’s financing for decades by requiring all Americans contribute their fair share to the program by lifting the cap on Social Security payroll taxes. The National Committee applauds Congressman Ted Deutch and Senator Maize Hirono’s leadership in strengthening Social Security and looks forward to working with them to enact this important legislation.”
“The ‘Protecting and Preserving Social Security Act’ will significantly improve the way that Social Security Cost of Living Adjustments are calculated to more accurately reflect the goods and services purchased by seniors,” Richard Fiesta, Executive Director of the Alliance for Retired Americans, said. “It will also extend the solvency of the trust fund until 2053 by requiring wealthy Americans pay their fair share into the Social Security system. On behalf of our 4.4 million retiree members, we commend Representative Deutch and Senator Hirono for their leadership on this critical issue. We also thank them for their 100% lifetime pro-retiree scores in the Alliance’s annual Congressional Voting Record.”
“Senator Hirono and Representative Deutch are Social Security champions. Their bill, the Protecting and Preserving Social Security Act, ensures that Social Security’s vital but modest benefits do not erode over time by enacting an improved formula for cost of living adjustments that reflects the real expenses beneficiaries face every day,” Nancy Altman, President of Social Security Works and Chair of the Strengthen Social Security Coalition, said. “Moreover, it restores Social Security to long-range actuarial balance by requiring that higher-paid workers pay their fair share. Under current law, those making over $500,000 a year will not be paying a single penny into Social Security the rest of the year. Under this bill, they will pay in all year long just like the rest of us. This legislation is both common sense and extremely wise.”
Most Americans contribute 6.2 percent of their paychecks to Social Security. However, high-income earners stop paying into the Social Security program once they have hit the annual contributions cap on maximum taxable earnings, which is $132,900 for 2019. Based on this contributions cap, this week marks the point in 2019 when the highest one percent of earners would stop paying into Social Security. The Protecting and Preserving Social Security Act would gradually phase out this contributions cap for high-income earners over the next seven years until everyone pays into the program at the same rate for the entire year – restoring fairness to the program.
Additionally, the Protecting and Preserving Social Security Act would also change how annual cost-of-living adjustments (COLA) are calculated for seniors and other beneficiaries to provide a more generous and accurate measure of inflation. Currently, COLA calculations for Social Security benefits are determined based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). However, as costs for seniors continue to climb faster than for those of other Americans, the Protecting and Preserving Social Security Act would replace CPI-W with the Consumer Price Index for the Elderly (CPI-E), a metric created by the Bureau of Labor Statistics to more accurately measure the costs incurred by elderly Americans – who tend to spend more of their incomes on medical care, prescription drugs, energy costs, and other rapidly-growing expenses.
Together, the Social Security Administration (SSA) has indicated these changes would improve benefits for seniors and others while extending the solvency of the combined Social Security Trust Fund by an additional 19 years – from the current 2034 to 2053.