House Ways and Means Social Security Subcommittee Chairman Representative Sam Johnson (R-Texas) introduced legislation he says will permanently save Social Security.
Johnson notes that this year, the Social Security Trustees Report warned workers will face a 21% benefit cut starting in 2034 if Congress does not reform the program.
The Social Security Reform Act of 2016 will:
- Modernize how benefits are calculated to increase benefits for lower income workers while slowing the growth of benefits for higher income workers;
- Gradually update the full retirement age at which workers can claim benefits to 69. The new retirement age better reflects Americans’ longer life expectancy while maintaining the age for early retirement;
- Ensure benefits keep up with changes in the economy by using a more accurate measure of inflation for the annual cost-of-living-adjustment;
- Protect the most vulnerable Americans by increasing benefits for lower-income earners and raising the minimum benefit for those who earned less over the course of long careers;
- Promote flexibility and choice for workers by eliminating the Retirement Earnings Test for everyone. This allows workers to receive benefits—without a penalty—while they are working, or fully delay retirement and wait to receive benefits. For those who delay claiming benefits, they can receive increases in a partial lump sum or add it all to their monthly check;
- Encourage saving for retirement by phasing out Social Security’s tax on benefits for workers who continue to receive income after they retire or stop working due to a disability;
- Target benefits for those most in need by limiting the size of benefits for spouses and children of high-income earners; and
- Treat all workers fairly when their Social Security benefits are calculated by using the same, proportional formula that looks at all of an individual’s earnings over the course of his or her career.
Full text of the legislation is here.Earlier this year, Congressman Reid Ribble (R-Wisconsin) introduced the Save Our Social Security Act in order to make Social Security solvent for another 75 years.