Senators Introduce Bill to Strengthen Social Security

U.S. Senator Bernie Sanders (D-Vermont) has introduced legislation designed to keep the social security program sound for another 75 years.

The Keeping Our Social Security Promises Act would eliminate the cap subject to payroll taxes on earned income above $250,000. Currently, workers owe a payroll tax of 6.2% of a wages up to $106,800 a year, and the bill would add that obligation to those earning over $250,000.  

According to a fact sheet on Sanders Web site, the “donut hole” in the payroll tax from $106,800 to $250,000 is because the sponsoring legislators wanted to make sure that Social Security is strengthened without raising taxes on anyone making less than $250,000 or cutting benefits. In addition, the fact sheet notes this legislation is what President Obama proposed when he campaigned for President in 2008.  

According to a September 7, 2011, letter from Steve Goss, the Chief Actuary of the Social Security Administration: “Assuming enactment, the [Social Security] program would be expected to be solvent for the next 75 years … The assets in the combined [Social Security Trust Fund] would be positive throughout the 75-year period, meaning that solvency would be expected throughout the period … For the 75-year long-range period as a whole, the present-law unfunded obligation of $6.5 trillion in present value is replaced with a positive trust fund balance of [$40 billion] in present value through the end of the period.”  

U.S. Representative Peter DeFazio (D-Oregon) has introduced similar legislation in the House.  

More about the bill is available here.