Once again politics, not reality drive efforts to shore up Social Security. Half a loaf is not better. Social Security 2100 was a good idea, A Sacred Trust is not. Politicians always want to give, but never tell the truth about taking – from taxpayers.
A Sacred Trust is more buying votes from uninformed Americans.
Lawmakers may soon consider Social Security Subcommittee Chairman John Larson’s (D-CT) Social Security 2100: A Sacred Trust (A Sacred Trust), a bill designed to expand Social Security benefits and prevent trust fund insolvency in 2034.
Unfortunately, the bill is a substantial downgrade from 2019’s Social Security 2100 Act (SS2100), which we’ve praised as a responsible solution to Social Security’s financial troubles. Whereas SS2100 would have restored the program to sustainable solvency, A Sacred Trust would close half the solvency gap on paper and would actually worsen solvency once gimmicks are removed.
The previous version of Social Security 2100, introduced in 2019, would generate enough new revenue to restore solvency and expand benefits. The legislation would subject earnings over $400,000 to the payroll tax while also gradually raising the payroll tax rate from 12.4 percent to 14.8 percent. In addition to closing the program’s financial shortfall, the funds would finance a stronger minimum benefit, larger cost-of-living adjustments, and reduced taxation of benefits. We praised the bill at the time as “the only legislation introduced this Congress that would assure a lasting fix to Social Security by restoring the program to sustainable solvency” and described it as “an important and responsible starting point for discussion.”
Unfortunately, A Sacred Trust is not worthy of similar praise. The new legislation removes nearly half of the solvency-improving revenue from the original bill, while dramatically expanding new spending — but making that spending temporary to cover up the costs.
Specifically, the new legislation removes adjustments to the payroll tax rate — which were responsible for closing two-thirds of the solvency gap — while adding eight new benefit expansions that would further increase benefits for disabled workers, spouses, young adults, and the very old.
To obscure the cost of its benefit expansions, the legislation would set them all to expire after five years.
On paper, A Sacred Trust would close half of the solvency gap, while SS2100 closed the full solvency gap. Assuming the five-year benefit expansions are made permanent, as clearly intended, we estimate they would consume more than all of the revenue increases. In fact, a permanent version of A Sacred Trust would actually worsen solvency. Accounting for interactions with the income tax, it would also increase the national debt.
Take a look at what “Social Security 2100 A Sacred Trust” will do. But if you want a hint of the political pandering just read this:
Have millionaires and billionaires pay the same rate as everyone else –Presently, payroll taxes are not collected on an individual’s wages over $142,800. This legislation would apply the payroll tax to wages above $400,000 so the wealthy pay the same rate as someone earning $50,000 a year. This provision would only affect the top 0.4% of wage earners.
Millionaires and billionaires? What nonsense ‼️ Warren Buffet’s salary is $100,000 a year. The original Social Security 2100 legislation called for a gradual increase in the payroll tax percentage as it should be.