Some members of Congress are advocating for a new law that would expand Social Security benefits by $2,400 per year. The proposed bill, the Social Security Expansion Act, also aims to secure the program’s funding for the next 75 years by imposing a payroll tax on higher-income workers.
Social Security is facing a funding crisis that could result in a shortfall by the mid-2030s. Millions of retirees depend on these benefits as their primary source of income, yet many argue that the cost-of-living adjustments (COLA) fail to keep pace with inflation. With rising expenses for groceries, housing, and healthcare, seniors are struggling to make ends meet.
The bill was introduced by Senator Bernie Sanders (Independent, Vermont), Senator Elizabeth Warren (Democrat, Massachusetts), Representative Jan Schakowsky (Democrat, Illinois), Representative Val Hoyle (Democrat, Oregon).
A $2,400 annual increase in Social Security benefits
Funding the program for 75 years by applying a payroll tax on income above $250,000.
Only 9% or fewer of American households would see a tax increase to support this plan.
Currently, the bill has been cosponsored by nine Democratic senators and 17 House members.
Before Social Security was established under President Franklin D. Roosevelt in the 1930s, nearly 50% of seniors lived in poverty. Thanks in part to these benefits, the senior poverty rate has dropped to 9.7% today.
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On average, Social Security beneficiaries receive $1,838 per month, with 40% of seniors depending on it as their primary income source. 1 in 7 seniors relying on it for 90% or more of their income.
If passed, the bill could help stabilize Social Security’s future funding and provide much-needed financial relief for retirees. However, Republican opposition may present a significant challenge.
Financial analyst Thompson explains:
“This is a positive step toward securing Social Security long-term. But will it pass? That’s another story. Republicans are focused on spending cuts and extending tax cuts, rather than increasing taxes. So, it’s far from a done deal.”
While Congress debates this proposal, seniors are encouraged to diversify their retirement plans beyond Social Security to ensure financial stability in the future.
