The bill in Congress aims to keep Social Security beneficiaries out of poverty

Many Americans have trouble covering their living costs with Social Security-only income.

Now, a bill has been reintroduced in Congress aimed at reducing the risk that Americans, women, and older people of color may live in poverty despite receiving their monthly checks.

The proposal, called the Social Security Improvement and Protection Act, was introduced by Rep. Gwen Moore, D-Wis., This week.

The measure aims to improve benefits in three ways.

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First, it would update what is called the special minimum benefit (a land for low-income people) to 100% of the current poverty level. This would apply to people who have paid Social Security for at least 30 years and apply for benefits when they reach full retirement age (usually 66 or 67, depending on when they were born). . Benefits would be adjusted so that workers with at least 10 years of work but less than 30 would also be eligible.

In addition, Moore is asking for child care credits to be applied for the program’s future eligibility for parents of children under 6 years of age. These parents will receive a credit for each year that a minor child of this age is at home, for a maximum of five years. This time will count for the 30 years required for the special minimum benefit.

The bill also proposes to increase monthly checks for all beneficiaries by 5% once they have been retired for 20 years. This increase would start gradually when the beneficiaries have reached 16 years of eligibility.

Student benefits would be extended to the children of dead and disabled workers, so that they could continue to receive money until the age of 26 as long as they are college or vocational school students. Currently, benefits are only paid for children up to 18 years old.

Moore’s plan also requires changes to help pay for extended benefits.

This includes the phasing out of the Social Security payroll tax cap, which currently only applies to salaries of up to $ 142,800.

At the same time, the plan also requires gradually increasing the rate at which both employers and employees pay this tax at 6.5%, from the current rate of 6.2%, over six years.

“My proposal would help us ensure that Social Security does what it was meant to do: protect all older Americans from spending retirement living in deep poverty,” Moore said in a statement.

Other Social Security proposals from Democrats have also tried to establish a minimum benefit to help keep people out of poverty.

This includes five of the platforms of Democratic presidential candidates in the last election: President Joe Biden, Transportation Secretary Pete Buttigieg, Sen. Amy Klobuchar of Minnesota, Sen. Bernie Sanders of Vermont and Sen. Elizabeth Warren of Massachusetts.

Those plans materialized more than in the previous presidential election, where Hillary Clinton’s platform was limited to setting up caregiver credits, said Karen E. Smith, a senior member of the Urban Institute, a Washington think tank. , DC.

Representative John Larson, D-Conn., Has also introduced a bill aimed at increasing profits.

In particular, these other proposals set most of the minimum benefits at 125% of the federal poverty level, rather than 100%.

One of the problems with the proposals is the degree to which poverty is addressed, Smith said. For example, only new beneficiaries could have access to the higher minimum benefits. At the same time, if a 20-year increase is put in place, it could skew toward higher-income people because they tend to live longer, he said.

While these plans demand increasing benefits for some beneficiaries, they also aim to address the program’s solvency issues, albeit to varying degrees.

Because Social Security trust funds are about ten years away, at which point profits will be cut, “they have to deal with it,” Smith said of Washington leaders.

“It’s really a debate in Congress that we need to have and that hasn’t happened,” Smith said.

Meanwhile, measures can be taken to eradicate poverty at a relatively low cost.

“No matter how you want to redistribute benefits, you can eliminate poverty, and even if future cohorts end up having higher profits than current beneficiaries,” Smith said.

It is true that passing Social Security legislation in the near future may be out of reach.

But another change: reforming the provision of supplementary security income – would be easier for Congress to pass now and would inevitably help the poor to whom these benefits are intended, Smith said.

In 2021, the maximum monthly SSI benefit is $ 794 per person, or $ 1,191 per married couple, where both people meet the requirements for the program.

A Senate bill calls for these monthly benefits to be increased to 100% of the federal poverty level, which would result in a 31% increase in income.

“Increasing SSI benefits really helps poor people,” Smith said. “That would be a big improvement.”