President Joe Biden is taking steps to address the impending financial challenges facing Social Security.
Biden’s Four-Point Strategy
With the Social Security Old Age and Survivors Insurance Trust (OASI) projected to run out of funds by 2033 and a staggering $22.4 trillion deficit revealed in the 2023 Trustees Report, the President has unveiled a four-point strategy to strengthen the trust’s finances.
Proposed Changes to Payroll Tax
One crucial, and potentially controversial, aspect of President Biden’s plan involves changes to the payroll tax. Currently, a 12.4% payroll tax is applied to earned income up to $160,200, with earnings above that threshold being exempt from OASI taxes.
Taxing the Rich
Under Biden’s proposal, the payroll tax would be imposed on income exceeding $400,000, leaving wages between $160,200 and $400,000 untaxed. The shift primarily targets high earners and corporate executives with retirement savings well above the average American.
Social Security Benefits
Social security benefits are adjusted annually to account for inflation through Cost of Living Allowance. However, the current calculation uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, which may not accurately reflect the expenses faced by retirees.
President Biden’s Plan
President Biden’s plan suggests transitioning to the Consumer Price Index for the Elderly, which could provide more accurate adjustments and inject additional funds into the pockets of retired individuals dealing with financial challenges.
Elevating the Primary Insurance Amount
The Primary Insurance Amount (PIA) determines the amount of Social Security benefits. Biden’s proposal includes elevating the PIA for Americans aged 78 to 82, aiming to assist those facing escalating costs in their later years, particularly healthcare expenses. This change could benefit a substantial portion of retirees.
The Minimum Benefit
Individuals with lower wages receive a special minimum benefit from Social Security, regardless of their earnings during their working years. Currently, a lifetime low-earning worker would receive approximately $12,402 in annual Social Security benefits.
A Substantial Raise
President Biden intends to raise the minimum benefit to 125% of the federal poverty level for individuals. In practical terms, this enhancement would mean a monthly earning of $1,518.75 for those receiving the special minimum benefit in 2023.
Challenges in Approval
While President Biden’s plan offers comprehensive solutions to bolster social security, it faces significant hurdles in securing approval. Achieving a comprehensive reform requires bipartisan cooperation, which has proven challenging. Democrats and Republicans have yet to find common ground on strategies to strengthen funds and enhance benefits for those most in need.
The Internet Responded
News of Biden’s plan was shared across the internet and opinions were divided. Some people were happy about it, others claimed it was unnecessary, some people claimed it was unfair, and some people offered alternative solutions to the problem.
Some Thanked Biden
One individual said: “Thanks, Joe! For lowering prescription drug prices, helping college students with the unnecessary burden of a bad loan, strengthening NATO, and building friendships with our allies. Everything the Trump crime family couldn’t do.”
Dominated by Debate
Comment sections were dominated by debate. “Absolute radical left nonsense. Absolutely delighted that this idiot won’t be in power for much longer,” one person said. “If you think this is radical, I hate to imagine the day you meet an actual leftist,” another replied.
Some Doubted the Plan
Some people doubted Biden’s plan and claimed to have read reports backing up their view. One individual said: “I’ve read several financial reports that say this won’t do a thing. The added taxation is eaten up by his giveaways so the fund still goes broke.”
An Alternative Plan
Some commenters suggested alternative, more creative ideas. One person said: “A far better plan would be to take all of Congress – past and present – off their gold-plated retirement, along with current and past presidents and career government employees. Put them all on social security at age 70 at the same rate that we get.”
The Military Budget
Commenters kept the alternative plans coming – and some were quite thought-provoking. “Or, I don’t know, reduce our ridiculous and necessary military budget and use that money to help. Seems like the most obvious idea to me,” one individual wrote.
It’s All on Congress
Some people looked to the past. One person said: “Does anyone remember that President Reagan signed an IOU and handed it to the Treasurer of the United States of America? He then transferred the SS from that year to the general budget – and he did it the next year and the next. As did George Bush and Bill Clinton but no one will admit how much money the IOUs are worth. I don’t think [the] problems are lack of money. It’s all on Congress.”
Tell the Government to Make It Happen
Others doubted the idea that money would run out. “We will never run out of money for social security. So why do they keep threatening it will run out? We need a law that says before anything else, social security will be paid. So tell the government to make it happen and stop threats,” one person said.
Pay Back What Is Owed
People called for the government to pay back what was owed. “Over the years, the government has ‘borrowed’ [a lot] from SS, yet they have made no effort to repay that money and keep telling us how SS is going broke. They send billions to other countries, and they want to pay off $20,000 per student of student debt but can’t pay back what they owe SS. Make it make sense,” one individual wrote.
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