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The pandemic placed the spotlight on the importance of Social Security and what it means to older Americans, who were among the hardest hit these last 21 months.
It’s one of the reasons why Congress needs to act to enhance the program, said Rep. John Larson, chairman of the House Ways and Means Social Security Committee.
Earlier this year, Larson reintroduced legislation he has been working on for years called “The Social Security 2100 Act: A Sacred Trust,” and had a hearing for the proposal in December. It will face a markup by Congress in the new year, he said. Another Social Security proposal, introduced by Rep. Al Lawson earlier this month, also attempts to fix and improve the program.
See: Seniors get the biggest Social Security raise in years — and it’s already been eaten up by inflation
The bill, if passed, has numerous provisions to improve Social Security, which is currently facing insolvency. Some include increasing the minimum benefit for low-income retirees, switching the consumer-price index benefits are currently tied to so they reflect the expenses of the elderly, and offering caregiver credits for people who leave the workforce to care for loved ones. Funding would derive from expanding the payroll tax cap on workers who earn more than $400,000, and phasing in workers between the current inflation-adjusted cap of $142,800 and $400,000 over the years.
Larson spoke to MarketWatch about the urgency to pass this bill.
(This interview was edited for clarity and length.)
MarketWatch: What makes this proposal so promising for improving Social Security for Americans?
John Larson: What makes it so promising is that we have a president who understands that Social Security is a sacred trust. We have to demonstrate that when we hear the overwhelming concern of our constituency, that we are able to translate those concerns as it relates to Social Security.
It is more than just providing a pension. It is one of the No. 1 antipoverty programs for seniors, for children and for veterans, who rely on Social Security more than Veteran Affairs.
People like to ask me, what’s different about this year’s proposal? We have a president who is behind the proposal, who has put in his own reforms. We are quite excited by this prospect. We thought we got off to a good start with critical witnesses and are now looking forward to a markup when we return in January.
MW: There are many provisions in this proposal — they all have their benefits, but are there any that you think would have the greatest impact on Americans?
Larson: The greatest impact would be lifting more than five million people who worked their whole lives and paid into the system. To make the new floor for minimum benefits 125% of what the federal government establishes as the poverty line. No one will be out running to buy stock options.
Then a COLA (cost-of-living adjustment) that keeps pace with the expenses of people in their old age and not generally on the consumer-price index.
These are all modest proposals but it makes a difference between sustenance and survival or continued despair and poverty. You can’t deny the fact that it has been 50 years since any kind of enhancement [to Social Security]. A lot more needs to be done for Social Security and its long-term solvency, but this deals with over 50% of the shortfall.
Also see: Social Security proposal would raise revenue and temporarily enhance benefits
MW: Some critics take issue with funding the changes. Other researchers have said this is a temporary fix. What do you say to that?
Larson: They are only temporary if Congress decides they’re temporary.
All polling data show even if it meant personally for [Americans] to pay more into the system, they know the value of a guarantee and that’s the real difference.
You can argue you can make more money if you privatize it. Can you imagine if they had been successful in privatizing Social Security in 2006, and then the Great Collapse in 2008, when people saw their 401(k) become a 101(k) — what that would have meant and the devastation that would have occurred? [With Social Security], no payment was missed. That was the genius of the program. It is a guarantee. What Roosevelt understood is we have to protect people from the vicissitudes of what can happen.
This is just a matter of trying to level the playing field and close the gap, and do this in a common sense fashion so that people again understand their government has their backs. This is a sacred trust.
All the provisions are paid for within a 10-year budget window. It will require Congress to act. The public wants to see how you’re voting on these issues, and overwhelmingly Democrats, Republicans and independents support this notion. This is a first step but it is a big first step in what it does.
MW: This isn’t the first time you’ve introduced this proposal. What pushback have you gotten, and why have you continued to persevere each year?
Larson: I persevere each year because how can you go home and face your constituents and see what they’re going through in regard to the pandemic? Just for example, who has the pandemic hit the hardest? The elderly. Of the more than 700,000 people who have perished, 82% of them are seniors.
Congress hasn’t done anything in 50 years [for Social Security]. Suffice it to say, a lot has changed. We are still dealing with a cut that was enacted in 1983 that will take effect in January 2022 when the age for Full Retirement Age is raised again to 67. As Martin Luther King, Jr. would say, the fierce urgency of now is upon us. This is not the time for incrementalism. This is the time to act and vote.
