Even with the tax on top earners, Mr Biden’s proposal would only buy the program five more years of solvency, according to the Urban Institute analysis, although it would mitigate the benefit cuts that would be necessary if other changes were not made.
Mr Biden’s political advisers, however, said the proposal was somewhat of an opening offer. “The Vice President’s funding proposal shows how he would protect and increase benefits for all Social Security recipients while making a down payment on long-term solvency,” said Gene Sperling, external advisor to Mr. Biden and former national economic adviser to Presidents Bill Clinton and Barack Obama.
Almost every American has something at stake, or someone close to them does: about 178 million workers contribute to the program, and this year about 45.8 million retirees will receive nearly $ 70 billion in benefits. – the average monthly check is about $ 1,500 per month, according to the Social Security Administration.
Under current law, pension benefits can only come from the trust fund, which will be depleted by 2034, according to Social Security Administration estimates that do not take into account the pandemic. At this point, the taxes collected will be sufficient to pay only 76% of the benefits. (A September Congressional Budget Office report predicted trust funds would run out in 2031; others, including the Bipartisan Policy Center, predict it may be sooner.)
The cost of inaction is serious, Akabas said, because as insolvency draws closer, the changes needed will become more and more painful – tax increases will have to be bigger, cuts more severe. “The longer we wait to resolve the problem,” he said, “the fewer people there are who can play a role in the solution.”
About half of the population 65 and over live in households that receive at least half of their income from Social Security, according to a 2017 study published in the Social Security Bulletin. About 25 percent of elderly households depend on Social Security for at least 90 percent of their income.
Joyce Welch, a 73-year-old retiree in Sacramento, lives on Social Security alone. A single mother who raised two sons, she worked full time for most of her life. But her health began to decline around 15 years ago due to an undiagnosed autoimmune disease, and within a few years she had to retire from her job as a site supervisor and family consultant at a health center. support for informal caregivers in Los Angeles.