Pass the Social Security Expansion Act

The Social Security Expansion Act (S.770 and H.R.1700) aims to restore benefits and ensure financial stability for the next 75 years.

The Social Security Administration will have funds to pay benefits as long as people keep working. However, in nine years, the monthly income from FICA taxes will fall short of covering the benefits it needs to provide.

If Congress does not act, there could be a 23 percent cut in benefits by 2033. Congress has known about this problem for many years but has not addressed it.

The Expansion Act fixes the funding issue

It extends the FICA tax to incomes exceeding a quarter million dollars. The first change is that the Social Security Expansion Act will reinstate the FICA tax on W2 income starting at $250,001. In 2026, the wage limit for Social Security collection is $184,500 (this amount is adjusted annually). More than 91 percent of households will not see any increase in this tax.

The wealthy must pay their fair share

The second change ensures everyone contributes fairly. Wealthy people often evade the FICA tax by receiving payments not reported on a W2. This new bill mandates that the rich pay the same 12.4 percent on investment and business income exceeding a quarter million dollars. This ensures that everyone contributes fairly to Social Security.

The Act restores lost benefits

It increases benefits by $200 a month to compensate for inadequate cost-of-living adjustments (COLAs). The Consumer Price Index, currently used to adjust seniors’ benefits for inflation, does not accurately reflect what seniors buy. Consequently, their purchasing power has diminished over time. This adjustment aims to restore that purchasing power.

This law ensures future Cost-Of-Living-Adjustments (COLAs). It aims to better reflect how seniors spend their money by using the Consumer Price Index for the Elderly (CPI-E). Older adults allocate a larger share of their income to health care and prescription medications, which will be factored into the COLA calculation.

It reinstates educational benefits for student survivors up to the age of 22. College student survivors began receiving benefits under Social Security in 1965, thanks to Congress. This allowed unmarried children of deceased, disabled, or retired parents to receive payments until they turned 22, provided they were enrolled in full-time education. However, this program was discontinued in 1981. This Act revives the program.

Why it matters

Social Security is an effective program that taxes both workers and employers to offer insurance for workers in cases of disability, retirement, and early death. Its simplicity is commendable.

The Social Security Expansion Act is also a clear solution that keeps specific tax income designated for a specific purpose; it does not require any funds from federal tax revenues and does not impact the federal debt.