New proposed rule sets a “floor” for social security benefits at 25% above the poverty level, among other pro-claimant recommendations.
Congressman John Larson of Connecticut is again making the rounds with Social Security 2100, a set of proposals he has been making for a few years to both protect the Fund and to ensure the meaningfulness of the benefits for our lowest earning neighbors:
- Immediate increase in Social Security benefits equal to about 2% of the average benefit amount.
- Adoption of a new way to adjust for inflation for determining annual cost-of-living adjustments to benefit payments, based on the CPI-E, an inflation benchmark that incorporates goods and services that are more appropriate for the older and low income Americans.
- A minimum benefit set at 25% above the federal poverty line to ensure that low-income workers avoid poverty in retirement.
- Higher income thresholds for tax-free benefits, with the income levels at which a portion of Social Security can become included in taxable income rising from $25,000 to $50,000 for single filers and from $32,000 to $100,000 for joint filers.
- Collection of Social Security payroll taxes on wages and self-employment above $400,000 ($132,900 currently).
phase-in of higher payroll tax rates for Social Security, which would eventually take the current level of 6.2% up to 7.4% by 2042.
The bill would ensure that any increase in benefits under its provisions wouldn’t affect eligibility for other key federal programs, including Supplemental Security Income, Medicaid, and the Children’s Health Insurance Program.