Legislation to strengthen Social Security by making the wealthiest Americans pay the same payroll tax that nearly everyone else already pays was introduced Thursday by Sen. Bernie Sanders. Senate Majority Leader Harry Reid cosponsored the Senate bill. Rep. Peter DeFazio introduced the companion measure in the House. He joined Sanders at a news conference in the Capitol to discuss their bill to bolster Social Security without raising the retirement age or lowering benefits.
“Social Security is the most successful government program in our nation's history. Through good times and bad, Social Security has paid out every benefit owed to every eligible American,” Sanders said. “The most effective way to strengthen Social Security for the future is to eliminate the cap on the payroll tax on income above $250,000 so millionaires and billionaires pay the same share as everyone else.”
Reid said, “I want to thank Sen. Sanders for his outstanding leadership in support of Social Security and the millions of Americans who rely on the program. His legislation should make people think twice before assuming that the only way to strengthen Social Security is to take away benefits that seniors have earned, or raise taxes on the middle class.”
DeFazio added, “Despite the hype, Social Security is not now, and never was, the cause of our deficit. Those spreading these false claims are the same people who have for years been working with Wall Street to privatize the program. We shouldn’t cut benefits or try to balance the budget on the backs of seniors who have earned these benefits. We can just close a tax loophole that allows millionaires and billionaires to pay a lower percentage of their income into Social Security than everyone else.”
In addition to Majority Leader Reid, the Senate measure is cosponsored by Sens. Patrick Leahy, Barbara Boxer, Amy Klobuchar, Sheldon Whitehouse, Al Franken and Richard Blumenthal.
Under their legislation, those with yearly incomes of $250,000 or more would pay the same 6.2 percent payroll tax already assessed on those who earn up to $113,700 a year. Applying the Social Security payroll tax on income above $250,000 would only affect the wealthiest 1.3 percent of Americans, according to the Center for Economic and Policy Research. Social Security officials say that simple change would yield about $85 billion a year to keep the retirement program strong for at least another 50 years.
The legislation is based on a proposal that President Barack Obama made in 2008 during his first campaign for the White House. (Watch the video.)
Since it was signed into law 77 years ago, Social Security has kept millions of senior citizens, widows, widowers, orphans, and the disabled out of poverty. Before Social Security, about half of senior citizens lived in poverty. Today, less than 10 percent live in poverty and more than 55 million Americans receive retirement or disability benefits.
The most successful government program in our nation's history has not contributed to the federal deficit. It has a $2.7 trillion surplus, and it can pay out every benefit owed to every eligible American for at least the next 20 years, according to the Social Security Administration.
To read the bill, click here.
For a fact sheet, click here.