Democratic Senator Tom Harkin of Iowa is introducing legislation that seeks to strengthen Social Security benefits while increasing revenues for it. His Strengthening Social Security Act of 2013 has the following features:
- Strengthen Benefits by Reforming the Social Security Benefit Formula: To improve benefits for current and future Social Security beneficiaries, the Act changes the method by which the Social Security Administration calculates Social Security benefits. This change will boost benefits for all Social Security beneficiaries by approximately $70 per month, but is targeted to help those in the low and middle of the income distribution, for whom Social Security has become an ever greater share of their retirement income.
- Ensure that Cost of Living Adjustments Adequately Reflect the Living Expenses of Retirees: The Act changes the way the Social Security Administration calculates the Cost of Living Adjustments (COLA). To ensure that benefits better reflect cost increases facing seniors, future COLAs will be based on the Consumer Price Index for the Elderly (CPI-E). Making this change to Social Security is expected to result in higher COLAs, ensuring that seniors are able to better keep up with the rising costs of essential items, like health care.
- Improve the Long Term Financial Condition of the Trust Fund: Social Security is not in crisis, but does face a long-term deficit. To help extend the life of the trust fund the Act phases out the current taxable cap of $113,700 so that payroll taxes apply fairly to every dollar of wages.
These measures would make the trust fund viable through 2049 and is the way we should go, rather than finding ways to cut benefits, which is the current predominant thinking among Republicans (of course) but also disturbingly in the White House and among some Democrats in Congress.
Harkin and Ohio’s Sherrod Brown are pushing for this, likely as a way to counter moves to cut benefits as part of some ‘Grand Bargain’.