More than 63 million Americans rely on Social Security, which has played a key role for 84 years in helping ensure retirement security.
Social Security is funded through a dedicated tax known as the payroll tax. The employer pays 6.2 percent and the employee pays 6.2 percent. This money comes out of our paychecks and goes into the Social Security trust fund.
Under the current Social Security system, there is a maximum amount of wages that is subject to the payroll tax. For 2020, that maximum is $137,700, which means that employees do not have to pay a tax on any earnings above the current limit of $137,700.
While the majority of recipients are retirees, Social Security also benefits those with disabilities who are unable to work.
As the number of recipients increases, the fund was projected to become insolvent, or unable to provide full benefits to retirees, by 2035. However, the COVID-19 pandemic is likely to worsen the situation largely through depressing payroll tax revenue.
For these reasons, the outcome of the 2020 Presidential election is crucial to the program’s future. Here are the candidates’ stances on Social Security.
Former Vice President Joe Biden supports expanding Social Security and has opposed efforts to privatize the program.
To help ensure the fund’s solvency, Biden has proposed to eliminate the income cap on Social Security taxes and require that all wages earned would be subject to the payroll tax. He has also proposed a higher payroll tax rate for those who make more than $400,000.
He has also proposed a 5 percent increase in Social Security benefits for retirees or those with disabilities who have been collecting benefits for 20 years or more, to help preserve the purchasing power of older retirees.
Biden’s plan would also set a minimum benefit so that all workers who put in 30 years of work would be guaranteed a benefit equal to at least 125 percent of the federal poverty level.
The plan would also increase survivor benefits for widows and widowers by about 20 percent more each month.
Biden also proposed lowering the Medicare eligibility age from 65 to 60, which would potentially extend Medicare to an additional 20 million Americans.
President Donald Trump recently signed an executive order allowing employers and workers the option
to delay paying the payroll tax until 2021 when all past payments must be caught up. At that time, the missed payments will be due.
Trump has also said that if he is re-elected, he will permanently repeal the payroll tax and fund Social Security with other revenues not yet disclosed. This lack of specifics is troubling for workers whose retirement security is based on Social Security.
A recent report by the chief actuary of the Social Security Administration noted that without the payroll tax and without an alternative funding source, the Social Security trust fund would be depleted by 2023.
While he had earlier indicated that he would not consider cuts to Social Security, federal budget proposals have repeatedly aimed to reduce Social Security expenditures, citing inefficient spending. The administration had also proposed a rule for Social Security Disability recipients that would require them to provide additional information supporting their ongoing claims for benefits every two years.
Trump also supports work requirements and other limitations on Medicaid eligibility, as well as placing spending caps on Medicaid and converting the program to block grants.
CSEA Retiree Executive Committee Chair Millie Lucas said that Biden’s plan for Social Security aligns better with the interests of retired union members.
“As union workers who worked hard to earn our Social Security benefits, we want to ensure that the fund is preserved for all workers in the future, and we have our doubts that the President’s plan would do so,” Lucas said. “We very much support the Biden plan to strengthen Social Security and provide increased benefits to retirees.”
