During the election cycle of 2016, promises were made by presidential candidates regarding social security. In particular, Donald Trump went on the record stating that he would not make changes to policy unless it were necessary. This week, a bill was proposed by Texas Representative Sam Johnson that aims to bring sweeping reform to the retirement program. Many believe that it is possible that this may find its way to the future president’s desk.
The legislation is supposed to address concerns that the current system is unsustainable in the long run. This flies in the face of pledges made by Trump to boost social security by stimulating revenue streams that will provide its funding. His plans are to revitalize the economy through a mixture of reworking trade agreements, cutting taxes, and by encouraging job growth.
It has been said that at the current rate of spending that the administration will run out of its sum of over $2.8 trillion by 2034. If this happens, it will lead to drastic cuts by as much as 21 percent, and even this new measure would only keep the monthly payouts coming until 2090. It is thought by some that Trump may have to alter his projected plans and that he may need to arrive at a compromise with lawmakers.
The bill is 54 pages long and is formally known as the Social Security Reform Act of 2016. Contained within its pages is the mandate that the retirement age for receiving full monies will increase to 69 years in 2030. It also aims to raise the cost of living adjustments for lower-income people while eliminating hikes for couples earning more than $170,000 beginning in 2018. The figure for single Social Security recipients is $85,000.
Changes to the existing tax structure would occur as well. Currently, payouts received are taxed if annual income exceeds $25,000 for someone single or is over $32,000 on those who are married. Under this proposal, taxes would no longer be collected on those making less than $92,500 or $185,000 jointly, and by 2054, the practice of collecting taxes on benefits would be phased out altogether. A cap would be placed on the spouses and offspring of the disabled and of those who earned higher incomes, and it would raise the total due to people who had worked their entire lives at a very low wage. It remains to be seen how lawmakers will vote on this proposition.