Bill Overview
Title: Social Security Expansion Act
Description: This bill increases benefits and certain taxes related to the Social Security program. Changes to benefits include (1) increasing the primary insurance amount for certain beneficiaries; (2) revising the method of calculating cost-of-living adjustments; (3) establishing a new minimum benefit for certain low earners; and (4) allowing certain children of retired, deceased, or disabled workers to receive benefits until age 22 if they are a full-time student. Changes to taxes include (1) increasing the net investment income tax and making active trade or business income subject to this tax; and (2) extending payroll taxes on wages, salaries, and self-employment earnings to income above $250,000 (the maximum amount subject to the Social Security payroll tax is currently $147,000 for 2022). The bill also combines the existing Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund into a single Social Security Trust Fund.
Sponsors: Rep. DeFazio, Peter A. [D-OR-4]
Target Audience
Population: People receiving or contributing to Social Security
Estimated Size: 70000000
- Social Security benefits are received by retirees, disabled persons, and surviving family members of deceased workers.
- The increase and adjustments in benefits will directly impact current and future beneficiaries of Social Security around the world.
- Modifications to taxation will affect high-income earners both directly in the US and indirectly through global financial markets.
Reasoning
- The target population includes retirees, low-income beneficiaries, high-income earners impacted by new taxes, and students who might now benefit under extended rules.
- The impact of the policy will vary: low-income individuals may experience immediate benefits due to increased minimums and COLAs, while high-income earners might initially feel a negative impact from increased taxes.
- A portion of the budget will need to cover administrative costs, which limits the direct financial increase to each recipient, hence not everyone in the 70 million target population sees a major change.
- Individuals not directly impacted include those with no Social Security access (non-retirees, low-income non-earners, or non-contributing roles). Some people will see no change if they are under the tax increase threshold.
Simulated Interviews
Retired school teacher (Los Angeles, CA)
Age: 67 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 14/20
Statement of Opinion:
- I'm glad to see that the benefits will be adjusted more fairly to match living costs.
- This helps ensure my savings last through retirement.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Investment banker (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The increased taxes are going to reduce my take-home pay, which is frustrating.
- Though I understand the benefits for others, it's a significant impact for high earners like myself.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Full-time student (Austin, TX)
Age: 20 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- I'm relieved I can continue to receive benefits while in college.
- This policy gives me more financial security through my degree.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 7 | 3 |
| Year 3 | 4 | 3 |
| Year 5 | 4 | 3 |
| Year 10 | 4 | 3 |
| Year 20 | 4 | 3 |
Manufacturing worker (Fargo, ND)
Age: 59 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- Knowing there might be increased benefits options as I retire is reassuring.
- The new minimum benefits are a big help for workers like myself.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 6 | 4 |
Retired nurse (Miami, FL)
Age: 75 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- The benefit increase will help cover my medical costs better than before.
- Living on fixed income is tough with rising prices; this act helps.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 3 |
| Year 10 | 5 | 2 |
| Year 20 | 4 | 2 |
Software engineer (Denver, CO)
Age: 33 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 8/20
Statement of Opinion:
- I'm not directly impacted by this policy immediately.
- I think it's a fair trade-off for broader societal benefits.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Freelancer (Seattle, WA)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- My contributions to the system could increase, but the actual benefits seem distant.
- For now, any policy impact feels minimal to me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Small business owner (Chicago, IL)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- The increased taxes on my income can impact my business's bottom line.
- Though the policy's benefits increase for future is good, balancing current budget is tough.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Retired auto worker (Columbus, OH)
Age: 64 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 11/20
Statement of Opinion:
- Improvements to Social Security are needed, and I hope they prioritize health-related needs.
- This policy promises a good change in my benefit calculations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Data analyst (Atlanta, GA)
Age: 39 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- The policy doesn't drastically change my situation now.
- But it might affect tax strategy and future retirement plans, so I'm cautious.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Cost Estimates
Year 1: $10000000000 (Low: $9000000000, High: $11000000000)
Year 2: $11000000000 (Low: $10000000000, High: $12000000000)
Year 3: $12000000000 (Low: $11000000000, High: $13000000000)
Year 5: $14000000000 (Low: $13000000000, High: $15000000000)
Year 10: $16000000000 (Low: $15000000000, High: $17000000000)
Year 100: $22000000000 (Low: $20000000000, High: $24000000000)
Key Considerations
- The balance between increased benefits and revenue generation through taxes will determine the long-term sustainability of the Social Security Trust Fund.
- Revisions in cost-of-living adjustments can significantly influence the future financial outlook.
- Possible impacts on higher income earners' behavior, such as changes in investment or labor supply.