Dems Release Plan to Boost Social Security by $2,400 a Year

Plus, Rick Scott drops tax plan that drew attacks ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Good Thursday evening. The House committee investigating the January 6 insurrection at the Capitol is set to begin its first in a series of public hearings at 8 p.m. ET tonight laying out its findings. “The committee plans to detail their findings of what they say was a months-long Republican conspiracy to overthrow Joe Biden’s legitimate election victory, led by President Donald Trump,” The Washington Post [reports](. The hearing will be televised live by all the major broadcast and cable news networks except for Fox News, and you can stream it [at the committee’s website]( its [Youtube channel]( or at many major news sites, so you have plenty of viewing options. Here's what else is going on. Sen. Bernie Sanders (Reuters) Save Social Security by Taxing the Rich? Democrats Have a Plan The Social Security trustees announced last week that the program’s trust fund will be depleted in 2035, at which point benefits would be cut by 20%, assuming Congress does nothing to alter its current fiscal trajectory. A group of Democratic lawmakers led by Sens. Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) reintroduced legislation Thursday that would do just that, with a plan they say would fully fund Social Security for 75 years while boosting benefits by $2,400 annually for most participants. The Social Security Expansion Act would pay for that increase in benefits by applying the current payroll tax of 12.4% to incomes over $250,000 — a big change from the current system, in which the payroll tax is capped at the first $147,000 in income. The proposed change would affect about 7% of taxpayers. The plan also calls for improving the way inflation is measured for the annual cost of living adjustments. “At a time when half of older Americans have no retirement savings and millions of senior citizens are living in poverty, our job is not to cut Social Security,” Sanders said. “Our job must be to expand Social Security so that every senior citizen in America can retire with the dignity they deserve and every person with a disability can live with the security they need. And we will do that by demanding that the wealthiest people in America finally pay their fair share of taxes.” Sanders for years has called for raising the payroll tax cap, and some version of that approach is supported by dozens of Democratic lawmakers, including key centrist Sen. Joe Manchin (D-WV). But whatever the merits of the plan, it has no chance of becoming law since it is opposed by virtually all Republicans, who typically want to include benefit cuts in any plan that fixes the program’s finances. “Senator Sanders makes a wonderful plea, which many, many people agree with — the need for helping our seniors and providing better benefits for them and so forth,” Sen. Mitt Romney (R-UT) said Thursday. “But recognize this bill has no chance whatsoever of receiving a single Republican vote in either house.” Hearing from the experts: Sanders led a hearing of the Senate Budget Committee Thursday that took up the issue of Social Security and its long-term solvency. The hearing included testimony from experts on the topic, with representatives from Social Security Works, the Alliance for Retired Americans, the Bipartisan Policy Center and the Committee for a Responsible Federal Budget. Stephen C. Goss, the chief actuary at Social Security Administration, provided a basic summary of the current challenge. “Legislation will be needed before 2035 in order to sustain the ability to pay all Social Security benefits in full and on time,” he said in [prepared remarks](. “The retirement of the baby-boom generation is increasing the number of beneficiaries much faster than the increase in the number of covered workers, as subsequent lower birth-rate generations replace the baby-boom generation at working ages. … This fundamental change in the age distribution of the population will require the Congress to modify scheduled benefit levels, scheduled payroll tax levels, or add additional sources of revenue for the Social Security program.” In her [prepared remarks]( Nancy J. Altman of Social Security Works expressed support for Sanders’ plan, citing polling data that shows that a majority of Americans are opposed to cutting Social Security and instead want to see the program expanded. She also made the argument that Social Security in its current state is “unquestionably affordable,” costing less than 6% of GDP by the end of the century. “That is a lower percentage of GDP than many other industrialized countries spend on their counterpart programs today,” she said. Robert Roach Jr. of the Alliance for Retired Americans [made a plea]( for boosting benefits. “Social Security benefits are not keeping up with inflation,” he said, noting that the average benefit for a retired worker was just $1,666 per month. “The Social Security cost-of-living adjustment is inadequate and not representative of the true measure of inflation that seniors face in what they buy.” Shai Akabas of the Bipartisan Policy Center [called on]( lawmakers from both parties to act quickly to address Social Security’s finances. “Delaying necessary reforms will only serve to make them more politically difficult and cause added uncertainty for workers and retirees,” he said, adding that the situation calls for comprehensive reform that could include benefit increases. “Enhancing Social Security benefits—particularly for those who most rely on them in retirement—and putting the program on a fiscally sustainable path are not mutually exclusive,” he said. After running through the basic facts of Social Security’s financial challenges and chiding lawmakers for failing to act sooner, CRFB’s Maya MacGuineas [called for]( a mix of revenue increases and benefit cuts, especially for wealthier retirees. “We should … look to progressive revenue increases, but it is hard to understand those who advocate for more taxes on the rich while ruling out slowing the growth of their benefits,” she said. “So that’s where I would start: reducing benefits for the well-off who don’t need them. It won’t get you close to all the way there to fixing the program but can get you a lot.” Column of the Day: The Rising Political Obstacles to Fixing Social Security and Medicare Washington Post columnist Megan McArdle writes that, as lawmakers have continually put off reforms to address the long-term finances of Social Security and Medicare, the political challenges of fixing those programs have only gotten worse even as the delay “inevitably means that any fixes will be more disruptive.” Social Security’s trust fund will be exhausted in 13 years, as we mentioned above, and Medicare’s Hospital Insurance trust fund will be insolvent in just six years, according to the latest annual reports from the programs’ trustees. “But the short time we have left is not our only problem with either program. We also have to worry about new political obstacles that have arisen over the past 15 years,” McArdle writes. She goes on: “Not only are the parties more polarized than they were, making the bipartisan deal we need unlikely, but they struggle even to pass legislation on their own. … Furthermore, Democrats now have a much more muscular left wing than they did a decade and a half ago, and that wing wants Medicare-for-all and [increased Social Security benefits]( not an austerity agenda. The Republicans, meanwhile, have sprouted an energetic populist faction that is also likely to oppose any attempt to touch benefits — or to raise taxes or allow in immigrants who might temporarily ease some of the fiscal strains on the programs.” [Read the full piece at The Washington Post.]( Rick Scott Drops Tax Plan That Drew Bipartisan Backlash Republican Sen. Rick Scott of Florida on Thursday revised his proposed agenda for the GOP and ditched language that had called for all Americans to “pay some income tax to have skin in the game.” That proposal, among others in Scott’s plan, drew criticism from both Democrats and Republicans and became a regular attack line for President Joe Biden. Scott’s updated plan now says: “Able bodied Americans under 60, who do not have young children or incapacitated dependents, should work. We need them pulling the wagon and paying taxes, not sitting at home taking money from the government. Currently, far too many Americans who can work are living off of the hard work of others, and have no ‘skin in the game’. Government must never again incentivize people to not work by paying them more to stay home.” After unveiling his original plan in February, Scott tried to back away from his call for tax increases and clarify that seniors and those who were not “able-bodied” would be excluded from his requirement — though that led to questions about just how the plan would work and how all Americans would have “skin in the game.” Scott’s updated document now says: “Nothing in this plan has ever, or will ever, advocate or propose, any tax increases, at all” — a claim that appears impossible to reconcile with either the initial language Scott proposed or the revised version. Scott leads the National Republican Senatorial Committee, but he issued the plan on his own rather than as a party platform. Many Republicans shied away from the plan or, as Senate Minority Leader Mitch McConnell (R-KY) did, openly criticized it. “We will not have as part of our agenda a bill that raises taxes on half the American people and sunsets Social Security and Medicare within five years. That will not be part of the Republican Senate majority agenda,” McConnell told reporters in early March. Still, Democrats including Biden have hammered the Scott plan, suggesting, [somewhat misleadingly]( that it represented the true agenda of congressional Republicans. “One of the 28 planks in this plan was poorly worded and enabled the establishment from both parties in Washington to twist it into campaign-style attack fodder,” Scott said in a video released Thursday announcing his revised agenda. “What I was trying to say is that every American needs to pull their weight, every able-bodied American who can work should work.” Scott’s updated plan also calls for making the 2017 Republican tax cuts permanent and for requiring a supermajority of two-thirds of each house of Congress to raise any taxes or fees. Why it matters: Scott is clearly still eager to position himself as an anti-establishment presidential contender. He may be backing away from the original tax language he used, but his revised plan still provides plenty of fodder for fact-checkers — and political opponents. Perhaps most notably, his call for all federal programs to sunset or be renewed by Congress after five years is still in there, among a host of other controversial — or downright wacky — ideas. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- News - [Why Inflation Is Hitting American Households Like Never Before]( – Bloomberg - [Most Americans Expect Inflation to Get Worse, Post-Schar School Poll Finds]( – Washington Post - [Gas Prices Hit $5 National Average After Rapid Rise]( – ABC News - [The White House Outlines the Beginning of a Vaccination Campaign for the Youngest Children]( – New York Times - [Two Hospitals Are Being Fined for Disobeying Price Transparency Rules]( – Washington Post - [Hill Staffers Just Got Raises. 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