Even with the tax on high income earners, Mr. Biden’s proposal will only buy the program five more years of solvency, according to an Urban Institute analysis, although it would dilute the benefit cuts that would be necessary if no more changes were made.
However, Biden policy advisers said the proposal was an opening attempt. “The vice president’s funding proposal shows how it will protect and increase benefits for all Social Security recipients while making a down payment on long-term solvency,” said Jane Sperling, Mr. Biden’s external advisor and former national economic advisor to the presidents. Bill Clinton and Barack Obama.
Almost every American has something at stake, or someone close to it: Approximately 178 million workers contribute to the program, and this year, approximately 45.8 million retirees will receive nearly $ 70 billion in benefits – the average monthly check. Around $ 1,500 per month, according to the Social Security Administration.
Under the current law, retirement benefits can only come from the trust, which will be depleted by 2034, according to Estimates of the Social Security Administration Don’t take the epidemic into account. At this point, the taxes collected will be sufficient to pay only 76 percent of the benefits. (a Congressional Budget Office A report from September predicted that trust funds would run out in 2031; Others, including Bipartisan policy center, Project could be urgent.)
Mr Akabas said the cost of inaction is dangerous, because as the insolvency period approaches, the necessary changes will become increasingly painful – tax increases must be larger, and any cuts are steeper.
“The longer we wait to solve the problem, the fewer people can play a role in the solution,” he said.
About half of the population aged 65 or over live in families that get at least half of their income from Social Security, according to a 2017 study published in Social Security Bulletin. Roughly 25 percent of elderly families depend on Social Security for at least 90 percent of their income.