House Democrats Call For Action on Social Security Reform

Aug 15, 2022 / By Elaine Floyd, CFP®

House Democrats John Larson of Connecticut and Pramila Jayapal of Washington teamed up on August 15 to wish Social Security a happy 87th birthday and urge action on a bill to expand Social Security. They are hoping that Larson’s bill, Social Security 2100: A Sacred Trust, will come up for a vote as soon as this fall.

Of the several proposals that have recently been submitted to the SSA Chief Actuary for analysis, the Larson bill is by no means the best one, since it extends solvency by only three years, to 2038, due to the sunsetting of several provisions which were designed to get Republicans on board. But Larson, as chairman of the House Ways and Means Social Security Subcommittee, has a lot of clout when it comes to Social Security legislation and would naturally call for action on his own proposal versus the proposals submitted by Bernie Sanders and Peter DeFazio, and others.

The call may be a response to an announcement by Ron Johnson (R-Wis.) to make Social Security come up for a congressional reauthorization vote every year, seen by many as a transparent effort by Republicans to eventually do away with Social Security and other “entitlement” programs.

The Larson bill would impose payroll taxes on earnings above $400,000, as opposed to Sanders’ bill, which would impose payroll taxes on earnings above $250,000 plus a separate 12.4% tax on investment earnings above $200,000 for single filers and $250,000 for joint filers, plus a 16.2% net investment income (NII) tax on active S-corporation holders and active limited partners.

Larson is hoping to get bipartisan support for his bill, but so far no Republicans have endorsed it.

Read more about the Larson bill here.

As director of retirement and life planning for Horsesmouth, Elaine Floyd helps advisors better serve their clients by understanding the practical and technical aspects of retirement income planning. A former wirehouse broker, she earned her CFP designation in 1986.

 

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