The presidential campaign is a long and winding road. We have only had a couple of primary contests so far, but I sense that many people are already tired of the political season. Unfortunately we have only begun, but the campaign season allows us to look at the contenders and their stances on Social Security. Previously we looked at the Republican candidates. The best case scenario for beneficiaries if a Republican wins the White House is they decide not to cut Social Security benefits, but the Democrats are a different story.
We only have two candidates, Sen. Bernie Sanders and former Secretary of State Hillary Clinton, to choose from so their plans on Social Security are much less likely to get lost in the shuffle compared to the Republicans.
After the budget deal late last year Social Security is safe until at least 2033. This, right now, is the year Social Security is projected to not meet 100 percent of benefit payments, but that could change too depending on economic times.
Beginning with Sanders, the self-described progressive has suggested four main proposals related to Social Security. The objective is to increase benefits and outlines plans to increase the Social Security trust funds. The first thing Sanders wants to do is to increase benefits for everyone receiving Social Security checks. Specifically he is calling for a $65 a month increase for everyone, which equates to an extra $780 per year. This might not sound like a lot of money, but considering the average Social Security beneficiary receives about $16,000 a year, the increase is close to 5 percent more.
Secondly, Sanders wants to ensure that future annual increases in benefits are higher than what is provided now. Benefits failed to increase at all from 2015 to 2016 and recent increases have been less than 2 percent. It can be a bit technical how Sanders wants annual increases in Social Security payments to rise, but the main thing he wants to do is to change the formula to favor beneficiaries.
Obviously increases in Social Security benefits come at a cost and Sanders wants the wealthy to pay for it. Sanders wants Social Security taxes to apply to earnings above $250,000. Some people may not be aware, but right now all income earned over $118,500 per year is not taxed by Social Security. This means that right now the majority of people pay Social Security taxes on 100 percent of their income, but the wealthy earning more than $118,500 do not.
One additional way Sanders wants to bring in more money to Social Security to increase benefits is through a 6.2 percent tax on investment income for higher earners. Many people may not like the proposals Sanders is suggesting, but it cannot be argued that through these steps Social Security would be saved for a long time and benefits could actually even increase. For more on Sanders’ Social Security proposals click here.
Clinton has her own ideas, but she is also for increasing benefits for some beneficiaries, mainly for those who need it the most, those who are living at or below the poverty level. She also suggests increasing taxes on the wealthy to help pay for it. Among Clinton’s objectives related to Social Security and Medicare are to:
- Fight any effort to privatize or weaken Medicare and Social Security, and expand Social Security for future generations by asking the wealthiest to contribute more;
- Reform our health care system to incentivize and reward quality care;
- Demand lower prices for prescription drugs for senior receiving Medicare;
- Expand Social Security benefits for widows and those who took time out of paid workforce to care for a child or sick family member.
To learn the specifics of Clinton’s proposals click here.
