Social Security Benefits Could Be Dramatically Changed Under New Bill

[Yo_Mama_Been_Loggin]

A newly proposed bill introduced by Arizona Representative Ruben Gallego, a Democrat, could change how the yearly cost-of-living adjustment to Social Security benefits is calculated, potentially boosting checks for retirees and other recipients.

The proposed legislation, called the Boosting Benefits and COLAs Act, is an attempt to amend Title II of the Social Security Act to require the Commissioner of Social Security to use the Consumer Price Index for Elderly Consumers (CPI-E) to calculate the yearly cost-of-living adjustment, better known as COLA, instead of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Should the CPI-W be higher than the CPI-E, the first should be used instead of the latter.

The annual COLA is currently based on the percentage increase in the CPI-W between the third quarter of the previous year and the third quarter of the current year. If there's no increase, there's no COLA. The idea is to adjust Social Security benefits so that they can keep pace with inflation: in 2024, the COLA was 3.2 percent, a much smaller boost than the previous year, when the adjustment had been 8.7 percent.

But Gallego argues that this formula doesn't consider the specific costs that retirees have to face, which are different from the rest of the American population. For example, medical expenses weigh more heavily on elders than younger people—a number which is reflected in the CPI-E, but not necessarily in the CPI-W.

https://www.msn.com/en-us/money/retirement/social-security-benefits-could-be-dramatically-changed-under-new-bill/ar-AA1nAQz7

[underpants]

1. 👍

[Takket]

2. Should be coupled with increased SS taxes on the rich to pay for it

[Voltaire2]

3. indeed, abolish the cap already.

[DFW]

15. That makes the most sense

Or, at the very least raise it to four or five times what it is now. This whole “tax the rich” shouting without any specifics is just so much sloganeering, like the extremist right whining about “liberals.” Dramatically raising the cap is a specific, workable and practical solution. It will bite into middle class income, yes, but as opposed to moves that either target the few or else benefit the few, this would be a truly universal move, burdening many, granted, but helping even more.

[Big Blue Marble]

4. And raising the floor for SS benefits to be taxed.

The current law reflects the value of benefits in 1983. Now almost anyone with
with a 401K pension or IRA distributions is forced taxes on to up to 85% of
of their benefit.

[DFW]

16. That part is antiquated.

Why have the government pay it out if it is just going to take a third or half of it back?

Just pay out what the recipient is really going to keep, and don’t burden the IRS with millions of man-hours of extra work. And don’t hand out receivers of benefits money that they will just have to pay back months later. And by the way, as one who gets hit for 50% in German taxes on my SS payments, if the recipient is an American living abroad, pay the whole amount, and leave us alone! We already get taxed on SS benefits at full boat rates by the countries where we reside!

[Big Blue Marble]

17. I interpret it to be a way to silently cut SS benefits.

It magically moves benefit dollars from the SS Trust Fund to
the General Fund with little or no political cost.

The $25K income floor in 2024 dollars would be $78K today if this
law had been indexed. Think of all those SS benefits that are
transformed in tax dollars raised without a stroke of a pen over
the years, quite a racket. And course, prior to Reagan and O'Neil's
Tax "Reform" of 1983, no SS benefits were taxed at all.

[Voltaire2]

26. Yeah just index it. It is a stealth annual benefit cut.

[wolfie001]

18. Boom!!! Yes!!!

[Ford_Prefect]

5. About bloody time. Banks, insurance, and medical will figure out how to absorb it though, unless housing costs do.

[PlutosHeart]

8. Yes. It becomes a dive for dollars by

several groups including Insurance, utilities, etc...
I believe theory the idea is good but in reality there needs to be also something in place that defends against the ability of corporations and entities to be able to go after seniors and some others. A wall of some kind.

[Ford_Prefect]

9. For instance a National Health Program along with rent and utility cost stabilization for those on fixed income.

In North Carolina there is a program whereby taxes on your home are forgiven for those above a certain age and below a certain income.

[PlutosHeart]

14. We partially own our home

but coming up with the 1500 escrow difference just a month back hurt us. Everything has gone up for us pushing our ability to pay monthly towards a breaking point. Our home needs repairs (mostly visual) and we are lower middle income. I actually fear every time they raise our SS since I know what to expect next.

[slightlv]

23. I've come to expect

that any COLA increase will be met with a corresponding increase in outgo for Medicare. In fact, whatever increase we get usually ends up to be a deficit when all is said and done. But then, I did get use to this long before I retired. COLA's in DoD did the same thing. Increase the COLA and our healthcare costs went up - along with any other "contribution" we made into a selected program. We usually ended up with deficits there, too. So much so, I dropped out of a few programs that were actually good to be in... for the later years. Unfortunately, I needed the "extra" money to meet living expenses at the time. That's the way my whole work life went! Live the present without the monies needed to make ends meet, but have more set aside for the "elder" years... or hang on to whatever you could keep to make it through month to month, and "pay" for it in your elder years.

Well, here I am in my elder years now. And the same game is being played with my SS dollars. Don't get me wrong, I'm grateful for the SS... without it I'd be completely destitute. I just object to the "good news/bad news" game with COLAS and any other increases that happen to come along. The old saying "Life just ain't fair" proves to be one of the most important truisms to understand from the get-go.

[montanacowboy]

6. Oh Hell Yes!

and raise the cap

[Omaha Steve]

7. You can donate to Ruben with our DU link

He is running for Senate against Kari Lake. Donate here: https://secure.actblue.com/donate/duforgallego

OS

[cstanleytech]

10. One thing that should be considered in the calculations is the actual cost of housing with basic utilities.

When a person cannot afford even a small apartment with electricity, heat and water that should be a warning sign that there is a major problem.

[onecaliberal]

11. Raise the cap.

[Rocknation]

20. Delete the cap altogether

and EVERYONE can pay a LOWER rate.


Rocknation

[onecaliberal]

21. I love that idea.

[RandomNumbers]

22. Index it to inflation

Like the minimum wage also should be indexed to inflation.

[cstanleytech]

25. But also move it out from under Congress and the Senate.

They have proven to be completely untrustworthy with adjusting it as they are to beholden to big money companies who do not want it to change.

[NH Ethylene]

12. That would be great!

And having the GOP oppose it right before the election would clarify who to vote for for some people.

[malthaussen]

13. My COL went up just by moving to Pittsburgh...

... I love it here, or wouldn't have returned, but food is about 33% higher here than it was in Jacksonville. For example, a gallon of milk cost 3 bucks in Florida, but 4 bucks here. That adds up to quite a few shekels on the same fixed income.

-- Mal

[LiberalFighter]

24. I'm at Fort Wayne, Indiana and gallon of milk is $2.69 at Krogers.

[malthaussen]

30. During the Summer of Covid, milk in Nowhere, Kentucky was 99 cents a gallon. n/t

[mnhtnbb]

28. $2.89 for gallon of milk

In Durham, NC at Kroger's. Perhaps you should check grocery prices at stores other than where you are shopping? I also checked gallon of milk price in Durham for Harris Teeter --where I shop-- and it was $3.29 for the same gallon of milk, although if I shop on senior day when I get 5% discount , it would be $3.13. I am not on a fixed budget, although my Social Security and CSA survivor's benefit are tied to the same COLA and will represent 64% of my income this year when I am forced to take my first RMD at age 73 from my IRA.

[malthaussen]

31. That's the Walmart price here.

It's $4.19 at Giant Eagle, which is the big Pittsburgh chain. It's simply true, food in Pittsburgh is oddly high-priced. You may be sure I've visited plenty of websites for the best deals on meals.

-- Mal

[TeamProg]

19. Ditch the Soc Sec Tax Cap. Just get rid of it. nt

[elocs]

27. Too many are dancing & celebrating like this is a done deal. It's not.

If the Left, and particularly retired seniors don't get their asses out and vote for Democrats all up and down the ballot this November they are not going to like the consequences.
Perhaps an increase in SS will help to offset its predicted cuts in the upcoming years.

[OMGWTF]

29. I think it'd be nice if we didn't have to pay taxes on our SS income. You can thank Reagan for that.

[karynnj]

32. Interesting

One question I have is here as in other discussions, it is mentioned that seniors pay more for medical expenses. However, even having good company medical benefits, I know we spent more on premiums than I do with Medicare part B, part D and Medigap. In addition, when someone has had serious medical issues, I have paid out of pocket far less. Obviously, seniors' use of medical services is greater.

I have not seen a comparison of average total medical costs by age.