Sanders’ Bill (S. 1558) Guarantees Social Security for 75 Years

 The Keeping Our Social Security Promises Act, S. 1558, introduced by Senator Bernie Sanders (I-VT), truly strengthens Social Security for future generations. The bill closes Social Security’s 75-year funding gap by applying Social Security payroll tax contributions to covered earnings of $250,000 or more. Currently, only wages up to $106,800 are taxed.

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 S. 1558 will:

• Guarantee Social Security can pay 100% of promised benefits for the next 75 years. Currently, with no action, Social Security will have sufficient income and assets to pay all monthly benefits in full and on time until 2036. S. 1558 extends that through 2085, as estimated by the Social Security Administration.
• Preserve currently scheduled benefits. Many proposals claiming to “strengthen” Social Security either undermine the program’s universal values, or the adequacy of its benefits. S. 1558 closes Social Security’s funding gap without doing either.
• Ensure everyone pays their fair share to Social Security. While nearly all Americans must make Social Security tax contributions on all of their wages, the wealthiest only do so on the first $106,800 of their annual earnings. S. 1558 rights this wrong. Social Security payroll tax contributions are only paid on wages up to $106,800 in 2011. S. 1558 gradually lifts the cap on taxable wages so that all workers contribute on all of their wages. It applies the Social Security payroll tax to covered earnings of $250,000 or more right away, but maintains the current-law benefit base. Importantly, it leaves the current cap temporarily in place, creating a donut hole so that a person’s earnings between $106,800 and $250,000 are not subject to a precipitous one-year increase in their payroll tax contributions. The donut hole would close over time, since the $106,800 cap rises with average wage increases. Once the cap reaches $250,000, in approximately 25 years, all wages would be subject to the Social Security payroll tax contribution. Benefits would continue to be calculated on the basis of capped wages, as they are under current law.
• Affect a small number of Americans. Few Americans would be affected by this change to the Social Security payroll tax cap. Just 1.2% of workers had earnings over $250,000 in 2009, including 0.4% of women, 0.3% of African American workers and 0.3% of Latino workers.
• Follow the will of the public. Seven out of ten (71%) voters support enacting Social Security payroll tax contributions on wages above $106,800, according to a bipartisan poll by Lake Research Partners and American Viewpoint.