WASHINGTON, D.C. – Today, Ways and Means Social Security Subcommittee Chairman Sam Johnson (TX-03) introduced legislation that will permanently save Social Security, ensuring this vital program continues to work for today’s workers and beneficiaries and future generations. For years, the Social Security Board of Trustees has cautioned the program is on an unsustainable path. This year, the Trustees Report warned workers will face a 21 percent benefit cut starting in 2034 if Congress does not reform the program.
Chairman Johnson’s legislation, the Social Security Reform Act of 2016 (H.R. 6489), puts Social Security back on a sustainable path by modernizing the program for the 21st century, rewarding retirees and individuals with disabilities for their years of work, and improving retirement security.
Upon introducing the legislation, Chairman Johnson said:
“For years I've talked about the need to fix Social Security so that our children and grandchildren can count on it to be there for them just like it’s there for today’s seniors and individuals with disabilities,” said Johnson. “My commonsense plan is the start of a fact-based conversation about how we do just that. I urge my colleagues to also put pen to paper and offer their ideas about how they would save Social Security for generations to come. Americans want, need, and deserve for us to finally come up with a solution to saving this important program.”
The Social Security Reform Act of 2016 ensures Social Security will be there when Americans need it by:
- Modernizing how benefits are calculated to increase benefits for lower income workers while slowing the growth of benefits for higher income workers.
- Gradually updating the full retirement age at which workers can claim benefits. The new retirement age better reflects Americans’ longer life expectancy while maintaining the age for early retirement.
- Ensures benefits keep up with changes in the economy by using a more accurate measure of inflation for the annual Cost-of-Living-Adjustment.
- Protecting the most vulnerable Americans by increasing benefits for lower-income earners and raising the minimum benefit for those who earned less over the course of long careers.
- Promoting flexibility and choice for workers by eliminating the Retirement Earnings Test for everyone. This allows workers to receive benefits—without a penalty—while they are working, or fully delay retirement and wait to receive benefits. For those who delay claiming benefits, they can receive increases in a partial lump sum or add it all to their monthly check.
- Encouraging saving for retirement by phasing out Social Security’s tax on benefits for workers who continue to receive income after they retire or stop working due to a disability.
- Targeting benefits for those most in need by limiting the size of benefits for spouses and children of high-income earners.
- Treating all workers fairly when their Social Security benefits are calculated by using the same, proportional formula that looks at all of an individual’s earnings over the course of his or her career.
To learn more about Chairman Johnson’s Social Security Reform Act of 2016, CLICK HERE.
To read the full bill text, CLICK HERE.
To read the Social Security Actuary letter, CLICK HERE.