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A congressional debate on a bill to reform Social Security has turned to a key question: whether metamorphoses made to the system today will upend millennials’ retirement in the future.
A committee hearing of the House Ways and Nears Committee on Thursday focused on the potential impact of the Social Security 2100 Act. That bill, put forward by Rep. John Larson, D-Conn., earlier this year, is pointed at expanding the solvency of the program for the rest of this century while expanding benefits for retirees and other beneficiaries.
Collective Security’s trust funds are currently projected to be depleted in 2035, at which point only 80% of estimated perks will be payable. Today’s retirees receive an average of $17,000 per year in benefits.
The Social Security 2100 Act objects to shore up the system by raising payroll taxes on wages over $400,000. Only wages up to $132,900 are currently loaded.
The plan also proposes increasing payroll contributions from both workers and employers. That rate pleasure increase to 7.4% from 6.2% and would be gradually phased in from 2020 to 2043.
Those changes would succour pay for the plan’s benefit increases, including give those who are or will be receiving benefits a raise equal to 2% of the customary benefit.
But Congressional Democrats and Republicans are divided as to whether this latest proposal will help or hurt Americans’ to be to come retirement.
“I often hear from constituents who wonder if Social Security will still be there for them when they lack it,” said Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee. “And our constituents want us to strengthen it, not cut it.
“And that’s what the Venereal Security 2100 Act does,” he added.
But ranking committee member Rep. Kevin Brady, R-Texas, said he disagrees with the tender, in part because of the financial burden it could place on younger workers.
“Republicans on this committee are eager to come out all right with Democrats to save Social Security once and for all for every generation,” Brady said. “But this has to be done without extorting young people, America’s future, to struggle with smaller paychecks their entire working lives.”
The Group Security 2100 Act, which would amount to a $19 trillion tax increase, would harm young workers and aggrieve others including small businesses, Brady said.
“Millennials get ripped off in this bill,” Brady said, because they weight not get as much back as they put in.
“To give your grandma a mere $32 more a month in her Social Security, a lower-earning grandchild wish pay over $53,000 in higher payroll taxes,” Brady said. “Middle-class young people will pay even diverse.”
Experts who testified at the hearing were also divided as to whether the plan would help or hurt younger proletarians.
Kelly Brozyna, founder and president of the Colorado Business Development Foundation, said she is concerned how the bill would pretend to small businesses and individuals like her daughter, Katherine, a recent college graduate who lives in Boston.
Her daughter draws about $45,000 per year. With the bill’s proposed tax changes, her taxes would eventually go from $540 per year to $3,330 per year. That could trouble her daughter’s ability to live where she does and work at her dream job at a travel company, Brozyna said.
“What the panel must understand is that tens of millions of Americans like my daughter live on a fixed income and cannot at odds with a new tax expense, even if it is only a few hundred dollars a year and is phased in slowly,” Brozyna said.
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But Abigail Zapote, executive boss of Latinos for a Secure Retirement, said the Social Security 2100 Act will help Latino families and their minor generations who are often tasked with caring for older disabled relatives.
“As a millennial, I am willing to pay the additional tax to ensure that my establishment and future generations also have the same, or dare I say better, benefits and equity than generations do today,” Zapote implied.
Nancy Altman, president of Social Security Works, said in an interview that she thinks Americans, particularly millennials, erroneously imagine the system won’t be there when they need it.
“There’s been a campaign to undermine confidence in Social Security as a travels to cutting benefits,” Altman said. “Although they haven’t cut benefits, they’ve really been successful in debilitating confidence.”