2020 Democratic presidential candidate Elizabeth Warren introduced a plan Thursday to expand Social Security benefits by $200 per month by taxing the rich.
The proposal, published on Medium, will also increase Social Security benefits “for lower-income families, women, people with disabilities, public-sector workers and people of color.”
The added benefits would cost the country an additional $150 billion in the first year, according to The New York Times. Warren aims to fund the plan for about 64 million Americans who have Social Security by “asking the top 2% of families to contribute” a 14.8% “Social Security contribution,” which she describes as a “fair share.”
.@ewarren just shared her plan to provide the biggest, most progressive increase in Social Security benefits in nearly 50 years—an immediate $200-a-month increase for everyone. Whether you’re a current retiree or decades away from retiring, read this one: https://t.co/B2YiyRYwNX
— Team Warren (@TeamWarren) September 12, 2019
The Massachusetts senator said that “typical Social Security benefits today are quite small” and the average beneficiary in 2019 gets $1,354 a month, or $16,248 a year.
Moody’s Analytics Chief Economist Mark Zandi said in an independent analysis that her plan will ” immediately lift an estimated 4.9 million elderly people out of poverty,” which would decrease the senior poverty rate by 68%.
The study said the plan would also reduce the national debt by “more than $1.1 trillion cumulatively over the 2020-2029 period.”
Zandi’s analysis also found that Warren’s proposal would create a “much more progressive Social Security system” by increasing contribution requirements on the top 2% of U.S. earners and raising average benefits by about 25% for those in the bottom 50% of earners. Benefits would increase be less than 5% for people in the top 10%.
Warren’s plan also explains how Congress has not increased Social Security benefits in about 50 years. The program cost the country $945 billion in 2017, according to the Center on Budget and Policy Priorities.
The 2019 Social Security Board of Trustees annual report estimates Social Security benefits for retirees and persons with disabilities will be completely depleted by 2035 due in part to the country’s low birth rate.
Congress hasn’t increased Social Security benefits in nearly 50 years. Elizabeth has a plan for that. Try our new retirement calculator to see how much more you’d receive under @ewarren’s new plan: https://t.co/rajFkCr6VE
— Team Warren (@TeamWarren) September 12, 2019
Zandi’s analysis added that under Warren’s proposal, however, the solvency of Social Security would increase until 2054. (RELATED: Social Security Won’t Pay Full Benefits In 2035: Report)
“All past projections of the proportion of the U.S. population that will be elderly, and eligible for Medicare and Social Security, have assumed that the previous higher birth rates remained constant,” Columbia University health policy professor John Rowe told FOX Business in May.
“As rates have fallen, and fewer young people ultimately enter the labor force and pay into the Social Security and Medicare trust funds, the solvency of these funds is threatened,” he added.
Warren’s plan said unless Congress acts now, “future retirees are going to be in even worse shape than the current ones.”
“For someone who worked their entire adult life at an average wage and retired this year at the age of 66, Social Security will replace just 41% of what they used to make. That’s well short of the 70% many financial advisers recommend for a decent retirement,” Warren added.
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