In case you missed the message at today's press conference, Sen. Bernie Sanders helpfully restated it several times: "Social Security is not in crisis."
Citing Congressional Budget Office estimates, Sanders told reporters at his Burlington office that Social Security has enough money to pay out 100 percent of its promised benefits for another 27 years. It's the years after that that are the problem. By 2038, Social Security will only have enough to pay 80 percent of promised benefits.
Sanders said Social Security is under attack from Washington budget-cutters who have lumped it in the deficit-reduction debate. They want to solve the future shortfall, he explained, by raising the retirement age or reducing cost of living adjustments (COLAs) to Social Security recipients. Social Security recipients haven't received a cost of living adjustment in two years. Reducing COLAs even more would be "absurd," Sanders said. For instance, Sanders said that under one proposed funding formula, a 65-year-old living on $16,000 a year would receive $560 less a year when he turned 75, and $1000 a year less when he reached 85.
Sanders said that, because Social Security is funded by the payroll tax and not the U.S. Treasury, it "hasn't contributed a nickel to the deficit" and should be decoupled from upcoming debt talks by the so-called Super Congress.
So today, Sanders announced legislation that, he said, pursues a "fairer" way to make Social Security solvent for the next 75 years. Anyone want to take a wild guess about how the senator plans to do that? (If you read the headline, you're disqualified from answering!).
In his own words, "By asking the wealthiest Americans to pay their fair share into Social Security." To that end, the Keeping Social Security Promises Act would subject all income over $250,000 a year to the Social Security payroll tax. Currently, only the first $106,800 of income is taxed, meaning someone who earns $106,800 a year pays the same amount of money into Social Security as a "millionaire or billionaire," the senator said.
Sanders, who was joined by three advocates for Vermonters who are elderly or disabled, plans to introduce the legislation as soon as Congress is back in session. Today, more than 120,000 Vermonters receive a combined $1.5 billion in Social Security benefits, amounting to 6 percent of the state's annual GDP.
Specifically, Sanders's bill would continue to apply the 12.4 percent payroll tax rate to all income up to $106,800, and would also apply it to income of $250,000 and above. Why $250,000? Because that's the number Barack Obama proposed when he was campaigning for president in 2008, Sanders said.
Of course, candidate Obama and President Obama haven't always agreed with each other. As a Sanders aide noted, candidate Obama also favored repealing the Bush-era tax cuts, before President Obama agreed to extend them last December. And lately, Washington has treated anything even remotely resembling a tax hike as pure poison. Congress wouldn't even close tax loopholes for corporate jets.
So how optimistic does Sanders feel about this tax-hiking piece of legislation?
"What we have got to do right now is rally the American people — and it is beginning to happen — to say there must not be cuts in Social Security," Sanders replied. "The immediate goal right now — I would certainly love to see my legislation passed tomorrow — but the immediate goal right now is to prevent any cuts on Social Security and have a serious discussion on Social Security and how we make it strong without cuts in benefits for the next 75 years."