An outgoing conservative House Republican introduced legislation Wednesday that would reform Social Security to stabilize its finances, partly by raising tax revenue, despite Republican opposition to tax hikes.
The bill’s author, Rep. Reid Ribble of Wisconsin, has said he will retire at the end of this year.
The reform plan is co-sponsored by a bipartisan group of lawmakers, providing an indication of a possible avenue of compromise on addressing Social Security’s unsustainable finances. As such, the proposal received plaudits Wednesday from fiscal conservative groups.
Maya MacGuineas, the head of the nonprofit Committee for a Responsible Federal Budget that advocates lower deficits, said Ribble and his co-sponsors “deserve huge praise for putting forward a serious and responsible plan to strengthen Social Security.”
Announcing his plan outside the Capitol, Ribble said that Social Security beneficiaries face immediate and dramatic cuts to their benefits when the trust funds run out, which the Social Security administration expects will happen in 2034.
“It doesn’t have to be bad if we move quickly, and that’s exactly what we do here,” Ribble said.
The legislation would put Social Security on a sustainable path over the next 75 years through a mix of revenue increases, cuts to benefits for well-off beneficiaries, cost-of-living-adjustments, and retirement age increases.
More than one-third of the bill’s fiscal savings would come from increases in the payroll tax, according to a bill summary posted on Ribble’s site. The legislation would raise the cap on earnings subject to the payroll tax, up from $118,500 this year to $156,550 next year, and then up to $308,750 in 2021. The goal would be to ensure that 90 percent of earnings are taxed, the percentage Ribble said was taxed during the Reagan administration.
That method of raising revenue is less progressive than other proposals meant to improve the program’s finances. Sen. Bernie Sanders, for example, while running for president as a Democrat, suggested raising payroll taxes on incomes over $250,000, but not on income between $118,500 and $250,000.
Another third of the savings would come from raising the full retirement age from 67 to 69 over a course of years, and then indexing the retirement age to life expectancies.
The rest of the savings would come from means-testing benefits and using a different measure of inflation to calculate benefits, one that would make the payments grow more slowly.
The bill also would increase benefits for poor and very old beneficiaries. Ribble said that those provisions would cut senior poverty in half.
Listed as sponsors of the bill were Republicans Dan Benishek of Michigan, Cynthia Lummis of Wyoming, Scott Rigell of Virginia, and Todd Rokita of Indiana. Democrat Jim Cooper of Tennessee also co-sponsored the bill.
