The 2020 Presidential Election is fast approaching, and it will likely be a close one. Incumbent President Donald Trump is facing off against former Vice President Joe Biden for the coveted seat in the White House. Presently, Biden is ahead in the polls—though polls should be viewed with skepticism given the fallout of the 2016 election. That said, if Biden is to win, it is important to further inspect some of his proposed changes. A key problem he intends to address is the fate of social security. Social Security was created in the wake of the great depression to help ensure the elderly do not fall below the poverty line and can be cared for after they retire. However, this provision has grown increasingly difficult to sustain. Some predictions anticipate that the social security fund will be empty by 2094. Biden hopes to correct the path Social Security is on by implementing four key changes.
The first change he intends to implement is an increase in the payroll tax on the highest earners. Presently the payroll tax only applies to the first $137,700 that an individual makes. Biden’s proposition is to implement a donut hole wherein individuals that earn between $137,700 and $400,000 would still have an exemption, but those exceeding it would have the tax applied. This is in an effort to increase the revenue that is earned to support social security.
The next provision Biden hopes to include is an enhanced special minimum benefit. This means that Biden wants to lower the requirements for an individual to receive social security benefits. The level he proposes to set it at is 125% f the federal poverty line. This means that individuals that made $1,301 a month would receive benefits. This is compared to the current $886.40 that an individual had to earn in order to qualify. Though this will help individuals in need, it will surely cost the government quite a bit of money to sustain.
The third change he intends to implement is a boost in benefits for the elder population of social security recipients. Beneficiaries aged 78-82 would receive a 1% increase in their primary insurance amount each year until it reaches a 5% increase. This is proposed in an effort to offset the soaring insurance costs that come with aging.
The fourth and final change Biden has suggested he would implement is a change in the inflationary tether that is used to regulate social security. Presently the COLA is assessed using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Biden suggests it would be more prudent to use the Consumer Price Index for the Elderly (CPI-E). This would help to make the money allocated more relevant to cost of living for the elderly.
In summation, Biden is intending to augment the way social security has been operating in order to expand and improve coverage. However, while these changes may appear good on paper, they do not adequately address the rising deficit associated with social security and does little to mitigate the cost incurred by the government.