March 22nd is an Important Anniversary for American Seniors
Today is the 49th anniversary of senior nutrition programs being added to the Older Americans Act (OAA), an important milestone in federal efforts to address food insecurity among the elderly. The original Older Americans Act was signed into law by President Lyndon B. Johnson as part of his vision for a Great Society. OAA senior nutrition programs include Congregate Meals (served in the community) and Home Delivered Meals (brought directly to seniors’ homes).
We talked to the National Committee’s director of government relations and policy, Dan Adcock, about this landmark anniversary, which roughly coincides with the first anniversary of the COVID pandemic.
As a former staffer on the U.S. House Committee on Education and Labor, Dan helped write an update of the Older Americans Act. In 2018, he rode along with Meals on Wheels to deliver meals to seniors in the San Diego, CA area. He told Entitled to Know, “The seniors who answered the door greeted us with huge smiles and ample gratitude, not only for bringing them lunch or dinner, but for their only social interaction all day.”
What does the 49th anniversary of senior nutrition programs being added to the OAA mean to American seniors?
ADCOCK: This year’s anniversary is especially timely given that local home-delivered meal programs throughout the country have risen to the occasion during the COVID pandemic by becoming the sole source of nutrition and social contact for millions of older Americans. That makes this a landmark year, of sorts.
How does the nutrition component of OAA fit into President Johnson’s vision of a Great Society?
ADCOCK: A Great Society doesn’t let its most vulnerable citizens live in poverty or go hungry. Adding a nutrition program to LBJ’s vision of the Older Americans Act was a compassionate step to make the program more fully serve the needs of seniors.
What are the main benefits of the Congregate Meals program? What does it give seniors that they otherwise wouldn’t have?
ADCOCK: The Congregate Meals program encourages seniors to get out of the house, socialize with other people, and get at least one nutritious meal a day. Unfortunately, many congregate meal centers are closed because of the pandemic. As soon as the pandemic is over, we want to encourage older Americans (who are able) to partake in congregate meals in their communities.
Why are home delivered meals (Meals on Wheels) so important to America’s seniors?
ADCOCK: Home delivered meals often provide seniors who can’t easily leave their homes with nutrition and social contact they wouldn’t otherwise have. Since it wasn’t safe for many seniors to leave their homes during the pandemic, the need for home delivered meals has become even more apparent. That’s why the home-delivered meals program needs to have the capacity to scale-up to handle future emergencies.
A Meals on Wheels delivery center in San Diego, CA
Which of your own personal or professional experiences informed your view of these programs?
ADCOCK: As a staffer on the House Committee on Education and Labor, I helped write an update of the Older Americans Act, including home delivered meals. While the committee heard testimony from many witnesses who ran senior nutrition programs, the experience of actually delivering meals to seniors as a volunteer gave me first-hand experience of how invaluable home delivered meals are to the people we visited. Every member of Congress should have the experience of seeing the smiling faces of seniors who receive a hot meal and much-needed social interaction.
How would you characterize funding levels for OAA nutrition programs today? Less than adequate? Just about adequate? And do we need better funding moving forward?
ADCOCK: Over the past 20 years, the OAA has lost ground due to our rapidly-increasing elderly population. Unfortunately, federal funding has not kept pace with either inflation and demographic changes. Eligible seniors face waiting periods for many OAA services, including home delivered meals, in most states. Fortunately, for Fiscal Year 2020, total OAA funding, including supplemental funding to respond to the needs of seniors during the COVID-19 pandemic, reached its highest level ($3.220 billion) in the Act’s 55-year history. This trend continued into Fiscal Year 2021 with an increase of $96 million. While it took a pandemic to finally provide adequate funding for the Older Americans Act, I am concerned that when things get back to normal, Congress may return to the usual practice of underfunding these vital programs, despite the needs of our growing elderly population.
How did the $750 million in additional funding for nutrition programs end up in the COVID bill and why is that significant?
ADCOCK: Congress recognized that seniors stuck at home would go without food during this emergency unless OAA nutrition programs, especially home-delivered meals, received additional funding.
What do we as an organization want to see on this issue moving forward? Will senior hunger/food insecurity continue to be a problem, and will the demand for these programs increase?
ADCOCK: The National Committee wants to ensure that lawmakers don’t slip back into the habit of neglecting senior nutrition programs. As 10,000 Americans turn 65 a day, the demand for all OAA services, including congregate and home delivered meals, will only grow.
Senate Confirms Seniors’ Champion to Lead HHS
Seniors can rightly celebrate Thursday’s Senate confirmation of California attorney general Xavier Becerra to lead the U.S. Department of Health and Human Services (HHS). Few cabinet positions have as much impact on older Americans’ health and well-being as the Secretary of HHS, which oversees the administration of Medicare, Medicaid, and Older Americans Act programs. Throughout his long and distinguished career in public service, Xavier Becerra has demonstrated a commitment to older Americans’ health care.
“Attorney General Becerra’s experience as a legislator and executive leaves little doubt about his ability to help the Biden Administration successfully guide the country out of the COVID pandemic — and into a stronger era of health and human services delivery for seniors and all Americans.” – Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare
As a Congressman, Becerra helped secure passage of the Affordable Care Act and later defended it in court. He knows the plight of those who lack access to affordable health care coverage and understands the government’s fundamental responsibility in this area. As HHS Secretary, he can direct the Centers for Medicare and Medicaid Services (CMS) to continue moving away from destructive Trump era policies, toward President Biden’s fairer and more expansive vision of both programs — and advocate for that vision with the Congress.
“Speaking at a Senate confirmation hearing last month, Becerra said he understands ‘the enormous challenges before us.’ He said he would work not only to contain the virus but also to boost access to affordable health care.” – CNBC, 3/18/21
Thursday’s Senate vote was the closest for any of Biden’s cabinet nominations so far, with one Republican crossing the aisle to support Becerra.
“Maine Republican Susan Collins joined all of the Democrats present in the 50-49 vote — an unusually narrow margin for an HHS secretary. Becerra, who served in the House for more than two decades before becoming California’s Attorney General, will become the first Latino to head the sprawling federal health department.” – Politico, 3/18/21
National Committee President Max Richtman applauded the Democratic Senators who unanimously voted to confirm Becerra – and commended Senator Collins “for putting party politics aside to cast her vote for responsive, informed leadership at HHS.”
As the first Latino HHS Secretary, Xavier Becerra brings much-needed perspective and life experience to the job as an ever-diversifying country moves toward a more equitable health care system for all.
“Historic Victory for American People” is a Winner for Seniors
****Updated 3/11/21 3:30pm****
President Biden signed his $1.9 trillion COVID relief bill into law today — on the first anniversary of the pandemic. The American Rescue Act unleashes $1.9 trillion in federal aid to help hard hit Americans, small businesses, and state and local governments. President Biden called the bill’s enactment “a historic victory for the American people.” House Speaker Nancy Pelosi said that the American Rescue Act is “the most consequential piece of legislation we’ll ever be party to in our lifetimes.” It fulfills a promise President Biden made to the American people to provide substantial relief to a country still reeling from the COVID pandemic – and seeking to get back on its feet as quickly as possible.
“The signing of this landmark legislation is a great moment for all Americans who have struggled to survive and stay financially afloat during this pandemic, especially seniors, people with disabilities, and their families.” – Max Richtman, president and CEO, National Committee to Preserve Social Security and Medicare
The President’s COVID relief package gives seniors’ health and economic security a much-needed boost. Millions of Social Security beneficiaries will be eligible for $1,400 stimulus payments to keep their heads above water financially. The legislation also contains crucial new funds for vaccinations, testing, and safer nursing home care.
President Biden called passage of the COVID relief bill “a historic victory for the American people.”
The American Rescue Act includes $12.6 billion in additional federal Medicaid payments that states can use to expand home and community-based services (HCBS), where exposure to COVID is minimal compared to nursing homes.
The COVID relief legislation adds $4.5 billion for LIHEAP, the federally-funded program that helps keep low-income seniors’ homes heated and cooled — and invests more than $1.4 billion to strengthen critical programs for older adults — including nutrition assistance (such as Meals on Wheels), vaccination support, and caregiver support —under the Older Americans Act and the Elder Justice Act, among other provisions.
The American Rescue Act is the polar opposite of the Trump/GOP tax cuts in 2017, which mostly benefited the wealthy and large corporations. President Biden’s legislation actually helps those on the bottom and middle of the economic ladder the most. It is a ‘bottom up’ strategy for rebuilding the economy versus the failed ‘trickle down’ approach of Republicans from Reagan to Trump.
The National Committee salutes President Biden for his steely determination to enact this legislation, along with House committee chairs Rep. Richard Neal (Ways & Means), Rep. Frank Pallone (Energy & Commerce), and Senator Ron Wyden (Finance committee chair). We also thank Rep. Debbie Dingell for championing the HCBS provisions of the bill.
The bill passed the House on Wednesday with zero Republican support, despite public polling that shows some 75% of Americans across party lines support the package as whole. It now goes to President Biden for signature. He is expected to sign the American Rescue Act by Friday. In so doing, President Biden and Congressional Democrats will have enacted one of the most far-reaching, most compassionate pieces of legislation to help seniors and other everyday Americans since the Great Society.
COVID Relief Should be a Big Relief for Seniors
The Senate is expected to pass President Biden’s $1.9 trillion COVID relief bill over the next several days. Though concessions have been made to improve its chances of passage, the legislation remains the best hope of getting seniors and other struggling Americans the relief they so badly need.
Under the COVID relief act, millions of Social Security beneficiaries will be eligible for $1,400 stimulus payments to keep their heads above water financially. The legislation also contains crucial new funds for vaccinations, testing, and safer nursing home care that is so crucial to older Americans.
There is more good news in this bill for seniors. It also includes:
*$12.6 billion in additional federal Medicaid payments that states can use to expand home and community-based services (HCBS), which generally is a healthier option for seniors than nursing homes;
*47.8 billion for Coronavirus testing and mitigation;
*$4.5 billion for LIHEAP, the federally-funded program that helps keep low-income seniors’ homes heated and cooled;
*$276 million for aging and disability programs under the Elder Justice Act.
Seniors have been among the hardest hit by the pandemic, in terms of sickness and deaths, mental and emotional stress, and financial strain. The relief package should go a long way toward mitigating their pain.
“The vast majority of Americans believe this plan is essential to giving them help. It’ll grow the economy in the process. This is a lifeline for getting the upper hand against COVID. This isn’t some academic discussion. It’s about you, and people like you.” – President Biden, 3/5/21
We salute President Biden for his steely determination to enact this legislation, along with House committee chairs Rep. Richard Neal (Ways & Means), Rep. Frank Pallone (Energy & Commerce), and Senator Ron Wyden (Finance committee chair). We also thank Rep. Debbie Dingell for championing the HCBS provisions of the bill.
Once the COVID relief package passes the Senate, it will go back to the House for final approval and on to President Biden’s desk for signature. On Friday, National Committee president and CEO Max Richtman said, “The passage of this landmark legislation will be a great moment for all Americans who have struggled to survive and stay financially afloat during this pandemic, especially seniors, people with disabilities, and their families.”
Millionaires Are Done Paying Into Social Security for the Year
Today is the day most millionaires stop paying into Social Security for the rest of the year, while most of us will continue contributing FICA payroll taxes through the end of December. The payroll tax cap for 2021 is $142,800 in annual wages. As of today, people grossing $1,000,000 a year in wages have now exceeded the cap; hence, no more payroll contributions for millionaires until 2022. If that sounds unfair, it should be noted that billionaires stopped paying into Social Security in January!
In effect, higher income earners pay a significantly smaller percentage of their wages into Social Security than everyone else. This not only is patently unfair; it deprives Social Security of much-needed revenue. Without additional revenue, the Social Security trust fund will become depleted in 2035 (at which time the program could still pay roughly 80% of benefits).
It wasn’t always this way. In years past, 90% of wages earned in this country fell below the payroll tax cap. But due to rising wealth inequality in recent decades, only 82.5% of those earnings are now subject to the Social Security payroll tax.
“The extraordinary growth of income for those at the highest end of the wage scale was not anticipated by those who established the formulas that fund Social Security today. Wages for middle-and-lower income workers have remained stagnant for over a decade, while higher-wage workers have seen significant wage growth during that time.” – www.ncpssm.org
Even millionaires recognize this is unfair. As the advocacy group Patriotic Millionaires points out:
“The income cap is not only regressive, but unnecessary. It has been around since the tax began in 1937, but has not kept up with disproportionate wage growth or explosive wealth inequality. As a result, almost $2 trillion in earnings a year are not subject to the payroll tax, limiting the amount of revenue collected for Social Security.” – Patrioticmillionaires.org
The COVID economy is putting additional strain on Social Security’s finances. Some predict that the drop in payroll tax revenue from chronic unemployment will deplete the Social Security trust fund sooner than previously projected. Adjusting the payroll wage cap would be the surest way to forestall that unfortunate outcome.
The pandemic also has reminded us that Social Security is a financial lifeline to millions of American families. The program is there for older workers who are forced by the pandemic to retire early. It is also there for widows, widowers, and children of family breadwinners who pass away. Working Americans cannot afford to see Social Security’s finances further eroded because the wealthy don’t pay their fair share.
For years, we and other seniors’ advocates have supported “scrapping” the payroll wage cap – either immediately or over a period of time. After four years of a Trump presidency and GOP control of the Senate, we finally have a chance to make this happen. If Congress is able to muster the political will, Social Security’s finances can be strengthened in a fair and equitable way. The electorate has given us a golden opportunity. In fact, public opinion polling indicates broad support for eliminating the wage cap.
For his part, President Biden proposes to re-instate the payroll tax at $400,000 in annual wages. That closely tracks the payroll tax provisions in Rep. John Larson’s Social Security 2100 Act. Lifting the cap would extend the solvency of the Social Security trust fund. It also would help cover the cost of boosting Social Security benefits, which both President Biden and Rep. Larson want to do. The President would start by increasing benefits for some of the most financially vulnerable members of society — low-income workers, widows and widowers, and retirees over 85 years of age.
So-called ‘fiscal conservatives’ argue that Social Security must be cut in order to save it, by raising the retirement age, means testing or by other measures. We disagree. It’s unfair to ask seniors, workers with disabilities, and their families to bear the brunt of strengthening Social Security’s finances. The more equitable path is to ‘Scrap the Cap,’ so that the wealthy pay their fair share — and all Americans can count on the benefits they’ve earned over a lifetime of work.
March 22nd is an Important Anniversary for American Seniors
Today is the 49th anniversary of senior nutrition programs being added to the Older Americans Act (OAA), an important milestone in federal efforts to address food insecurity among the elderly. The original Older Americans Act was signed into law by President Lyndon B. Johnson as part of his vision for a Great Society. OAA senior nutrition programs include Congregate Meals (served in the community) and Home Delivered Meals (brought directly to seniors’ homes).
We talked to the National Committee’s director of government relations and policy, Dan Adcock, about this landmark anniversary, which roughly coincides with the first anniversary of the COVID pandemic.
As a former staffer on the U.S. House Committee on Education and Labor, Dan helped write an update of the Older Americans Act. In 2018, he rode along with Meals on Wheels to deliver meals to seniors in the San Diego, CA area. He told Entitled to Know, “The seniors who answered the door greeted us with huge smiles and ample gratitude, not only for bringing them lunch or dinner, but for their only social interaction all day.”
What does the 49th anniversary of senior nutrition programs being added to the OAA mean to American seniors?
ADCOCK: This year’s anniversary is especially timely given that local home-delivered meal programs throughout the country have risen to the occasion during the COVID pandemic by becoming the sole source of nutrition and social contact for millions of older Americans. That makes this a landmark year, of sorts.
How does the nutrition component of OAA fit into President Johnson’s vision of a Great Society?
ADCOCK: A Great Society doesn’t let its most vulnerable citizens live in poverty or go hungry. Adding a nutrition program to LBJ’s vision of the Older Americans Act was a compassionate step to make the program more fully serve the needs of seniors.
What are the main benefits of the Congregate Meals program? What does it give seniors that they otherwise wouldn’t have?
ADCOCK: The Congregate Meals program encourages seniors to get out of the house, socialize with other people, and get at least one nutritious meal a day. Unfortunately, many congregate meal centers are closed because of the pandemic. As soon as the pandemic is over, we want to encourage older Americans (who are able) to partake in congregate meals in their communities.
Why are home delivered meals (Meals on Wheels) so important to America’s seniors?
ADCOCK: Home delivered meals often provide seniors who can’t easily leave their homes with nutrition and social contact they wouldn’t otherwise have. Since it wasn’t safe for many seniors to leave their homes during the pandemic, the need for home delivered meals has become even more apparent. That’s why the home-delivered meals program needs to have the capacity to scale-up to handle future emergencies.
A Meals on Wheels delivery center in San Diego, CA
Which of your own personal or professional experiences informed your view of these programs?
ADCOCK: As a staffer on the House Committee on Education and Labor, I helped write an update of the Older Americans Act, including home delivered meals. While the committee heard testimony from many witnesses who ran senior nutrition programs, the experience of actually delivering meals to seniors as a volunteer gave me first-hand experience of how invaluable home delivered meals are to the people we visited. Every member of Congress should have the experience of seeing the smiling faces of seniors who receive a hot meal and much-needed social interaction.
How would you characterize funding levels for OAA nutrition programs today? Less than adequate? Just about adequate? And do we need better funding moving forward?
ADCOCK: Over the past 20 years, the OAA has lost ground due to our rapidly-increasing elderly population. Unfortunately, federal funding has not kept pace with either inflation and demographic changes. Eligible seniors face waiting periods for many OAA services, including home delivered meals, in most states. Fortunately, for Fiscal Year 2020, total OAA funding, including supplemental funding to respond to the needs of seniors during the COVID-19 pandemic, reached its highest level ($3.220 billion) in the Act’s 55-year history. This trend continued into Fiscal Year 2021 with an increase of $96 million. While it took a pandemic to finally provide adequate funding for the Older Americans Act, I am concerned that when things get back to normal, Congress may return to the usual practice of underfunding these vital programs, despite the needs of our growing elderly population.
How did the $750 million in additional funding for nutrition programs end up in the COVID bill and why is that significant?
ADCOCK: Congress recognized that seniors stuck at home would go without food during this emergency unless OAA nutrition programs, especially home-delivered meals, received additional funding.
What do we as an organization want to see on this issue moving forward? Will senior hunger/food insecurity continue to be a problem, and will the demand for these programs increase?
ADCOCK: The National Committee wants to ensure that lawmakers don’t slip back into the habit of neglecting senior nutrition programs. As 10,000 Americans turn 65 a day, the demand for all OAA services, including congregate and home delivered meals, will only grow.
Senate Confirms Seniors’ Champion to Lead HHS
Seniors can rightly celebrate Thursday’s Senate confirmation of California attorney general Xavier Becerra to lead the U.S. Department of Health and Human Services (HHS). Few cabinet positions have as much impact on older Americans’ health and well-being as the Secretary of HHS, which oversees the administration of Medicare, Medicaid, and Older Americans Act programs. Throughout his long and distinguished career in public service, Xavier Becerra has demonstrated a commitment to older Americans’ health care.
“Attorney General Becerra’s experience as a legislator and executive leaves little doubt about his ability to help the Biden Administration successfully guide the country out of the COVID pandemic — and into a stronger era of health and human services delivery for seniors and all Americans.” – Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare
As a Congressman, Becerra helped secure passage of the Affordable Care Act and later defended it in court. He knows the plight of those who lack access to affordable health care coverage and understands the government’s fundamental responsibility in this area. As HHS Secretary, he can direct the Centers for Medicare and Medicaid Services (CMS) to continue moving away from destructive Trump era policies, toward President Biden’s fairer and more expansive vision of both programs — and advocate for that vision with the Congress.
“Speaking at a Senate confirmation hearing last month, Becerra said he understands ‘the enormous challenges before us.’ He said he would work not only to contain the virus but also to boost access to affordable health care.” – CNBC, 3/18/21
Thursday’s Senate vote was the closest for any of Biden’s cabinet nominations so far, with one Republican crossing the aisle to support Becerra.
“Maine Republican Susan Collins joined all of the Democrats present in the 50-49 vote — an unusually narrow margin for an HHS secretary. Becerra, who served in the House for more than two decades before becoming California’s Attorney General, will become the first Latino to head the sprawling federal health department.” – Politico, 3/18/21
National Committee President Max Richtman applauded the Democratic Senators who unanimously voted to confirm Becerra – and commended Senator Collins “for putting party politics aside to cast her vote for responsive, informed leadership at HHS.”
As the first Latino HHS Secretary, Xavier Becerra brings much-needed perspective and life experience to the job as an ever-diversifying country moves toward a more equitable health care system for all.
“Historic Victory for American People” is a Winner for Seniors
****Updated 3/11/21 3:30pm****
President Biden signed his $1.9 trillion COVID relief bill into law today — on the first anniversary of the pandemic. The American Rescue Act unleashes $1.9 trillion in federal aid to help hard hit Americans, small businesses, and state and local governments. President Biden called the bill’s enactment “a historic victory for the American people.” House Speaker Nancy Pelosi said that the American Rescue Act is “the most consequential piece of legislation we’ll ever be party to in our lifetimes.” It fulfills a promise President Biden made to the American people to provide substantial relief to a country still reeling from the COVID pandemic – and seeking to get back on its feet as quickly as possible.
“The signing of this landmark legislation is a great moment for all Americans who have struggled to survive and stay financially afloat during this pandemic, especially seniors, people with disabilities, and their families.” – Max Richtman, president and CEO, National Committee to Preserve Social Security and Medicare
The President’s COVID relief package gives seniors’ health and economic security a much-needed boost. Millions of Social Security beneficiaries will be eligible for $1,400 stimulus payments to keep their heads above water financially. The legislation also contains crucial new funds for vaccinations, testing, and safer nursing home care.
President Biden called passage of the COVID relief bill “a historic victory for the American people.”
The American Rescue Act includes $12.6 billion in additional federal Medicaid payments that states can use to expand home and community-based services (HCBS), where exposure to COVID is minimal compared to nursing homes.
The COVID relief legislation adds $4.5 billion for LIHEAP, the federally-funded program that helps keep low-income seniors’ homes heated and cooled — and invests more than $1.4 billion to strengthen critical programs for older adults — including nutrition assistance (such as Meals on Wheels), vaccination support, and caregiver support —under the Older Americans Act and the Elder Justice Act, among other provisions.
The American Rescue Act is the polar opposite of the Trump/GOP tax cuts in 2017, which mostly benefited the wealthy and large corporations. President Biden’s legislation actually helps those on the bottom and middle of the economic ladder the most. It is a ‘bottom up’ strategy for rebuilding the economy versus the failed ‘trickle down’ approach of Republicans from Reagan to Trump.
The National Committee salutes President Biden for his steely determination to enact this legislation, along with House committee chairs Rep. Richard Neal (Ways & Means), Rep. Frank Pallone (Energy & Commerce), and Senator Ron Wyden (Finance committee chair). We also thank Rep. Debbie Dingell for championing the HCBS provisions of the bill.
The bill passed the House on Wednesday with zero Republican support, despite public polling that shows some 75% of Americans across party lines support the package as whole. It now goes to President Biden for signature. He is expected to sign the American Rescue Act by Friday. In so doing, President Biden and Congressional Democrats will have enacted one of the most far-reaching, most compassionate pieces of legislation to help seniors and other everyday Americans since the Great Society.
COVID Relief Should be a Big Relief for Seniors
The Senate is expected to pass President Biden’s $1.9 trillion COVID relief bill over the next several days. Though concessions have been made to improve its chances of passage, the legislation remains the best hope of getting seniors and other struggling Americans the relief they so badly need.
Under the COVID relief act, millions of Social Security beneficiaries will be eligible for $1,400 stimulus payments to keep their heads above water financially. The legislation also contains crucial new funds for vaccinations, testing, and safer nursing home care that is so crucial to older Americans.
There is more good news in this bill for seniors. It also includes:
*$12.6 billion in additional federal Medicaid payments that states can use to expand home and community-based services (HCBS), which generally is a healthier option for seniors than nursing homes;
*47.8 billion for Coronavirus testing and mitigation;
*$4.5 billion for LIHEAP, the federally-funded program that helps keep low-income seniors’ homes heated and cooled;
*$276 million for aging and disability programs under the Elder Justice Act.
Seniors have been among the hardest hit by the pandemic, in terms of sickness and deaths, mental and emotional stress, and financial strain. The relief package should go a long way toward mitigating their pain.
“The vast majority of Americans believe this plan is essential to giving them help. It’ll grow the economy in the process. This is a lifeline for getting the upper hand against COVID. This isn’t some academic discussion. It’s about you, and people like you.” – President Biden, 3/5/21
We salute President Biden for his steely determination to enact this legislation, along with House committee chairs Rep. Richard Neal (Ways & Means), Rep. Frank Pallone (Energy & Commerce), and Senator Ron Wyden (Finance committee chair). We also thank Rep. Debbie Dingell for championing the HCBS provisions of the bill.
Once the COVID relief package passes the Senate, it will go back to the House for final approval and on to President Biden’s desk for signature. On Friday, National Committee president and CEO Max Richtman said, “The passage of this landmark legislation will be a great moment for all Americans who have struggled to survive and stay financially afloat during this pandemic, especially seniors, people with disabilities, and their families.”
Millionaires Are Done Paying Into Social Security for the Year
Today is the day most millionaires stop paying into Social Security for the rest of the year, while most of us will continue contributing FICA payroll taxes through the end of December. The payroll tax cap for 2021 is $142,800 in annual wages. As of today, people grossing $1,000,000 a year in wages have now exceeded the cap; hence, no more payroll contributions for millionaires until 2022. If that sounds unfair, it should be noted that billionaires stopped paying into Social Security in January!
In effect, higher income earners pay a significantly smaller percentage of their wages into Social Security than everyone else. This not only is patently unfair; it deprives Social Security of much-needed revenue. Without additional revenue, the Social Security trust fund will become depleted in 2035 (at which time the program could still pay roughly 80% of benefits).
It wasn’t always this way. In years past, 90% of wages earned in this country fell below the payroll tax cap. But due to rising wealth inequality in recent decades, only 82.5% of those earnings are now subject to the Social Security payroll tax.
“The extraordinary growth of income for those at the highest end of the wage scale was not anticipated by those who established the formulas that fund Social Security today. Wages for middle-and-lower income workers have remained stagnant for over a decade, while higher-wage workers have seen significant wage growth during that time.” – www.ncpssm.org
Even millionaires recognize this is unfair. As the advocacy group Patriotic Millionaires points out:
“The income cap is not only regressive, but unnecessary. It has been around since the tax began in 1937, but has not kept up with disproportionate wage growth or explosive wealth inequality. As a result, almost $2 trillion in earnings a year are not subject to the payroll tax, limiting the amount of revenue collected for Social Security.” – Patrioticmillionaires.org
The COVID economy is putting additional strain on Social Security’s finances. Some predict that the drop in payroll tax revenue from chronic unemployment will deplete the Social Security trust fund sooner than previously projected. Adjusting the payroll wage cap would be the surest way to forestall that unfortunate outcome.
The pandemic also has reminded us that Social Security is a financial lifeline to millions of American families. The program is there for older workers who are forced by the pandemic to retire early. It is also there for widows, widowers, and children of family breadwinners who pass away. Working Americans cannot afford to see Social Security’s finances further eroded because the wealthy don’t pay their fair share.
For years, we and other seniors’ advocates have supported “scrapping” the payroll wage cap – either immediately or over a period of time. After four years of a Trump presidency and GOP control of the Senate, we finally have a chance to make this happen. If Congress is able to muster the political will, Social Security’s finances can be strengthened in a fair and equitable way. The electorate has given us a golden opportunity. In fact, public opinion polling indicates broad support for eliminating the wage cap.
For his part, President Biden proposes to re-instate the payroll tax at $400,000 in annual wages. That closely tracks the payroll tax provisions in Rep. John Larson’s Social Security 2100 Act. Lifting the cap would extend the solvency of the Social Security trust fund. It also would help cover the cost of boosting Social Security benefits, which both President Biden and Rep. Larson want to do. The President would start by increasing benefits for some of the most financially vulnerable members of society — low-income workers, widows and widowers, and retirees over 85 years of age.
So-called ‘fiscal conservatives’ argue that Social Security must be cut in order to save it, by raising the retirement age, means testing or by other measures. We disagree. It’s unfair to ask seniors, workers with disabilities, and their families to bear the brunt of strengthening Social Security’s finances. The more equitable path is to ‘Scrap the Cap,’ so that the wealthy pay their fair share — and all Americans can count on the benefits they’ve earned over a lifetime of work.