Millions of Americans who rely on Social Security, SSI, SSDI, and VA benefits could see significant changes in their monthly checks if Congress passes the Social Security 2100 Act. This proposed legislation, first introduced by Rep. John Larson, aims to modernize the Social Security system, enhance benefits, and ensure its long-term solvency.
Here’s what the Act could mean for you, broken down in simple terms:
1. More Money in Benefits
The Social Security 2100 Act proposes a 2% increase in benefits for all Social Security recipients. While this might not sound like much, it’s the first across-the-board benefit hike in over 50 years. For retirees and disabled Americans, every dollar matters when it comes to managing daily expenses.
2. Better Cost-of-Living Adjustments (COLA)
COLAs have long been criticized for not keeping up with the rising cost of essentials like housing and healthcare. The 2100 Act proposes switching to a new formula, called the Consumer Price Index for the Elderly (CPI-E). This would better reflect the inflation seniors actually experience, helping your benefits stretch further.
3. Higher Minimum Benefits for Low-Income Workers
Under current rules, some Social Security benefits fall below the federal poverty line. The new law would fix that by increasing the minimum benefit to ensure that no one who has worked and paid into the system for years ends up struggling in poverty.
4. Tax Breaks for Beneficiaries
Many Social Security recipients pay taxes on their benefits if their income exceeds a certain threshold. The Act would increase these income thresholds to $35,000 for single filers and $50,000 for married couples, reducing the tax burden for millions.
5. Help for Widows, Widowers, and Caregivers
The Act also aims to improve benefits for surviving spouses, ensuring they receive a higher portion of their deceased partner’s benefits. Additionally, caregivers—many of whom are women—would receive credit for the years they spend out of the workforce caring for loved ones, preventing them from being penalized in retirement.
6. Eliminating Unfair Offsets
Public workers like teachers and police officers often see their Social Security benefits reduced by the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The 2100 Act seeks to repeal these provisions, allowing them to receive full benefits.
How Will This Be Funded?
Of course, all these changes come with a cost. To keep Social Security funded, the bill proposes some tax adjustments:
- Raising Taxes for High Earners: Currently, income above $160,200 isn’t taxed for Social Security. This Act would apply payroll taxes to earnings over $400,000, with higher earners contributing more.
- New Investment Income Tax: A 12.4% tax would apply to investment income for individuals earning over $400,000, helping close tax loopholes.
What’s Next for the Bill?
The Social Security 2100 Act is still making its way through Congress, and it faces opposition from some lawmakers. If passed, it would bring long-awaited changes to millions of Americans, especially those who depend on Social Security to make ends meet.
While there’s no provision for a $2,600 monthly increase for SSI, SSDI, and VA recipients, the proposed 2% raise and other improvements are designed to offer meaningful relief for low-income families, retirees, and disabled individuals.
For now, it’s crucial to stay informed as the legislation progresses. These changes, if enacted, could reshape the financial future of countless Americans who rely on Social Security for stability and support.
