According to the Social Security Administration’s chief actuary, lifting the cap on payroll taxes and expanding the benefits would increase the Social Security trust by up to 40 years, from 2034 to 2074.
How does Sanders plan to lift the cap on payroll taxes extend the Life of Social Security?
Sanders is the sponsor of the Social Security Expansion Act. To pay for an expansion in benefits, the bill would lift the contribution limit on the Social Security payroll tax, which now applies to earnings up to $118,500.
Sanders challenged Clinton to support his legislation to extend Social Security
Vermont Senator Sanders: And here’s an area where Secretary Clinton and I believe we have a difference. I have long supported the proposition that we should lift the cap on taxable income coming into the Social Security Trust Fund, starting at $250,000. And when we — and when we do that, we don’t do what the Republicans want, which is to cut Social Security. We do what the American people want, to expand Social Security by $1,300 a year for people under $16,000, and we extend the life of Social Security for 58 years.
Stephen Goss, chief actuary for the Social Security Administration, twice has looked at the financial impact of Sanders’ bill on the combined Old-Age, Survivors, and Disability Insurance trust funds.
In a March 26, 2015, letter to Sanders, Goss projected that under Sanders’ bill, “the year of reserve depletion for the combined OASDI Trust Funds would be extended by 32 years, from 2033 under current law to 2065.”
A year later, Goss increased the projected lifespan of the trust funds by another eight years to 40 years.
“Assuming enactment of the proposal, we estimate the funding for the combined OASI and DI Trust Funds would be sufficient to extend the projected year of reserve depletion from 2034 to 2074,” Goss wrote in a Feb. 4 letter to Sanders.
Under current law, full scheduled benefits would continue through 2033 and then drop to 79% in 2034, 74% in 2074 and 73% in 2089, Goss wrote. But under Sanders’ bill, full benefits would be paid through 2073, with benefits being reduced to 88% in 2074 and 87% beginning in 2089.
A Sanders spokesman told us the senator was referring to “58 years from now,” meaning from 2016 to 2074. But Sanders said “we extend the life of Social Security for 58 years,” taking credit for 18 years when the Social Security trust funds will pay out full benefits whether his bill passes or not.