Bipartisan legislation has been introduced in the U.S. House of Representatives that would substantially increase the payroll cap on Social Security taxes.
The Save Our Social Security Act, introduced by Rep. Reid Ribble, R-Wis., has four other Republican cosponsors, along with one Democrat.
Under existing law, the 12.4 percent Social Security tax applies to the first $118,500 of earners’ wages. The S.O.S. Act would raise that to $156,550 for fiscal year 2017. The cap would rise repeatedly until reaching $308,750 for 2021.
The proposed legislation would also raise full retirement from age 67 to 69, which would be phased in beginning in 2022 over the course of the subsequent 12 years. The maximum retirement age would be increased from 70 to 72.
Those provisions, along with changes to how benefits are calculated, and how cost of living adjustments are indexed to inflation, would put the Social Security program on the road to solvency, “with all scheduled benefits fully payable on time” during a 75-year projection period, according to actuaries at the Social Security Administration.
How far the proposed legislation gets remains to be seen.
The U.S. Chamber of Commerce has come out in strong support of efforts to advance the debate on Social Security reform. Although it did not explicitly endorse the exact provisions in the Ribble legislation, it did say the approaches taken in the S.O.S. Act are “worth considering carefully.”
In a statement announcing its introduction, Ribble said the proposed increases on earnings caps would mean Social Security would be collecting on 90 percent of the country’s total payrolls, a level equal to that under the Reagan administration, as opposed to the 81 percent of total payroll collected on today.
About the Author
Will has enjoyed a 20-year career in leadership positions in the hospitality and travel industry throughout the U.S. with the Hyatt, Sheraton, Hilton, Renaissance and Steamboat Ski and Resort corporations. Will received a Bachelor of Science degree from the University of Massachusetts at Amherst. From 2000-2007, he served as President and CEO of the Greater Colorado Springs Chamber of Commerce. He also served as Vice President-Special Projects for the University of Colorado Foundation from 2007 to 2009. Will is a past Chair of the Board of Directors of the National Homeland Defense Foundation and former member of the United States Chamber of Commerce Committee of 100. He is married to Nan, has five wonderful children, and enjoys coaching, traveling, hiking, golfing and skiing.