But depending on the outcome of the November election, some of the measures could serve as inspiration for the next president if he or she decides to tackle Social Security reform. In general, Democrats oppose benefit cuts and Republicans object to tax hikes, but both sides are going to have to compromise to find a workable solution before it is too late.
The most recent Social Security and Medicare trustees report issued in June reiterated earlier forecasts that the program's trust fund reserves would run dry in 2034 unless Congress takes steps to before then. Despite that dire prognosis, several of the bills introduced over the past two years would expand Social Security benefits and pay for them by raising taxes on the wealthy.
Most notably, the Social Security Expansion Act (S. 731), introduced by former Democratic presidential candidate Bernie Sanders in March 2015, would increase benefits for all eligible beneficiaries by about $65 per month; switch the official inflation measure from the more general CPI-W to the CPI-E, which proponents say more closely reflects the actual expenses of the elderly; and immediately subject earnings above $250,000 to the payroll tax.
Currently, employers and employees each pay 6.2% in FICA taxes on the first $118,500 of earnings. The taxable wage cap is indexed to inflation. An additional 1.45% payroll tax is imposed on employers and employees on all earnings, even those above the wage cap, to finance Medicare. Self-employed individuals pay the combined tax rate of 15.3%.
