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WASHINGTON – Senator Elizabeth Warren of Massachusetts unveiled Thursday a plan to give $ 200 more per month to all social security recipients and pay for it by raising taxes on the rich, her latest economic proposal to redistribute wealth in the United States.
Warren, whose support has steadily grown during the Democratic presidential race vote, announced the plan in anticipation of a primary democratic debate Thursday night. The proposal seemed to be aimed directly at elderly voters who gravitated around former Vice President Joseph R. Biden Jr., who has been the favorite in the primary campaign so far.
"It's time for Washington to stop trying to reduce social security benefits for the people who earned them," Warren wrote in an article on Medium. "It's time to extend social security."
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Warren's proposal would significantly increase the government's spending on social security, which is already the largest federal program, accounting for about a quarter of the budget. The bulk of his plan to increase benefits to 64 million beneficiaries by $ 200 a month would cost more than $ 150 billion in the first year.
The plan would also fundamentally change the funding structure of the program, forcing the very rich to pay much more taxes to social security than they would benefit from, while most Americans would get a lot more than what they pay.
Warren's proposal is the latest sign that Democrats have stopped pledging to protect social security benefits – or, in the case of former President Barack Obama, proposing to slow the rate at which benefits increase with time – to expand the program and increase it.
Democrats of the House are considering a vote on a bill that would increase profits and consolidate the future finances of the program by increasing the taxes that fund the program for middle- and high-income workers.
Social security is popular with voters, but polls show that they worry about its solvency. Attempts to change the program and reduce benefits have long been considered a "third pillar" of US policy.
Earlier this year, a government report revealed that the cost of social security would exceed its revenues in 2020 for the first time since 1982. The program's reserve fund is expected to be exhausted in 16 years, during which time beneficiaries would receive payments lower than what they were. are scheduled to receive, if the Congress does not act.
Older Americans, who would see the most immediate benefits of Warren's proposal, represent a considerable voting block in the Democratic primary race. In 2016, nearly three in ten Democratic Caucus voters in Iowa were 65 and older, according to polls from voters entering the caucus.
Mr Biden proposed to increase social security benefits for older Americans as part of a plan to strengthen the program. In February, Vermont Senator Bernie Sanders released a plan to increase the solvency of the over 50-year program for taxpayers earning more than $ 250,000 a year.
Social security recipients earn an average of $ 16,248 a year, and Warren proposes an increase of $ 2,400 annually. The plan would also review how annual increases in the cost of living are calculated so that benefits increase more rapidly over time. And that would create a new social security credit for people leaving the workforce to care for their family members – an advantage that, Warren says, would make the social protection program fairer for women.
Like many of Warren's major policy proposals, the plan to expand social security has a particular source of funding: the rich. Under the plan, Warren would impose a new payroll tax of 14.8 percent on people earning over $ 250,000 a year, which workers and their employers would share, and a tax on investment earnings of 14 percent. , 8% applicable to the 2% most profitable. employees.
The Warren campaign, citing an analysis conducted by Moody's Analytics, estimated that the plan would reduce the federal budget deficit by $ 1.1 trillion over 10 years.
Warren's plan to accelerate increases in the cost of living for social security benefits represents a dramatic change from a 2013 Obama proposal that would have slowed the rate of increase over time by switching to a different inflation measure known as the "Chained Consumer Price Index". This idea, which had been launched with the aim of reaching a budget agreement with the Republicans, was finally abandoned.
As a candidate, President Trump promised not to reduce social security and initially avoided tackling the program's shortfall. However, in the White House's draft budget in March, Trump called for a $ 26 billion cut in spending on social security programs, including a $ 10 billion reduction in the program's spending. Social security disability insurance, which provides benefits to disabled workers.
Mark Zandi, chief economist at Moody's Analytics, who reviewed Warren's proposal for the campaign, said it would increase the solvency of social security by nearly 20 years.
In his analysis, Zandi noted that Warren's inclination to finance new spending by taxing the rich could have a significant impact on the economy. Ms. Warren, he wrote, "has put forward a number of other economic policy plans, including affordable housing, student loans, clean energy and child care, which are also largely financed by significantly higher taxes on high and high incomes. net worth of households. "
"Given this financial burden," he added, "there could be significant behavioral changes on the part of these households that are difficult to assess."
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