The effects of the coronavirus may reduce Social Security payments for millions soon eligible to retire.
A Connecticut congressman has been leading the charge to change this.
Your Social Security payments have been determined in part by a formula that includes your earnings at age 60, two years before you’re eligible. Connecticut Congressman John Larson said for people turning 60 this year, when many workers’ wages are down, that could be catastrophic.
“What it could mean is a person born in 1960 would lose $2,000 a year for the rest of their lives,” Larson said.
That’s why Larson, a Democrat, and chair of a congressional Ways and Means subcommittee, held a hearing for his bill that proposes to change the Social Security payment formula so workers don’t get impacted by what everyone hopes is a one-year temporary dip in wages.
It’s welcomed by AARP Connecticut State Director Nora Duncan.
“It’s important for us to have the maximum benefit, we worked hard for this," she said.
It has also been very important to a majority of people of color, according to the Urban League of Greater Hartford. President and CEO David Hopkins told NBC Connecticut, “They rely on Social Security in many respects for their livelihood upon retirement.”
At least initially during Larson’s hearing, Congressional Republicans expressed they want this to be a bi-partisan effort.
U.S. Rep. Tom Reed, from New York’s 23rd district, said, “I am committed to working with you Mr. Chairman and all members of this subcommittee to take a close look at this issue, and make sure we get it right”
That sounded just fine with Bette Marafino with the Connecticut Alliance for Retired Americans. She pointed out Social Security is one of the best economic stimulus items you find, something welcomed these days.
“They’re going to go, buy their grandkids presents, they’re going to go, go to the movies go out to eat and it just makes good economic sense.”
The Social Security Chief Actuary estimates the change Larson wants will cost $20 billion initially, and $90 billion in the decades following. Larson says this is dwarfed in comparison to the trillions spent on the Cares Act, and the 2017 tax cuts.
Larson’s bill, called The Social Security COVID-19 Correction and Equity Act, also calls for:
- Increasing Social Security benefits by 2 percent;
- Increasing the threshold to 125 percent of the poverty level for the special minimum benefit, lifting more lifelong workers out of poverty;
- Reducing taxation on benefits for lower-middle-income beneficiaries who are struggling to provide for themselves and their families;
- Including provisions to help grandparents provide for dependent grandchildren, assist dependent students so that they can get the education they need to get a good job, expand benefits for dependent widows/widowers so they can make ends meet, and provide more help to the poorest of all by expanding eligibility for Supplemental Security Income