Bill would tax the rich to fund a Social Security adjustment for millions of seniors and veterans.
Millions of seniors and others on Social Security know that every dollar counts towards their daily living needs. But now a Senate bill is hoping to correct a flaw in the way that the government calculates cost-of-living increases for Social Security recipients that otherwise could put them at risk of losing ground to inflation.
The problem arises because Social Security calculates cost-of-living adjustments are based on workers’ experiences, not on the living costs faced by seniors, veterans and the disabled, who have very different daily expenses. Senator Elizabeth Warren of Massachusetts and 18 co-sponsors have introduced legislation to address the problem, according to the Huffington Post.
The proposal for a temporary solution would come into effect this January, in time to make up for the lack of an adjustment for 2016, and is intended to give Congress time to create a longer-term solution.
The bill, called the Seniors and Veterans Emergency Benefits Act, would give SSI recipients including seniors, veterans, and people with disabilities a one-time payment equal to 3,9 percent of the average Social Security benefit, or about $580. The 3.9 percent figure comes from the percent pay raise that the top 350 CEO’s in the U.S. earned last year.
The funds for the additional Social Security checks would come from the wealthiest Americans through a provision in the bill that calls for closing the “performance pay” loophole that allows high earners to take tax deductions on performance-based compensation over $1 million. So-called performance pay is required to be tied to success metrics, but studies show that even CEOs who preside over massive losses have collected millions in such compensation.
For example, the CEO of the Caesar’s casino company received $10 million in deductible “performance pay” during two years when the company suffered $1.5 billion in losses.
While Warren’s bill would address the gap in Social Security’s failure to keep pace with inflation, it would not expand the program, as many advocates suggest is needed.
