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“The first thing we are going to do is reduce people’s costs and work the legislative process so it does.”
That was Senate Minority Leader Chuck Schumer on Nov. 4, the day after Democrats won control of both the House and the Senate in the midterms.(1)
Newsweek reported the same day that Democrats’ win could put some of the party’s most ambitious Social Security proposals back on the congressional agenda.(2)
One of the biggest comes from Sen. Bernie Sanders. In an Aug. 3 letter to colleagues, he wrote that a plan to tax all income above $250,000 a year would “increase benefits by $2,400 a year,” citing a 2023 finding by Social Security’s chief actuary.(3)
An extra $200 a month sounds great. But I’ve been a CPA since 1981, and my advice is to plan around the law as it is, not the law someone hopes to pass.
Here’s the problem: President Donald Trump says he has a “strong veto,” and on election night he posted a picture of a red cap stitched with the word “VETO,” the Associated Press reported.(4)
In other words, no matter what laws are proposed, they don’t pass without Trump’s approval.
So before you spend a raise that doesn’t exist yet, here are 5 things to know.
1. Plan on the law as it is today
Here’s the part that gets less attention. Under current law, Social Security’s retirement trust fund can pay full benefits only until 2032. After that, incoming taxes would cover about 78% of benefits.(5)
Sanders makes the same point in his letter, warning that “if Congress does not act within the next six years, Social Security benefits will be cut by 22 percent.”(3)
On the average retired worker’s check of $2,071 a month, a 22% cut would be about $456 a month.(6)
That’s why I’d build your plan around today’s benefit, and treat any raise as a bonus.
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2. Know what’s actually on the table
There’s more than one plan.
Sanders’ letter describes taxing income above $250,000 a year, including capital gains and dividends, to pay for bigger benefits.(3)
The Social Security 2100 Act, introduced in the House by Rep. John Larson in June and in the Senate by Sen. Richard Blumenthal in July, would “increase benefits for current and new beneficiaries,” paid for partly by “eliminating the Social Security tax cap.”(2)(7)
Neither has passed.
3. Count the votes
Democrats had won 54 Senate seats as of Nov. 4, with two races (Alaska and Mississippi) still uncalled.(1) Most bills need 60 votes in the Senate to get past a filibuster.(8)
Then there’s the veto. Overriding one takes the votes of two-thirds of the members voting in each chamber.(9)
Put those together, and a big Social Security expansion probably needs the president’s signature. My read: Unless Trump and Democrats strike a deal, a $2,400 raise isn’t coming soon.
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4. Squeeze more out of the check you already get
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5. If you’re still working, you could pay more
Today, workers and employers each pay 6.2% on wages up to $184,500 in 2026.(2)(6)
Lifting that cap would mean high earners pay on more of their pay. And Sanders’ version would also reach capital gains and dividends above $250,000 a year.(3) If you’re a working retiree with a big salary or large investment income, that’s the part to watch.
My honest take
Both sides say they want to protect Social Security. Democrats will soon have the gavels, and Trump has the veto pen.
That’s not a recipe for a quick raise. It might, though, be a recipe for a deal, because the 2032 deadline doesn’t care who won the midterms.
So hope for the $2,400. Plan for the check you already get. And keep an eye on Washington, because the fix, whenever it comes, will decide what your benefit looks like for the rest of your life.
Sources: 1. Spectrum News; 2. Newsweek; 3. Sen. Bernie Sanders; 4. Associated Press via PBS NewsHour; 5. Social Security Trustees Report; 6. Social Security Administration; 7. Sen. Richard Blumenthal; 8. Cornell Law School Legal Information Institute; 9. Congressional Research Service
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