5 Ways Joe Biden Wants Social Security to Change

Social Security: It might be one of the hottest topics of this presidential campaign season.

But when anyone can post anything on social media and even the candidates themselves have hurled falsehoods at each other, it can be seemingly impossible to tell where a candidate stands, especially on a hot-button issue like Social Security.

To give you a better understanding of where the challenger, former Vice President Joe Biden, stands, we dissected his Social Security plans as detailed in his official platform.

We did the same for incumbent President Donald Trump as well, although he has formally said little about his Social Security plans.

1. Increased Social Security taxes for high-wage earners

Biden’s plan: “… asking Americans with especially high wages to pay the same taxes on those earnings that middle-class families pay.”

Specifically, Biden’s plan calls for “raising payroll taxes for workers with more than $400,000 in earnings.” The change is in an effort to improve Social Security’s long-term solvency, according to his campaign website, but his campaign did not respond to questions about this proposal or others in this article.

Currently, there is an earnings cap for the 6.2% Social Security tax that is withheld from employees’ paychecks (the “payroll tax”) and the 6.2% Social Security tax that employers pay on behalf of employees. For 2020, the cap is $137,700.

That means the Social Security payroll tax applies only to a worker’s first $137,700 in earnings. In other words, Americans who earn more than $137,700 currently do not owe Social Security taxes on money they earn above that amount.

2. Higher survivor’s benefits for spouses

Biden’s plan: “… allow [a] surviving spouse to keep a higher share of the benefits … raising the monthly payment by about 20% for affected beneficiaries.”

When a spouse dies, the household does not continue to receive two Social Security payments each month. Generally, widows and widowers either continue receiving their own benefit or instead receive 100% of the amount their spouse was receiving, known as their survivor’s benefit — whichever is more. Social Security expert Jeff Miller breaks this down further in “If My Spouse Dies, Can I Get Her Social Security?”

Biden’s plan presumably would increase the larger of the two amounts that a surviving spouse receives by about 20%.

Interestingly, many survivors could increase their monthly payment right now by simply switching from their own benefit to their survivor’s benefit, according to a recent audit by the Social Security Administration’s Office of the Inspector General. The audit found that many beneficiaries who are eligible for survivor’s benefits don’t even know it — meaning some are missing out on retirement income to which they are entitled.

3. Increased benefits for the oldest retirees

Biden’s plan: ” … provide the oldest beneficiaries — those who have been receiving retirement benefits for at least 20 years — with a higher monthly check to help protect retirees from the pain of dwindling retirement savings.”

Biden’s campaign website does not specify how much more these beneficiaries would receive in Social Security benefits under his plan, and his campaign did not respond to a question about this.

4. Let pensioners keep their full benefits

Biden’s plan: “… get rid of the benefit cuts for workers and surviving beneficiaries who happen to be covered by both Social Security and another pension.”

This presumably means Biden wants to repeal a provision of the Social Security Act known as the Windfall Elimination Provision, or WEP, which applies to certain government workers.

The Biden campaign did not respond to a question about this proposal, but you can learn more about the WEP itself by reading Social Security expert Russell Settle’s column “What’s the Windfall Elimination Provision?”

5. New minimum benefit

Biden’s plan: “… workers who spent 30 years working will get a benefit of at least 125% of the poverty level.”

This proposal is in an effort to “revolutionize the Social Security’s minimum benefit, which has deteriorated over time to the point of being entirely ineffective,” Biden’s campaign site explains.

The campaign site links to a 2015 report on Social Security policy options from the Congressional Budget Office, which details the problem with the current minimum-benefit formula: It’s tied to prices, whereas the standard-benefit formula is tied to earnings, which tend to grow faster than prices. As a result, fewer people receive the current special minimum benefit each year.

What about Trump’s Social Security plans?

Trump’s plan: “Protect Social Security …”

President Trump’s second-term agenda is more of an outline, with exactly three words about Social Security. But you can judge him by his first term as well.

The last time I checked, the Social Security system was still there, albeit a little worse for the wear of this year’s recession, by some estimates. Perhaps the only way that Trump has tried to tinker with the system is via his recent executive memorandum about the Social Security payroll tax.

The Aug. 8 executive action enables employers to defer the employee portion of the Social Security payroll tax during the last four months of this year. The measure is temporary — the deferred taxes must be repaid in the first four months of 2021 — but Trump has said he would make it permanent next year, effectively creating a four-month-long payroll tax cut.

So as not to hurt Social Security, Trump has said he would use money from the Treasury Department’s general fund to reimburse the Social Security system for the lost income. Trump has not specified, however, whether he would reimburse the Social Security system for only the lost payroll taxes or also for the interest those taxes could have generated for the Social Security system. His campaign didn’t respond to a question about this, either.

Even if Trump succeeds in making his Social Security payroll tax deferral permanent, though, it won’t be anything you haven’t seen before. In February 2012, on the heels of the Great Recession, then-President Barack Obama signed into law the Middle-Class Tax Relief and Job Creation Act, which extended a payroll tax cut through the end of that year.

The 2012 payroll tax cut was financed the same way Trump has proposed financing his would-be payroll tax cut: by “transferring resources from the government’s general coffers to the Social Security Trust Fund,” as Jon Carson, former deputy assistant to Obama and former director of the White House Office of Public Engagement, explained it back then.

What it means for you

If you are worried about the Social Security system, then you are wasting your time by fretting about the latest accusation one presidential candidate hurled at the other or the latest political propaganda you saw on Facebook.

No president can do much of anything about Social Security on his (or her) own. When Biden and Trump talk about their plans for Social Security, they are more accurately describing their wish list for the system.

The Social Security system is largely enshrined in federal laws like the Social Security Act, which created the system in 1935, and the Federal Insurance Contributions Act, aka FICA, which governs the Social Security payroll tax. And it’s not the president but federal lawmakers who have the power to revise existing federal laws or pass new ones.

So, if you are concerned about the system, it’s the Social Security plans of your U.S. senators and U.S. representatives that you should be researching right now.