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With Social Security fund running dry, CT Democrats push for reform

Connecticut Congressman John Larson speaks to the media before the service for former U.S. Senator and Connecticut Gov. Lowell Weicker at St. Barnabas Episcopal Church.
Shahrzad Rasekh
Connecticut Mirror
Connecticut Congressman John Larson speaks to the media before the service for former U.S. Senator and Connecticut Gov. Lowell Weicker at St. Barnabas Episcopal Church.

With thousands of older Americans qualifying for Social Security every day and more people relying solely on those benefits for income, federal lawmakers are raising concerns about the lack of action on Social Security and the risks associated with financial instability.

The issue of Social Security comes up regularly in Congress, but there has so far been little consensus between the parties on how exactly to keep it financially afloat. Members of Connecticut’s delegation are reigniting their push to strengthen the government program and at the very least, pressure members to take votes on proposed reforms.

Rep. John Larson, D-Conn., recently reintroduced legislation that would increase benefits by 2% for the first time in 52 years, bolster the program’s solvency by requiring higher earners to contribute more to payroll taxes and boost the cost of living adjustment to better reflect current inflation. Sen. Richard Blumenthal, D-Conn., has also reintroduced the companion bill alongside Sen. Chris Van Hollen, D-Md.

Social Security is “currently the number one anti-poverty program for children and for the elderly and the best gap closer in terms of the disparity of wealth in the country,” Larson said in an interview.

“This is nothing that the president can do by executive order, and it’s nothing that the Supreme Court is going to adjudicate, so the only body that can fix this is the United States Congress,” he added. “And Congress has not enhanced the program since Richard Nixon was president.”

How many people in CT receive Social Security?

A sizable number of seniors and others who are eligible in Connecticut benefit from Social Security. And many of them almost completely depend on the program for income.

About 708,000 people in Connecticut – about 20% of the state’s population – received benefits, according to December 2022 data from the U.S. Social Security Administration.

More than three quarters of beneficiaries in the state are retired workers, while about 10% of them are receiving disability income. Smaller percentages of those beneficiaries are children and people receiving survivor benefits from deceased spouses or family members.

In total, beneficiaries in Connecticut are receiving an annual $13 billion, according to an American Association of Retired Persons analysis of July 2022 data. The average retired workers benefits were about $1,700 a month and the average disability benefits were about $1,300 a month.

Between 2018 and 2020, about 156,000 people who were 65 and older were lifted out of poverty in the state because of Social Security benefits.

Social Security contributes to at least half of the income of more than a third of beneficiaries who are 65 and older. And for those in that same age bracket, Black residents disproportionately rely on those benefits for 90% of their income compared to white residents in Connecticut.

How would legislation reform Social Security?

Current estimates show depletion of the Trust Fund for old age and survivors insurance in the early to mid 2030s, which could result in people receiving reduced benefits amounting to about a 20% cut. But lawmakers and advocates emphasized that the program will remain intact even with challenges surrounding its solvency.

“We certainly have a finite period of time,” Blumenthal said in an interview. “There’s no drop dead date for Social Security, but there is a sense that some action is necessary sooner rather than later.”

With the bill’s reintroduction since the last session of Congress, Larson said the Social Security 2100 Act would have “closed a loophole” with the payroll tax, which he believes could extend the solvency of the Trust Funds to 2066.

Social Security is funded through a payroll tax that is split between employers and employees, but there is a cap on taxable income, with this year’s set at $160,200. If the bill were to pass, it would also apply payroll taxes to wages over $400,000, while adding an additional net investment income tax for those earning more than $400,000. That proposal is in line with President Joe Biden’s own guidelines on tax increases.

The issue has been a top focus during Larson’s career, especially serving as the top Democrat of the House Ways and Means Social Security Subcommittee. His legislation, along with Blumenthal’s companion bill, has support from Connecticut’s congressional delegation.

While most Democrats in the House have signed onto the legislation, there are currently no Republican co-sponsors, which is needed in order to pass the GOP-led chamber. The bill would similarly need bipartisan support to get through the Democratic-controlled Senate.

Larson is currently working on building support from Republican members. He said he sent every member of Congress a card showing the number of constituents on Social Security in their districts. And he noted that several GOP initiatives were incorporated into his bill.

One of those is a bipartisan measure from Rep. Garret Graves, R-La., and Rep. Abigail Spanberger, D-Va., to eliminate the Windfall Elimination Provision and the Government Pension Offset. Those provisions can hurt Social Security recipients — particularly public service workers — by reducing their benefits because they are also collecting a pension.

Still, no Republicans, including Graves, have signed onto Social Security 2100. That lack of momentum from the GOP means the legislation will stall for the foreseeable future.

“There is an understanding there needs to be Security Security reform, but I think my Republican colleagues are a little bit fearful of the specifics. They’ve been burned before, principally by proposals to privatize Social Security, which I strongly oppose,” Blumenthal said. “The issue has therefore become somewhat polarized.”

Aside from Social Security 2100, Sen. Bernie Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass. proposed similar legislation that increases benefits by $200 per month. Their measure could prolong the program’s solvency for another 75 years by having a larger group of higher earners — those who make over $250,000 — subject to payroll taxes.

Larson said he welcomes all proposals looking to strengthen Social Security and urges both chambers to hold a vote to put members’ position on the record.

“I think there’s going to be a tremendous amount of pressure for [Republicans] to vote,” Larson said. “Any bill introduced – how about they have a vote, either chamber, [on] any plan?”

Can Congress find a compromise?

The biggest disconnect between the parties on Social Security is over the retirement age and whether the program should be funded through tax increases or spending cuts.

That debate hit a fever pitch when Congress negotiated must-pass legislation to raise the country’s borrowing limit or risk defaulting on its debt. Republicans sought spending cuts in order to get their support for raising the debt limit. Democrats argued their push would hurt Social Security, Medicare and Medicaid, but those government programs were excluded from cuts in the bill passed last month.

GOP efforts to reform Social Security are still on the table in other capacities. A budget outline from an influential group of conservative House Republicans proposed, among other things, gradually raising the age for when retirees can receive full benefits from 67 to 69, though the outline emphasizes it would not apply to current retirees or people approaching retirement or cut or delay their benefits.

Bette Marafino, president of the Alliance for Retired Americans’ Connecticut chapter, said her group opposes efforts to privatize the program in addition to raising the retirement age. She said she has been in frequent contact with Larson about congressional efforts on Social Security and has spoken with other congressional offices.

She argued that Congress needs to shore up Social Security for current recipients and especially future generations, pointing to the growing number of people completely relying on the program to afford rent, food and other necessities.

“We know that that is going to get even higher … because so many younger people working today, they don’t really have the defined benefits package,” Marafino said. “They will not have benefits from their retirement and it will be the only source of their income.”

While finding compromise to broadly reform Social Security has been challenging, there is some common ground within Congress to tackle some parts of the government program, including reforms to two provisions that can significantly reduce benefits for public employees.

The legislation from Graves and Spanberger is one of the only bills related to Social Security that has garnered support from both Democrats and Republicans, though it only addresses part of the program and not the program at large. Efforts around eliminating those provisions have broad support from teachers, firefighters, police officers and others who work in public service.

On the Senate side, Sen. Bill Cassidy, R-La., is working with Sen. Angus King, an independent from Maine who caucuses with Democrats, on the issue. They have explored creating an independent investment fund, though some Social Security advocates like Marafino worry about attempts to privatize the program. The pair of senators have acknowledged that they are still working out the details of their plan and no legislative text has been released.

“There are dozens of considerations being weighed to protect Social Security, including locking early retirement at 62, an ironclad protection for lower-wage workers, and seeking avenues to increase benefits immediately,” Cassidy and King said in a joint statement from earlier this year. “Under what we are discussing, millions would immediately receive more, and no one would receive less.”

Lawmakers, including Larson and Blumenthal, acknowledge that any proposal requires bipartisan support to get through Congress and make it to the president’s desk.

Given the political environment, AARP said it would like to see Congress devise a bipartisan plan to address Social Security. The influential group that advocates on behalf of seniors does not support or endorse specific legislation, but said it generally advocates for the solvency of the program and expects all candidates to have a plan.

“We want to make sure that we have an approach that has the buy-in of the American people,” AARP said, adding that the group is pushing for “a long runway where we have many, many years or decades of certainty and that’s what we’re really after.”

The Connecticut Mirror/Connecticut Public Radio federal policy reporter position is made possible, in part, by funding from the Robert and Margaret Patricelli Family Foundation and Engage CT.

This story was originally published by The Connecticut Mirror.

Lisa Hagen is CT Public and CT Mirror’s shared Federal Policy Reporter. Based in Washington, D.C., she focuses on the impact of federal policy in Connecticut and covers the state’s congressional delegation. Lisa previously covered national politics and campaigns for U.S. News & World Report, The Hill and National Journal’s Hotline.

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