Joe Biden’s Social Security plan reduces elder poverty but doesn’t fix trust fund insolvency, a new report says
which would bring them to 93%/108% of poverty, as well as Medicaid benefits to cover medical costs. The program is available to low-income Americans of age 65 or older ; non-citizens generally do not qualify.
Biden’s plan would increase benefits to 100% of the single-person poverty level; for couples, benefits would be doubled rather than only increased 50%. He would eliminate the reductions for beneficiaries who live in someone else’s home “for free” , and boost the asset limits in the eligibility test. Now, as it stands, “100% of poverty” on a net-income basis is exactly the cut-off for SNAP eligibility, so whether it’s all a wash or the eligibility is adjusted is unclear.
Taken in total, do these changes “work”? The Urban Institute analyzes them in a couple ways, first by assessing the degree to which lower income workers would benefit, relative to the rest — over 50% of the caregiver credits’ benefits would go to the bottom fifth when fully phased in in 2065, for example, and nearly 50% of the minimum benefit expansion. At the same time, less than 5% of the WEP/GPO repeal’s benefit increase would go to the bottom fifth.
Additionally, they calculate impacts of these changes on the poverty rate for those over age 62 or receiving Social Security benefits due to disability. Without changes, the existing poverty rate in 2021 would be 8.1%; with Biden’s Social Security changes, it would fall to 7.4%. With his SSI changes, it would drop to 5.8%. In 2065, the current-law old/disabled rate is forecast to be 5.0%. With his Social Security changes, it would drop to 2.9%. With is SSI changes as well, it would be 2.1%.
Now, I’m a supporter of some of these basic changes that boost minimum benefits, but I can’t figure out for the life of me why Biden would propose a plan which doesn’t solve the fundamental issue of the insolvency of the trust fund and the need to shore up the finances through a dedicated tax or, if not, the legislative authorization of the funding of deficits through general tax revenues.
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