The chairman of the House Ways and Means Social Security Subcommittee, Rep. Sam Johnson, R-Texas, has introduced legislation to make changes in Social Security, including raising the retirement age.

The Social Security Reform Act of 2016 would gradually update the full retirement age at which workers can claim benefits. It would raise the age to 69 for those who qualify for "early retirement age" after Dec. 31, 2029.

It would also change how benefits are calculated to increase benefits for lower-income workers while slowing the growth of benefits for higher-income workers. Other changes would alter the formulas for calculating the annual cost-of-living adjustment and Social Security benefits.

The bill would also eliminate the Retirement Earnings Test for everyone to enable workers to receive benefits without a penalty while they are working, or fully delay retirement and wait to receive benefits. For those who delay claiming benefits, they can receive increases in a partial lump sum or add it all to their monthly check.

“For years I've talked about the need to fix Social Security so that our children and grandchildren can count on it to be there for them just like it’s there for today’s seniors and individuals with disabilities,” Johnson said in a statement Thursday. “My commonsense plan is the start of a fact-based conversation about how we do just that. I urge my colleagues to also put pen to paper and offer their ideas about how they would save Social Security for generations to come.  Americans want, need, and deserve for us to finally come up with a solution to saving this important program.”

Democrats saw drawbacks in the Republican proposal. Rep. Richard Neal, D-Mass., the incoming ranking member of the House Ways and Means Committee, criticized the legislation, saying it would ultimately cut benefits.

“Less than one week after Speaker Paul Ryan told 60 Minutes that he had no plans to change Social Security, the Republican Chairman of the Social Security Subcommittee introduced a bill that would dramatically cut Social Security benefits,” Neal said in a statement Friday. “As Congressional Republicans prepare to dismantle Medicare and Medicaid, it now appears that Social Security has been added to the Republicans’ chopping block. America’s seniors will be alarmed to hear that the top Republican on this important Subcommittee quietly put forward a plan to drastically cut Social Security benefits for millions of seniors. Instead of honoring the promises made to our seniors, the Republican plan would amount to a massive cut in Social Security benefits for working Americans through cuts to the cost-of-living adjustment (COLA), raising the retirement age to 69 and cuts to the benefit-computation formula. Ultimately, this translates to a 30 percent or more cut in benefits for middle-class retirees. Social Security is the bedrock of retirement security—a benefit that seniors have earned through contributions over a lifetime of work. We should be strengthening Social Security, not cutting it. Democrats will fight any effort to undercut Social Security, just as we will fight any plan to replace Medicare with a voucher.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access