Manchin Proposes ‘Easiest’ Social Security Fix In Response to Debt Ceiling — Would Biden Agree?

On Jan. 19, the US officially hit its debt, spending all of the $31.4 trillion available in spending as allocated by the Treasury. In the days since, conversations have heated up about how the country will move forward to avoid total spending and financial crisis.

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Unless Congress acts before the June deadline, there could be dire consequences. A report from Moody’s estimated that 6 million jobs could be at risk, raising the unemployment rate to 7% and putting the country in a full recession, as reported by GOBankingRates.

Meanwhile, Congress remains in trouble. Democrats want to push the debt limit to get more borrowing power, while Republicans want spending cuts before they agree to their position.

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One politician has come forward with part of the fix, although not all of Congress can agree with him. Democratic President Joe Manchin wants to change the way Social Security is funded, specifically raising the cap on the payroll tax to make high earners contribute more to the program’s reserves.

As Manchin told CNN during a recent appearance on the network’s “State of the Union” program, he believes that providing additional funds in this way will ensure that beneficiaries continue to receive payments. This new revenue will enable the government to use the excess spending on this core, thus – at least partially – reducing the debt problem.

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Alex Brandon/AP/Shutterstock

Alex Brandon/AP/Shutterstock

Manchin Proposes Raising FICA Income Cap

According to the Social Security Administration, every American worker and their employer contribute 6.2% of their income to the system, up to $160,200 in 2023, while self-employed workers pay more than 12.4% of their income (because no employer pays together). However, if you are a millionaire, you will have met $160,200 by February of each year, according to Hill. When considering the Federal Insurance Contribution Act (FICA), which combines Social Security and Medicare taxes, regular workers pay 7.65% and self-employed people pay 15.3%.

Manchin’s plan appears to match Biden’s promise to ensure the health and longevity of Social Security, which is set to expire by 2035 unless something is done to provide more funding. “Biden’s plan will put the system on a path to long-term solvency by asking Americans with very high incomes to pay the same tax on wages paid by middle-class families,” a statement on the president’s official website announced, describing his statement. A four-part program for older Americans to save Social Security.

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In contrast, as CNBC pointed out, the GOP has proposed raising the retirement age when benefits can be received, streamlining how cost-of-living adjustments are calculated and “changing the rules for supplemental benefits.” CNBC noted that such changes are unlikely to gain Biden’s support.

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This article originally appeared on GOBankingRates.com: Manchin Proposes ‘Easiest’ Social Security Amendment in Response to Debt Ceiling — Will Biden Agree?

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