Lawmakers in Washington have been struggling for weeks to find a consensus on how to provide Americans with more coronavirus relief money. Although there's bipartisan agreement that a second direct payment is needed, there's very little common ground on key components of the next relief bill. Items including the total cost of the legislation, how much help the unemployed should receive, and whether states should get substantial funding to cope with coronavirus costs are all still up in the air.
Democrats have introduced and passed the HEROES Act along party lines in the House of Representatives. Majority leader Mitch McConnell has introduced the HEALS Act in the Republican-controlled Senate. But neither one of these two bills is likely to be signed into law. There are also some other pieces of proposed legislation that could be worth a look, including the Social Security COVID-19 Correction and Equity Act.
Unlike the HEROES and HEALS Acts, which aim to tackle a vast array of financial problems the American public is facing due to COVID-19, this bill is focused on offering relief to retirees during these troubled times. While there are some provisions that may be difficult to pass, parts of the bill could end up finding their way into whatever coronavirus relief package lawmakers end up agreeing upon (assuming a compromise is reached).
A bill to help older Americans weather the 2020 recession
The Social Security COVID-19 Correction and Equity Act was introduced by Rep. John B. Larson, a Connecticut Democrat who is the House Ways and Means Subcommittee chairman. It would:
- Increase Social Security benefits by 2% across the board for retirees and the disabled.
- Raise the special minimum benefit, which used to provide an alternative method of calculating benefits for lower-income Americans but has become outdated.
- Prevent workers born in 1960 from receiving lower lifetime benefits due to a quirk in the Social Security formula that penalizes people who turn 60 in years when national average wages fall.
- Reduce taxes on Social Security benefits for lower- and middle-income beneficiaries. Many of these recipients are now subject to tax on at least some of their benefits, as the thresholds at which retirement checks become taxable isn't indexed to inflation.
Each of these provisions are aimed at helping shore up the finances of older Americans. This is a welcome change from other stimulus proposals that would leave out Social Security retirees. And it could provide much-needed relief for the older population especially at risk of COVID-19 who may see their buying power fall due to the virus.
Does this bill stand a chance of passing?
With lawmakers so divided on how to provide relief to Americans, it's unclear if Congress can pass any stimulus bill, even though party leaders on the right have gotten behind the HEALS Act and the HEROES Act has already passed one chamber of Congress. And there are some provisions of the Social Security COVID-19 Correction and Equity Act that would be a tough sell, including an expensive across-the-board benefit increase.
Still, some aspects of the bill could make it into whatever compromise legislation lawmakers may eventually agree on -- especially the fix for those turning 60 this year who will lose out on thousands of dollars in benefits just because of the year they were born.
Because of the conflict in D.C., however, seniors (and other Americans) need to plan for a reality in which there's no additional aid coming from the nation's capital. For Social Security retirees who are likely looking at either no raise next year or a very small one, it may be time to start belt-tightening to build up a stronger emergency fund since benefits may not go as far in the future.