Social Security is one of the most popular and important programs in United States history, so it's not a surprise politicians have had a lot to say about it. Rep. Alexandria Ocasio-Cortez (D-N.Y.) is one of them. Recently, she expressed her belief that it's important to make some key changes to Social Security in order to ensure it's fulfilling the promise it represents.
Ocasio-Cortez, or AOC as she's commonly known, is a leading progressive voice who has played an instrumental role in helping to shape the policies put forth by the Democratic majority in Congress. Her words are worth listening to, as many believe the progressive wing is ascendant and will play an even bigger role in guiding future legislation.
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Here's what AOC had to say about Social Security
Ocasio-Cortez spoke about Social Security in October 2021 when Democrats introduced the Social Security 2100 Act. The act would make some major changes to the entitlement program, including increasing benefits, providing for larger raises, offering easier access to disability benefits, and raising taxes on the wealthiest Americans to shore up the program's finances.
AOC made it clear she supported the act, including changing the way it is funded by asking more of the highest earners. "What we want to do is make Social Security better, to expand it, to cover people like my mom, who left her job to care for my dad while he was ill." she said. "And we want to do that by asking the wealthy to pay into Social Security the same way that I did when I was a waitress. It's pretty simple."
The financing change that she's referring to would be a fundamental shift in the current rules. It's a modification many on the left support.
This is how AOC would change Social Security
Under the existing financing structure, workers with income up to an annual "wage base limit" pay Social Security taxes on all of the money they earn. The wage base limit is $147,000 in 2022. But people who earn above this amount don't pay Social Security taxes on any additional income. As a result, they're taxed only on part of their annual wages, unlike lower earners.
Now, those high earners also don't get credit for wages above the $147,000 limit when their benefits are calculated. Benefits are based on average wages during each retiree's 35 highest earning years. However, any income above the annual wage base limit isn't included in the calculation. As a result, wealthy Americans get benefits that replace a smaller percentage of pre-retirement income than lower earners. The program was designed this way to ensure wealthy people didn't get monthly checks totaling tens of thousands of dollars.
AOC, and other Democrats, want to change the rules for taxation, but do not want to provide an increase in benefits. Under President Joe Biden's plan, wages up to the wage base limit would be taxed in full -- as they are under the current system. Income between the wage base limit and $400,000 would remain untaxed, but Social Security taxes would be assessed on earnings above that $400,000 threshold. There would, however, be no resulting benefits increase for those subject to extra taxes.
This proposal has a lot of support, and AOC is one of many Democrats who has put her weight behind it. While it's unlikely legislation making such a change will pass under the current Congress, which has a very narrow Democratic majority, a future Congress with more progressive democrats could very well make this major change. If it does, it will be because prominent young voices like AOC have led the charge.
