For years, policymakers targeted Social Security as needing to have its benefits reduced. Only recently have politicians stood up and said that Social Security needed to be expanded, and although Sen. Elizabeth Warren and others not running for the White House have largely led the charge, several Presidential candidates have come out in favor of giving more Social Security benefits to Americans. Let's take a look at the two Democrats and two Republicans who have come out in favor of benefit increases to Social Security.
Sanders vs. Clinton
Both of the remaining Democratic candidates support changes to Social Security that would increase benefits. However, the two take somewhat different approaches to reforming the program.
Hillary Clinton has said that she would support expanding Social Security in a couple of key ways. First, she would boost survivor benefits claimed on a deceased spouse's work history, citing the fact that the poverty rate for widows over 65 is 90% higher than for other senior citizens because of the cut in benefits that results from a spouse's death. In addition, she proposed making more benefits available for those who take time out of a traditional job to take care of children or sick family members at home.
Clinton would pay for increases in two ways. She would boost the wage base maximum on which the government imposes Social Security payroll taxes. Also, she would tax investment income and other income not currently subject to Social Security taxes.
Bernie Sanders' plan includes broader-based expansion of Social Security benefits. He would boost benefits by an average of $65 per month overall. In addition, Sanders would support methods that would increase the cost-of-living adjustments that Social Security recipients make, and he would introduce a new calculation to raise the minimum amount of benefits that low-income seniors receive under the program.
Sanders would pay for Social Security expansion by lifting the wage base. He has linked the issue to income inequality, saying that anyone making more than $250,000 annually would pay the same Social Security payroll tax rate that middle-class Americans pay.
Republicans want to boost Social Security, too
Many high-profile Republicans have called for measures to control Social Security costs. Nearly all of the remaining candidates have supported raising the retirement age, although Donald Trump said in 2013 that cutting Social Security in any substantial way would cost Republicans elections.
Marco Rubio favors keeping Social Security unchanged for those in or near retirement, but he would advocate strengthening the program for low-income seniors. In addition, Rubio would eliminate the provision that forces seniors to forfeit their benefits if they earn more than a threshold amount from working before reaching full retirement age.
Jeb Bush has also proposed a couple of increases that would offset reductions in other areas. He supports bipartisan proposals from the Simpson-Bowles Commission that would provide a minimum benefit of 125% of the federal poverty level to anyone who has worked for 30 years or more. In addition, Bush would also eliminate the earnings test that takes away benefits for those who haven't reached full retirement age and continue working.
Both Bush and Rubio would also support Americans deferring retirement by eliminating the payroll tax on seniors. The move wouldn't directly affect Social Security benefits, but it would increase take-home pay by about 8% for those who choose to work in their golden years.
It's important to put the Republicans' proposals in context. Even with these boosts, the net amount of benefits for Social Security participants in the future could fall overall because of other provisions that would cut payouts.
Keep this in mind
Regardless of who wins the election, getting Social Security reform passed will be a monumental task. The next President will need the help of Congress to make any suggested reform measures a reality, and that could make any changes extremely difficult to accomplish.
Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.