The COVID-19 pandemic, as well as Donald Trump’s presidency, have had a big impact on Social Security’s finances. This is quickly becoming one of the major issues of the 2020 elections.
In 2020, 65 million Americans will receive $1 trillion in retirement, disability and survivor benefits. Those funds are quickly depleting due to the pandemic, and in April the SSA said the funds may run out as soon as 2035.
Democratic candidate, former Vice President Joe Biden has a plan to expand Social Security with larger benefit checks for recipients, while funding the agency with taxes from higher income earners.
Currently, employees and employers each pay 6.2% from wages. But that is currently capped at wages of $137,700. Biden’s plan calls for applying those taxes to earnings over $400,000.
Biden’s plan calls for increasing payments for individuals who have been receiving retirement benefits for at least 20 years, a 5 percent increase to retirement benefits.
The plan would also set a minimum benefit so that all workers who put in 30 years of work would be guaranteed a benefit equal to at least 125% of the federal poverty level. That would bring it to $1,301 from $886 a month as of 2019.
In a complete 180 from Biden’s proposal, Donald Trump has implemented a temporary payroll tax deferral, which will allow employers and employees to delay paying Social Security payroll taxes through the end of the year.
Under an executive order passed earlier this year, those taxes will have to eventually be paid back. Trump has said that he plans to forgive those catch-up tax payments from the deferral period if he is re-elected.
The country is already facing a $53 tillion gap in Social Security, according to reports released earlier this year. That number does not include effects from the COVID-19 pandemic.