Joe Biden has made a number of policy proposals since becoming president. He's also passed some major legislation, including the American Rescue Plan Act, which provided stimulus checks and other relief for Americans struggling during the COVID-19 pandemic.
One issue he hasn't addressed, though, is Social Security. And it's an issue that he discussed a lot during his campaign.
In fact, there's one crucial quote that embodies the president's plans when it comes to this important entitlement program. At the Democratic National Convention in 2020, Biden said "For our seniors, Social Security is a sacred obligation, a sacred promise made they paid for."
Here's why this quote is such an important one.
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Social Security is facing an impending funding crisis without action
Social Security is considered an earned benefit because workers pay money into it throughout their entire careers. Then, upon reaching retirement age, seniors are supposed to get benefits equaling a specific percentage of the average wages they earned in the 35 years when their income was highest.
The only problem is that future seniors may not receive all their promised benefits. That's because Social Security's trust fund is slated to run dry by 2035. When it does, seniors will absolutely still get some of their money. Current payroll tax collections will provide enough funding to pay out around 76% of promised benefits. But cuts will have to occur unless changes are made.
Unfortunately, the longer that lawmakers wait to make these modifications, the more challenging it becomes. That's because the financial shortfalls will only worsen, and there will be less time to bring in more revenue to shore up the trust fund. The most recent trustees report indicated that an immediate payroll tax increase from the current 12.4% up to 15.54% could fix the problem. But if payroll taxes increase only after the trust fund runs short, taxes would need to go up to 16.53%.
President Biden has outlined numerous plans to change Social Security, including some suggestions for making the program solvent over the long-term. Rather than a broad increase in Social Security taxes for all workers, the president has instead proposed imposing payroll tax on income above $400,000. Currently, taxes are only collected on wages up to $142,800, which is this year's "wage base limit." Biden would make higher earners pay these taxes on more of their income to bring in extra revenue.
Although this was proposed on the campaign trail, Biden hasn't yet made a strong push for this change, or for any other changes to Social Security since taking office. It's likely he will attempt to at some point during his term in office. After all, in his speech at the DNC, Biden not only indicated that Social Security was a sacred promise, but also gave his word he'd fight for the its future. "If I'm your president, we're going to protect Social Security and Medicare. You have my word," the president said.
Of course, changes to Social Security are difficult, as Congress is closely divided and the president can't act alone. It's unclear whether the tax increase proposal -- or any other changes to Social Security -- could make it to Biden's desk. What Biden's quote made clear, though, is that he wants to protect the program. And time is running short for lawmakers in D.C. to find a way to do that.
