Warren Bill Would Give Seniors a Raise; the SAVE Benefits Act Takes a Stand Against Inequality
by Jessica Schieder, 11/9/2015
Roughly two-thirds of seniors rely on Social Security for more than half of their income. In stark contrast, a new report we co-published last week with the Institute for Policy Studies found that the 100 largest CEO retirement accounts contain $4.9 billion—more than 41 percent of Americans families have saved for retirement, combined.
Last month Social Security officials announced that for only the third time since 1975, there will be no cost-of-living increase in retiree benefits. With the cost of housing, utilities and drug costs soaring, stagnant benefits could have a significant impact on seniors’ financial stability.
Senator Elizabeth Warren (D-MA) introduced a bill to provide emergency relief to 70 million seniors, who depend on Social Security benefits. The Seniors and Veterans Emergency (SAVE) Benefits Act proposes a one-time payment of 3.9 percent—or roughly $580 for the average Social Security beneficiary, some veterans’ program beneficiaries, and select state, federal, and local retirees. For someone barely scraping by on a $1,250 Social Security check each month, $581 would cover almost three months of groceries, or a year’s worth of out-of-pocket costs for a Medicare beneficiary’s prescription drugs. According to some advocates, this small increase could lift more than 1 million Americans out of poverty.
Closing Corporate Pay Loophole to Give Seniors a Raise
To pay for this one-time infusion, the bill proposes closing a corporate loophole, which allows corporation to deduct from their taxes unlimited amounts of corporate executive compensation so long as that pay is “performance based.” Not only does this loophole reward corporations for offering CEO’s extravagant pay packages, advocates have suggested the loophole is one of many that contributes to growing income inequality in the United States.
In addition to paying for a one-time payment to retirees, closing this loophole will produce enough extra new funds to extend the life of the Social Security and Disability trust funds.
The bill would provide immediate relief to retirees who need it most, while correcting a discrepancy in the tax code that unnecessarily rewards CEOs. While the bill is only a small step towards fighting income inequality and inequalities, the bill is certainly an admirable step in the right direction.