3 minPolitics
Democratic midterm win could bring a Social Security benefit boost in 2027
With Democrats in control of Congress, Bernie Sanders is expected to chair the Social Security subcommittee and push for higher benefits, though the proposal faces steep hurdles in the Senate.
Democrats' midterm victories have put Bernie Sanders in line to chair the Social Security subcommittee, reviving proposals that could raise benefit payments for tens of millions of retirees and other recipients beginning in 2027. Sanders has proposed expanding benefits by at least $2,400 a year, a plan that would reach far beyond the monthly cost-of-living increases beneficiaries already receive.
The push comes as the Social Security trust fund is projected to become insolvent around the fourth quarter of 2032. If Congress does not act before then, benefits would be cut automatically, a prospect that has made the program a central issue in the next legislative session. About 71 million Americans currently receive monthly Social Security benefits, so any change to the formula would affect a large share of the population.
Sanders's earlier Social Security Expansion Act proposed an additional $200 per month for beneficiaries, a measure supporters have called the «Bernie Bump». The current plan goes further by removing the earnings cap, the limit above which income is not subject to the Social Security payroll tax. Under the proposal, capital gains and dividends would also be taxed to help fund the expansion, broadening the base of income that contributes to the program.
The earnings cap is set at $192,300 for 2027, meaning wages above that level are not taxed for Social Security purposes. Removing the cap entirely would substantially increase revenue, but financial planner Robert Laura said he considers full elimination unlikely. He has suggested that a phased increase in the cap, rising toward $500,000 over three to five years, would be a more realistic path that could still close part of the funding gap without an abrupt change for high earners.
Any expansion faces significant obstacles. Democrats do not hold the 60 Senate votes needed to overcome a filibuster, and the president's signature would still be required for any bill to become law. Legislation that changes the tax structure and benefit formula would therefore need bipartisan support or a sharply different political landscape than the one currently in place in the Senate.
The 2027 cost-of-living adjustment has already been set at 3.6 percent, which will raise benefits regardless of whether a larger expansion passes. That automatic increase is tied to inflation and is separate from the legislative proposals now under discussion, meaning recipients will see higher payments even if Congress does nothing further.
For now, the proposals remain at the stage of party priorities rather than enacted policy. Whether the new majority can turn them into law will depend on the Senate arithmetic, the willingness of the White House to sign them, and the political pressure created by the 2032 insolvency deadline, which is drawing closer with each session of Congress.
Source: fastcompany.com
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