Tampa, FL (Law Firm Newswire) February 7, 2013 – Many people are wondering if there will be new changes to Social Security.
While the ongoing debate about the U.S. debt ceiling has many people concerned about government spending, the economy, and tax rates, some analysts are watching to see if the lawmakers skip making new changes to the Social Security program.
The Social Security system provides for the disabled and the elderly with much-needed funds; some 14 million elderly individuals live just above the poverty level.
If changes are made to Social Security, says analysts, it will likely be made within the Consumer Price Index (CPI), putting it in place of the currently used annual cost-of-living adjustments, or COLAs. The CPI would reduce approximately 20 percent of the shortfall left by Social Security, by providing a lower annual cost-of-living adjustment, it cuts benefits. The CPI would allow inflation to grow at lower average percentage points per year than it does using the current inflation measure.
Will lawmakers push for the chained CPI? “It remains to be seen what they will decide,” said social security lawyer David Magann. “What they decide in Washington will have significant consequences for Social Security beneficiaries around the country.”
Defense programs are scheduled to be cut, as are education budgets and other domestic programs. But Social Security’s future shortfall has yet to be adequately addressed. Other options for reform include increasing the amount of wages which are subject to Social Security taxes, and upping the Social Security benefits retirement age. Income up to $110,100 was subject to payroll taxes.
Meanwhile, President Obama and Congress have yet to agree on whether to raise the U.S. government’s borrowing limit. The President has warned that the lack of movement might delay the payment of benefits to Social Security recipients and military veterans.
The U.S. government has reached its $16.4 trillion limit on borrowing, and is slated to run out of ways in which to meet all financial obligations and payouts by March 1, if not before.