Yahoo Movies How Biden Is Impacting Social Security in 2023
Social Security is one of the programs that helped shepherd the most vulnerable Americans through the pandemic. When prices started rising in 2021, the country was reminded once again of just how deeply tens of millions of people depend on the monthly benefits that Social Security provides.
President Biden campaigned on reforming Social Security to be fairer and more efficient. Many of his proposals have not come to fruition, but despite several big setbacks, Biden has already left his fingerprints on the crown jewel in America’s social safety net during his first two years in office.
Here’s what the front half of President Biden’s first term has meant for Social Security.
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Biden Oversaw the Biggest COLA in 40 Years
The most significant economic storyline during Biden’s time in office so far has been rising prices and the highest rate of inflation in 40 years. With the cost of everything going up and up despite numerous interest rate hikes by the Federal Reserve, the government responded in Mid-October with the largest cost-of-living adjustment (COLA) in over four decades.
The Social Security Administration (SSA) announced that 2023 would bring an 8.7% increase in benefits, the biggest COLA since 1981. Retirees now collect on average $140 more per month than they did in 2022, bringing the average check up to $1,827.
The 8.7% increase applies not only to retired workers, but to eligible spouses, eligible disabled recipients, and SSI recipients.
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Biden Made it Easier to Claim Benefits
In December of 2021, President Biden signed an executive order that cut a whole lot of bureaucratic red tape — and not just for Social Security recipients. The order targeted 36 federal services administered by several different departments and agencies that deal with government benefits, including things like disaster aid, student loan relief, and, of course, Social Security.
The order was designed to reduce the so-called “time tax,” which Social Security recipients and other people “pay” while crawling their way through a sluggish and frustrating bureaucratic process to get the benefits that they’re entitled to receive. Because of the nature of government benefits, many of those people are poor, elderly, displaced, or otherwise vulnerable. Among other things, the order included the creation of a new online tool to make it easier to apply for Social Security and to receive benefits promptly.
You Can Now Earn More Money While Collecting Benefits
Another big change affects the many people who collect Social Security benefits before full retirement age while still earning some income. In 2022, the SSA allowed recipients to earn up to $19,560 before it started temporarily withholding $1 in benefits for every $2 they earned in income. In 2023, that threshold jumped to $21,240.
Those who reach full retirement age in 2023 can earn up to $56,520 before the SSA withholds $1 for every $3 earned, up from $51,960 in 2022. The so-called income test never applies after a recipient reaches full retirement age.
Biden’s Administration Has More Actions in Store
Recipients see the results of cost-of-living adjustments as soon as they get a bigger check from the SSA — but some of the impacts that the Biden administration intends to have on Social Security are yet to come.
In March, the administration released its budget for fiscal year 2024. In the introduction, the administration called for “protecting and strengthening” and reiterated Biden’s affirmation that he would reject any cuts to Social Security. The introduction also confirmed that Biden intends to work with Congress to further strengthen the program. The budget also includes a 10% increase in funding for the SSA intended to improve customer service.
Some Say Biden Is Not Doing Enough to Protect Social Security
Despite a great deal of strong rhetoric in support of Social Security, critics have noted that Biden still has not taken direct action to resolve the program’s dwindling trust fund reserves. In 2021 the cost of providing Social Security benefits began to exceed the program’s net income, requiring the SSA to dip into its reserves to ensure benefit payments were made.
If nothing is done to address this shortfall, the SSA could be forced to cut benefits – there simply won’t be enough money. And according to recent projections, these cuts could start taking place as early as 2034.
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James Holbach contributed to the reporting of this article.
This article originally appeared on GOBankingRates.com: How Biden Is Impacting Social Security in 2023
