Sen. Elizabeth Warren, seeking to sustain her momentum in the Democratic presidential race, is proposing an across-the-board increase in Social Security benefits, financed by new taxes on high-income Americans.
Rolling out the plan Thursday morning, hours before the third presidential debate, Warren called for an immediate benefit increase of $200 per month for current and future beneficiaries. At the same time, the Massachusetts Democrat proposed new rules that would provide additional benefit increases for low-income, female, disabled, minority, and former government worker beneficiaries, reasoning that they've been shortchanged by the existing structure of the program.
To pay for it, Warren would impose new taxes on what she calls the richest 2% of Americans. She would eliminate the income cap on Social Security taxes for those earning more than $250,000 a year, imposing a 14.8% levy on incomes above that amount, split evenly between employers and employees.
In addition, she is calling for another 14.8% levy on investment income for individuals earning more than $250,000 and couples earning more than $400,000. Taken together, according to an analysis Warren released from Moody's economist Mark Zandi, those taxes would not only pay for the new benefits but provide enough additional revenue to extend Social Security's solvency by 19 years beyond current projections.
"When Washington politicians discuss the program, it's mostly to debate about whether to cut benefits by a lot or a little bit," Warren wrote in a Medium post outlining her proposal. "We need to get out priorities straight. We should be increasing Social Security benefits and asking the richest Americans to pay their fair share for the program."
Warren has made an aggressive economic populism the signature of her White House bid. She has proposed a new wealth tax on assets above $50 million, and a new minimum tax on the profits of the largest corporations, to help finance new government benefits for child care, health care, housing and education.
Substantively, her proposals would only stand a chance if she wins the presidency and her party captures majorities in the House and Senate. Even under those circumstances, recent history suggests that lawmakers would balk at tax and spending increases of the size she has called for.
Politically, however, her proposals have given her a clearly defined message that places pressure on 2020 rivals. After months of steady progress, Warren now jockeys with Sen. Bernie Sanders of Vermont, the self-styled Democratic socialist, for second place in the race behind the moderate front-runner, former Vice President Joe Biden.