Today, February 16, marks the day when someone making $1 million stops paying into Social Security for the rest of the year. This is because Social Security currently has a cap on taxable earnings – $128,400 this year – which millionaires and billionaires have already made by today.
Although there is a cap on contributions to Social Security by the ultra-wealthy, today is a good reminder that Social Security is a program that we all contribute to, and that millions of people rely on every single day to make ends meet. Women in particular are especially dependent on Social Security when they retire. For more than half of women (55 percent) who are 65 and older and who receive benefits, Social Security makes up 50 percent or more of their income. And for more than one in four women over 65, Social Security is virtually their only source of income (90 percent or more).
But Social Security’s monthly retirement benefits are incredibly modest – women in retirement can expect to receive an average of $1,200 per month – which is less than what men receive – largely due to women’s lower earnings over a lifetime and the fact that they spend more time caring for family members and often take time out of the workforce to care for young children or sick family members. However, there are reasonable steps that can be taken – like lifting the cap on taxable earnings so that the wealthy pay their fair share – something a majority of Americans support – to ensure that we can fulfill the promise of Social Security and strengthen the program for generations to come.
Unfortunately, everything we have been seeing from the Administration and congressional leadership is trending in the exact opposite direction of strengthening Social Security. One example: the recent GOP tax plan, as we’ve noted, would be a raw deal for women and would only serve to make the rich in our country even richer by giving the vast majority of the tax cuts to the top 1 percent. A major side effect of that plan may be to threaten the long-term financial security of Social Security by preventing more and more money from being taxed by Social Security or otherwise. What’s more, this massive drain on revenues has given conservative policymakers fodder to argue for cuts to programs like Social Security and Medicare. And now, to add insult to injury, conservatives are trying to gain support for a plan to force families to choose between critical paid family leave and retiring on time. The plan would operate out of the Social Security system and would offer workers paid leave benefits now in exchange for a later retirement date – a dangerous choice that forces families to choose between something they need right now and something they need down the road. This choice is particularly fraught for women, who are more likely to be caregivers, and more likely to rely on Social Security in retirement (see above).
We can’t let ourselves be forced into a series of false choices. We can roll back tax cuts that overwhelmingly benefit millionaires and billionaires so that we don’t have to cut programs and services that keep women and their families from falling into poverty. We can develop a paid leave system, something only about 1 in 7 workers has access to currently, without undermining retirement security. And we can make modest changes to strengthen Social Security so that future generations of women can rely on it.