Chairman Johnson Announces Hearing on Social Security’s FinancesChairman Johnson Announces Hearing on Social Security’s Finances
U.S. Congressman Sam Johnson (R-TX), Chairman of the House Committee on Ways and Means Subcommittee on Social Security announced today that the Subcommittee will hold a hearing on Social Security’s current revenue streams, proposed changes to those structures and the impact they would have on the program, beneficiaries, workers and the economy. The hearing will take place on Thursday, June 23, 2011 in B-318 Rayburn House Office Building, beginning at 1:30 p.m.
In view of the limited time available to hear witnesses, oral testimony at this hearing will be from invited witnesses only. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing. A list of invited witnesses will follow. BACKGROUND: The 2011 Annual Report of the Social Security Board of Trustees again highlighted the financing challenges facing the Old Age and Survivors Insurance (OASI) and the Disability Insurance (DI) programs. The trustees project permanent and growing cash flow deficits, and by 2036 the combined OASI and DI Trust Funds are projected to become exhausted and unable to pay scheduled benefits. The DI Trust Fund is projected to become exhausted in 2018. The Public Trustees expressed the need for action soon in order to be able to protect vulnerable populations and those at or near retirement age. Social Security benefits are financed primarily by payroll taxes on covered wages. The Federal Insurance Contributions Act (“FICA”) imposes a tax on covered wages up to the taxable wage base of $106,800 in 2011, divided between employers (6.2%) and employees (6.2%). Self-employed taxpayers are subject to payroll tax under the Self-Employed Contributions Act (“SECA”) on the same wage base with a rate equal to 12.4 percent (the total combined employer-employee rate). The wage base is adjusted annually based on average wage growth, if a Social Security cost-of-living adjustment is payable. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced the OASDI payroll tax paid by the worker by 2 percentage points in calendar year 2011. The law also required the Secretary of the Treasury to make general revenue transfers to replace revenues temporarily diverted from the trust funds. According to the Social Security Administration, about 94 percent of workers in paid employment and self-employment are covered under the OASDI program. The majority of non-covered workers are in State, local, or the Federal government. In addition to Social Security payroll taxes, certain Social Security beneficiaries must include a portion of Social Security benefits in taxable income for the Federal income tax, and the Social Security program receives part of those taxes. According to the 2011 Annual Report of the Social Security Trustees, in calendar year 2010, Social Security non-interest income was $637.3 billion from payroll taxes and $22.7 billion from the taxation of benefits. Social Security tax income as a percent of taxable payroll will grow from 12.52 in 2011 to 13.31 in 2086, due to growth in income from the taxation of benefits. The Social Security actuaries have estimated a number of revenue generating proposals, including those proposed by the President’s Fiscal Commission which would require all newly hired state and local workers to participate in Social Security and increase the amount of earnings subject to Social Security payroll taxes by increasing the taxable wage base. In announcing the hearing, Chairman Sam Johnson (R-TX) stated, “When Social Security first began, the payroll tax was only 2 percent – evenly split between employers and employees -- on the first $3,000 in wages. Today the payroll tax is 12.4% on the first $106,800 in wages. Yet despite the tax increases, Social Security is in trouble. Clearly tax hikes have not been a panacea. This hearing will provide an opportunity to learn more about Social Security revenues, options for change and their impacts.” FOCUS OF THE HEARING: The hearing will focus on the sources of Social Security’s revenues, how those sources have changed over time, options for change and their impacts. DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms. From the Committee homepage, https://waysandmeans.house.gov, select “Hearings.” Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.” Once you have followed the online instructions, submit all requested information. ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by the close of business on Thursday, July 14, 2011. Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings. For questions, or if you encounter technical problems, please call (202) 225-1721 or (202) 225-3625. FORMATTING REQUIREMENTS: The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
Note: All Committee advisories and news releases are available on the World Wide Web at http://www.waysandmeans.house.gov/. |