Millions to Gain from Expanded Social Security Benefits: Who and How?

The proposed expansion of Social Security benefits has the potential to significantly improve the financial security of millions of Americans. According to the Center on Budget and Policy Priorities, increasing benefits by $200 per month for all current and future beneficiaries would lift 1.7 million people out of poverty, including 1.1 million children. This expansion would also reduce the poverty rate for seniors by 27%, as many elderly Americans rely heavily on Social Security for income.



The expansion of Social Security benefits could disproportionately benefit low- and middle-income households, stimulating consumer spending and economic growth. According to the Center for American Progress, a 20% increase in benefits would boost consumer spending by $130 billion annually, as recipients tend to have a higher marginal propensity to consume (MPC) due to their lower income levels. This increased spending would stimulate economic growth, with the Center for American Progress estimating a 0.5% increase in GDP.

However, the long-term fiscal sustainability of such an expansion must be carefully considered. According to the Congressional Research Service, increasing benefits by 20% would cost an additional $1.3 trillion over 10 years, raising the program's total cost to $31.5 trillion. This would increase the federal budget deficit and potentially lead to higher national debt. To finance these additional benefits, the government could raise payroll taxes, reduce other spending, or issue more debt. However, these options have their own fiscal implications, such as increased tax burden on workers or reduced public investment.

In conclusion, the proposed expansion of Social Security benefits could significantly improve the financial security of millions of Americans, particularly low-income and middle-class individuals. However, policymakers must carefully consider the trade-offs and potential long-term fiscal sustainability of expanding Social Security benefits. By targeting benefit increases for those most in need and implementing responsible fiscal policies, the government can ensure that the expansion of Social Security benefits is both equitable and sustainable.