January 19th, US officially hits debt ceiling, spent all of the $31.4 trillion available for spending allocated by the Treasury Department.The conversation has heated up ever since How the country moves forward to avoid total spending freezes and bankruptcy.
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Unless Congress takes action by the impending June deadline, there could be significant repercussions. As reported by GOBankingRates, Moody’s reports that 6 million jobs could be at stake, with unemployment rising by up to 7% and potentially pushing the country into a full-blown recession. presumed to be.
Now Congress remains in a deadlock. Democrats are in favor of raising the debt ceiling to boost borrowing power, but Republicans want spending cuts before conceding their positions.
Not all Congress agreed with him, but one politician proposed a partial amendment. Democratic Senator Joe Manchin wants to change the way Social Security is funded, specifically raising the payroll tax cap to allow the highest earners to contribute more to the program’s reserves.
As Manchin told CNN during a recent appearance on the network’s “State of the Union” program, giving more money to the program in this way would help ensure that beneficiaries continue to get paid. I think it will be This new revenue will also mitigate government overspending on this key item, thus, at least in part, mitigating the debt ceiling crisis.
Manchin Proposes Raising FICA Income Cap
All American workers and their employers will contribute 6.2% of their salary to the program, up to $160,200 in 2023, while the self-employed will pay 12.4% of their wages, according to the Social Security Administration. (because the employer does not co-pay). However, if you’re a millionaire, you’ll hit the $160,200 cap around February each year, according to The Hill. Taking into account the Federal Contribution Act (FICA), which combines the Social Security payroll tax and the Medicare payroll tax, full-time employees pay 7.65% and the self-employed pay 15.3%.
Manchin’s plan appears to be in line with Biden’s own pledge to ensure health and longevity for Social Security. By requiring them to pay the same taxes as the programs for people.
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In contrast, as CNBC noted, Republicans are proposing to raise the retirement age at which benefits can be received, adjust how the cost of living adjustment is calculated, and “change the rules for supplementary benefits.” . CNBC noted that such a change is unlikely to win Biden’s endorsement.
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This article originally appeared on GOBankingRates.com: Manchin proposes ‘easiest’ Social Security fix in response to debt ceiling — would Biden agree?