New legislation, the Social Security and Medicare Lock-Box Act, would create a "lock box" for any payroll tax surplus in the programs' trust funds and prevent the money from being invested in U.S. bonds, such as Treasurys. A commission would be established to determine how to invest the surplus.
Advocacy groups for older adults do not support the bill, H.R. 853.
"While the legislation does not specify what other types [of investments], it would establish a new Social Security and Medicare Part A Investment Commission to make recommendations," Mary Johnson, Social Security and Medicare policy analyst for The Senior Citizens League, told ThinkAdvisor Wednesday in an email. "In other words, it directs investment of payroll taxes into what would ultimately be more risky investments than we have today, and even private equities."
The bill, introduced by Rep. Tim Walberg, R-Mich., has been floated previously. In February 2021, Walberg introduced H.R. 1269, which he said "would protect future surpluses by creating a lockbox that prevents these funds from being spent on other federal programs."
The bill, Johnson relayed, "would completely change the current system and could put the retirement and Medicare benefits of tens of millions of retirees in doubt — especially in years like we have just experienced in 2022 when many retirement accounts lost roughly a quarter of their value."
Nancy Altman, president of Social Security Works, added in another email that Walberg's bill is a "messaging bill, but the message makes no sense."
