As a Capitol Hill battle over the "GOP tax scam" looms, U.S. Senate Budget Committee Chair Sheldon Whitehouse on Wednesday pointed to a new nonpartisan government analysis about soaring wealth inequality as proof of the need for serious reforms.
Whitehouse (D-R.I.) sought the Congressional Budget Office (CBO) report, which details trends in the distribution of family wealth—including projected Social Security retirement and disability benefits—in the United States from 1989 to 2022.
"Adjusted for inflation, the wealth held by families in the United States almost quadrupled between 1989 and 2022, rising from $52 trillion (in 2022 dollars) to $199 trillion, at an average rate of about 4% per year," the CBO found. "Over that 33-year period, family wealth was unevenly distributed, and that inequality increased."
"In 2022, families in the top 10% of the distribution held 60% of all wealth, up from 56% in 1989, and families in the top 1% of the distribution held 27%, up from 23% in 1989," the office said. "The share of wealth held by the rest of the families in the top half of the distribution shrank from 37% to 33% over the same period. Families in the bottom half of the distribution held 6% of all wealth in both 1989 and 2022."
"By making the wealthy pay their fair share, we can protect Social Security forever and unrig our tax code."
The report comes as Congress prepares for a tax debate due to next year's expiration of policies signed into law in 2017 by then-President Donald Trump, the Republican facing Democratic Vice President Kamala Harris in this November's election.
Throughout the current election cycle, Trump and congressional Republicans have campaigned on extending policies from the Tax Cuts and Jobs Act, which slashed the corporate tax rate from 35% to 21% and also benefited wealthy individuals.
"This report should add urgency in Congress as the Trump tax scam expires next year and we negotiate future tax legislation," Whitehouse said of the CBO analysis. "Do we want to reward billionaires, who have already captured so much of the nation's wealth, or do we want to de-corrupt the tax code, ensure the wealthy and big corporations pay their fair share, and reduce the deficit, all while making necessary investments to better the lives of all Americans?"
Whitehouse noted that the report also comes amid concerns about the future of Social Security. Citing the CBO analysis, his office detailed:
- Social Security is essential to the retirement security of low middle- and lower-income families: Without this earned benefits program, the bottom half of families would hold just 3% of overall wealth, while the top 10% of families would control nearly 70%.
- If Social Security were allowed to go insolvent, families in the bottom half of the wealth distribution would lose 10% of their wealth, while the wealth of the top 1% of families would be essentially unchanged.
"Social Security is a bedrock of our retirement system and ensures millions of seniors can retire with dignity," Whitehouse said. "Seniors earned their benefits throughout their working lives, but the program is now facing a looming cash flow problem. By making the wealthy pay their fair share, we can protect Social Security forever and unrig our tax code—exactly what my Medicare and Social Security Fair Share Act would do."
Whitehouse's bill is spearheaded in the lower chamber by U.S. House Budget Committee Ranking Member Brendan Boyle (D-Pa.), who also recently requested a CBO report. That one focuses on the impact of raising the full retirement age for Social Security from 67 to 69, as various Republican groups have proposed.
The CBO's Social Security analysis, released last week, found that for workers now in their 30s and 40s, the average annual benefit cut would be around $3,500 a year—and the GOP's proposed changes wouldn't even extend the program's solvency.
"This independent, nonpartisan report shows just how devastating Republican plans to rip away hard-earned Social Security benefits would be for American workers," Boyle said last week. "Instead of saving Social Security by making the ultrarich pay their fair share, the GOP is hell-bent on gutting benefits for the middle class."
