Tie Social Security benefits to CEO pay, says Elizabeth Warren

Elizabeth Warren in 85 seconds
Elizabeth Warren in 85 seconds

Elizabeth Warren wants people who rely on Social Security to do as well as CEOs.

Since there won't be any cost-of-living increase for Social Security next year, Warren has introduced a bill to implement a one-time 3.9% hike, which she said was the average annual CEO pay raise in 2014.

She proposes paying for the increase by no longer allowing companies to deduct executive bonuses of more than $1 million as a business expense.

Related: No raise for 65 million on Social Security

"If we do nothing, on January 1st, more than 70 million seniors, veterans, and other Americans won't get an extra dime in much-needed Social Security and other benefits. And while Congress sits on its hands and pretends that there's nothing we can do, taxpayers will keep right on subsidizing billions of dollars worth of bonuses for highly paid CEOs," Warren said.

The increase would mean about $600 more a year for the average retiree on Social Security. CEO pay at the nation's largest companies rose $600,000 to $16.3 million in 2014, according to analysis by the Economic Policy Institute, a liberal think tank that Warren cites in her proposal.

Related: Is your pension safe? Here are the next funds to fail

Social Security benefits are adjusted annually based upon the price paid for goods and services purchased by a typical worker. This year the drop in gasoline prices caused that inflation measure to decline by 0.6%. But since retired people don't drive as much as those with jobs, they're not benefiting as much from low gas prices. At the same time, the cost of things like health care, which seniors tend to rely on, has climbed higher.

The legislation is co-sponsored by 17 other Democratic senators as well as Bernie Sanders, who is an independent but is running for president as a Democrat. But it has essentially no chance of passing, since it's unlikely to have any Republican support.

Personal Finance


CNNMoney Sponsors