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| Actuarial Publications |
Summary of Provisions That Would Change the Social Security Program |
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Description of Proposed Provisions:
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Estimates based on the intermediate assumptions of the 2010 Trustees Report
| Change from present law | Results with this provision | |||||
|---|---|---|---|---|---|---|
| Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
|||
| Present Law, Alternative II. |
-1.92 | -4.12 | ||||
| E1.1 |
Raise payroll tax rates (for employees and employers combined) by 2.1
percentage points in 2011 and later.
graph | table | pdf-graph | pdf-table | memo |
2.00 | 2.09 | 0.08 | -2.03 | |
| E1.2 |
Raise payroll tax rates (for employees and employers combined) by 1.9
percentage points in 2023-52 (to 14.3% combined) and by an additional
1.9 percentage points in 2053 (to 16.2% combined).
graph | table | pdf-graph | pdf-table | memo |
1.99 | 3.72 | 0.07 | -0.40 | |
| E1.3 |
Beginning in 2011, reduce the combined OASDI payroll tax rate from 12.4
percent to 11.4 percent.
graph | table | pdf-graph | pdf-table | memo |
-0.96 | -1.01 | -2.88 | -5.12 | |
| E1.4 |
Raise the payroll tax rates gradually (for employees and employers combined)
by 0.1 percentage points in 2016; continue this increase each year for 20
years. By 2035, the combined employee and employer payroll tax rate would be
14.4 percent.
graph | table | pdf-graph | pdf-table | memo |
1.40 | 1.98 | -0.52 | -2.13 | |
| E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2013,
12.9 percent in 2021, 13.1 in percent in 2031, 13.9 percent in 2041, 13.5
percent in 2051, and 13.3 percent in 2061.
graph | table | pdf-graph | pdf-table | memo |
0.73 | 0.90 | -1.19 | -3.21 | |
| E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in
2013, 12.9 percent in 2021, 13.3 in percent in 2031, 13.8 percent in 2041,
14.4 percent in 2061, and 14.5 percent in 2076.
graph | table | pdf-graph | pdf-table | memo |
1.03 | 2.07 | -0.89 | -2.05 | |
| E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in
2013, 13.0 percent in 2026, 13.3 percent in 2041, 14.0 percent in 2061,
14.5 percent in 2071, and 14.7 percent in 2081.
graph | table | pdf-graph | pdf-table | memo |
0.84 | 2.25 | -1.08 | -1.87 | |
| E2.1 |
Beginning in 2011, make all earnings subject to the payroll tax
(but retain the current-law taxable maximum for benefit calculations).
graph | table | pdf-graph | pdf-table | memo |
2.33 | 2.48 | 0.41 | -1.64 | |
| E2.2 |
Beginning in 2011, make all earnings subject to the payroll tax and
credit them for benefit purposes.
graph | table | pdf-graph | pdf-table | memo |
1.90 | 1.65 | -0.02 | -2.47 | |
| E2.3 |
Determine the level of the contribution and benefit base such that
90 percent of the earnings would be subject to the payroll tax
(phased in 2011-2020). All earnings subject to the payroll tax would
be used in determining benefits.
graph | table | pdf-graph | pdf-table | memo |
0.76 | 0.64 | -1.16 | -3.48 | |
| E2.4 |
Make 90% of the earnings subject to the payroll tax (phased in
2011-2020), but retain the current-law taxable maximum for benefit
purposes. This estimate considers all self-employed earnings in
computing the percentage of earnings subject to the payroll tax.
graph | table | pdf-graph | pdf-table | memo |
0.96 | 1.10 | -0.96 | -3.02 | |
| E2.5 |
Raise the taxable maximum amount (the contribution and benefit base)
to include 90 percent of total OASDI covered earnings. Phase in this
increase gradually between 2012 and 2017. Benefit computations would
reflect all earnings up to the new taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
0.77 | 0.64 | -1.15 | -3.48 | |
| E2.6 |
Impose a 3 percent payroll tax on OASDI covered earnings above the current
taxable maximum starting in 2011. Benefit computations would not reflect
any earnings above the taxable maximum amount.
graph | table | pdf-graph | pdf-table | memo |
0.57 | 0.60 | -1.35 | -3.51 | |
| E2.7 |
In 2011 through 2013, raise the OASDI contribution and benefit base from
$106,800 to $115,200 (in 2009 AWI indexed dollars). For years after 2013,
the contribution and benefit base would be increased based on changes in
SSA's average wage index. Additional earnings subject to the OASDI payroll
tax would be credited for benefit calculation purposes.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.09 | -1.80 | -4.03 | |
| E2.8 |
Impose a 6 percent payroll tax on OASDI covered earnings above the
current taxable maximum starting in 2011. Benefit computations would
not reflect any earnings above the taxable maximum amount.
graph | table | pdf-graph | pdf-table | memo |
1.13 | 1.21 | -0.79 | -2.91 | |
| E2.9 |
Beginning in 2011, make all earnings subject to the OASDI payroll tax
and give benefit credit using an PIA formula that is extended to provide
less credit for those with AIMEs higher than the current-law maximum AIME
level. The high end of the benefit formula, applied to 2009, would be:
15 percent of AIME between $4,483 and $8,900 ($106,800 divided by 12),
plus 3 percent of AIME over $8,900.
graph | table | pdf-graph | pdf-table | memo |
2.18 | 2.18 | 0.26 | -1.94 | |
| E2.10 (2011) |
Beginning in 2011, raise the taxable maximum each year by an additional
2 percent over the current-law, wage-indexed amount until total earnings
subject to payroll taxes equals 90 percent of all covered earnings. Credit
the earnings for benefit purposes.
graph | table | pdf-graph | pdf-table | memo |
0.61 | 0.67 | -1.31 | -3.45 | |
| E2.10 (2012) |
Increase contribution and benefit base ("taxable maximum") by an additional
2 percent per year beginning in 2012 until taxable earnings are equal to 90
percent of covered earnings. Additional taxable earnings would be credited
for the purpose of computing benefits.
graph | table | pdf-graph | pdf-table | memo |
0.60 | 0.68 | -1.32 | -3.44 | |
| E2.11 |
Make all earnings subject to the employer OASDI payroll tax beginning in
2011. For the employee OASDI payroll tax and for benefit calculation
purposes, the taxable maximum would equal the present-law taxable maximum
for years 2010 and earlier. Beginning in 2011, the taxable maximum would
be raised each year by an additional 2 percent over the current-law,
wage-indexed amount until earnings subject to payroll taxes equals 90
percent of all covered earnings.
graph | table | pdf-graph | pdf-table | memo |
1.42 | 1.39 | -0.50 | -2.72 | |
| E2.12 |
Apply the following payroll tax rate above the current-law taxable
maximum, with no credit toward benefits: 2.0 percent in 2013 and
3.0 percent in 2061.
graph | table | pdf-graph | pdf-table | memo |
0.41 | 0.60 | -1.51 | -3.52 | |
| E2.13 |
Increase the taxable maximum (contribution and benefit base)
by an additional 2 percent over normal indexing starting in 2013, until
90 percent of OASDI covered earnings is taxable (achieved in 2050). The
present-law taxable maximum is retained for benefit purposes; no benefit
credit is given for earnings above the present-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
0.71 | 1.09 | -1.21 | -3.03 | |
| E2.14 |
Apply the following payroll tax rates above the current-law taxable
maximum, with no credit toward benefits: 2.0 percent in 2013, 3.0
percent in 2026, 3.5 percent in 2041, 4.5 percent in 2051, and 5.5
percent in 2061.
graph | table | pdf-graph | pdf-table | memo |
0.66 | 1.10 | -1.26 | -3.02 | |
| E2.15 |
Apply 2 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.19 | 0.16 | -1.73 | -3.95 | |
| E2.16 |
Apply 2 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.25 | 0.30 | -1.67 | -3.82 | |
| E2.17 |
Apply 3 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.25 | -1.63 | -3.87 | |
| E2.18 |
Apply 3 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.37 | 0.45 | -1.55 | -3.67 | |
| E2.19 |
Apply 4 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.39 | 0.34 | -1.53 | -3.78 | |
| E2.20 |
Apply 4 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.49 | 0.60 | -1.43 | -3.52 | |
| E2.21 |
Apply 2 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.14 | 0.12 | -1.78 | -4.00 | |
| E2.22 |
Apply 2 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.18 | 0.22 | -1.74 | -3.89 | |
| E2.23 |
Apply 3 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.19 | -1.70 | -3.93 | |
| E2.24 |
Apply 3 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.27 | 0.34 | -1.65 | -3.78 | |
| E2.25 |
Apply 4 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.25 | -1.63 | -3.87 | |
| E2.26 |
Apply 4 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.37 | 0.45 | -1.55 | -3.67 | |
| E2.27 |
Apply 2 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.10 | -1.80 | -4.02 | |
| E2.28 |
Apply 2 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.15 | 0.18 | -1.77 | -3.94 | |
| E2.29 |
Apply 3 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.18 | 0.15 | -1.74 | -3.97 | |
| E2.30 |
Apply 3 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.27 | -1.70 | -3.84 | |
| E2.31 |
Apply 4 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.24 | 0.20 | -1.68 | -3.92 | |
| E2.32 |
Apply 4 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.30 | 0.37 | -1.62 | -3.75 | |
| E2.33 |
Make 90% of the earnings subject to the payroll tax (phased in 2011-2020).
In addition, apply a tax rate of 6.2 percent for earnings above the revised
taxable maximum, phased in from 2011-2020. This additional tax rate would be
paid by employers on wages of their employees, and by self-employed workers
on their earnings. Benefit computations for workers would only reflect
earnings below the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
1.38 | 1.36 | -0.54 | -2.76 | |
| E2.34 |
Increase contribution and benefit base ("taxable maximum") by an additional
2 percent per year beginning in 2012 until taxable earnings are equal to 90
percent of covered earnings (estimated to occur in 2049). Additional taxable
earnings would be credited for the purpose of computing benefits. Create a
new bend point equal to the current-law taxable maximum and provide a 5
percent PIA formula factor for AIME above the new bend point.
graph | table | pdf-graph | pdf-table | memo |
0.67 | 0.90 | -1.25 | -3.21 | |
| E2.35 |
Eliminate the contribution and benefit base entirely beginning for 2017 and
later; phase in the inclusion of earnings above the current contribution and
benefit base for years 2011 through 2016. Assess the full Social Security
payroll tax rate of 12.4 percent on the additional earnings. The primary
insurance amount (PIA) would be determined in two components. The first
component would be based on the average indexed monthly earnings (AIME),
restricted to earnings at the level of the current-law contribution and benefit
base ($106,800 for 2010) for each year. The second component of the PIA would
be computed using the "AIME+", which would be equal to the sum of the indexed
earnings in excess of the current-law contribution and benefit base for the 35
years included in the AIME, divided by 420. The second component of PIA would
be equal to 3 percent of AIME+ up to $11,933 ((equals $250,000-$106,800)/12)
and 0.25 percent for AIME+ above this level for beneficiaries newly eligible in
2011. For beneficiaries newly eligible for benefits after 2011, the "bend point"
of $11,933 would be indexed by the national average wage index (AWI) in the same
manner as for the bend points in the first component of the PIA.
graph | table | pdf-graph | pdf-table | memo |
2.16 | 2.37 | 0.24 | -1.75 | |
| E2.36 |
Apply 12.4 payroll tax rate on earnings above $250,000 starting in 2012.
The $250,000 threshold does not increase in future years; when the
current-law contribution and benefit base exceeds $250,000, apply 12.4
percent tax rate to earnings above the base. Earnings subject to tax
above the threshold would not be credited for the purpose of computing
benefits.
graph | table | pdf-graph | pdf-table | memo |
2.07 | 2.47 | 0.15 | -1.64 | |
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