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| Actuarial Publications |
Summary of Provisions That Would Change the Social Security Program |
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Estimates based on the intermediate assumptions of the 2012 Trustees Report
| Printer-friendly Version (PDF) |
| Description of proposed provisions | 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 |
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| Category: Cost-of-Living Adjustment (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| A1 |
Starting December 2013, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.69 | 2.27 | -0.98 | -2.24 | |
| A2 |
Starting December 2013, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.88 | 1.19 | -1.79 | -3.32 | |
| A3 |
Starting December 2013, compute the COLA using a chained version of the consumer
price index for wage and salary workers (CPI-W). We estimate this new computation
will reduce the annual COLA by about 0.3 percentage point, on average.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) | memo (Becerra) | memo (Bipartisan Policy Center) | memo (Chaffetz) | memo (Fiscal Commission) |
0.54 | 0.73 | -2.13 | -3.78 | |
| A4 |
Starting December 2015, compute the COLA using a chained version of the consumer
price index for wage and salary workers (CPI-W). We estimate this new computation
will reduce the annual COLA by about 0.3 percentage point, on average. The new COLA
will not apply to DI benefits. It will apply to OASI benefits, except for those of
formerly disabled-workers who converted to retired-worker status.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.39 | 0.53 | -2.27 | -3.97 | |
| A5 |
Starting December 2013, add 1 percentage point to the annual COLA for beneficiaries
who have lived past a "specified age". The "specified age" is the sum of: (1) 65
and (2) the unisex cohort life expectancy at age 65.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
-0.09 | -0.11 | -2.75 | -4.61 | |
| A6 |
Starting December 2014, compute the COLA using the Consumer Price Index for the Elderly
(CPI-E). We estimate this new computation will increase the annual COLA by about 0.2
percentage point, on average.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch) |
-0.37 | -0.51 | -3.03 | -5.01 | |
| A7 |
Starting December 2013, reduce the annual COLA by 1 percentage point, but not
to less than zero. In cases where the unreduced COLA is less than 1 percentage
point, do not carry over the unused reduction into future years.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
1.59 | 2.14 | -1.08 | -2.37 | |
| Category: Provisions Affecting Level of Monthly Benefits (PIA) (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| B1.1 |
Price indexing of PIA formula factors beginning with those newly eligible for
OASDI benefits in 2019: Reduce PIA formula factors so that initial benefits
grow by inflation rather than by the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.62 | 7.57 | -0.04 | 3.06 | |
| B1.2 |
Progressive price indexing (30th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2019: Create a new bend point at
the 30th percentile of the AIME distribution of newly retired workers. Maintain
current-law benefits for earners at the 30th percentile and below. Reduce the 32 and
15 percent formula factors above the 30th percentile such that the initial benefit for
a worker with AIME equal to the taxable maximum grows by inflation rather than the
growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.43 | 4.10 | -1.24 | -0.40 | |
| B1.3 |
Progressive price indexing (40th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2019: Create a new bend point at
the 40th percentile of the AIME distribution of newly retired workers. Maintain
current-law benefits for earners at the 40th percentile and below. Reduce the 32 and
15 percent formula factors above the 40th percentile such that the initial benefit for
a worker with AIME equal to the taxable maximum grows by inflation rather than the
growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.19 | 3.40 | -1.48 | -1.11 | |
| B1.4 |
Progressive price indexing (50th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2019: Create a new bend point at the 50th
percentile of the AIME distribution of newly retired workers. Maintain current-law benefits for
earners at the 50th percentile and below. Reduce the 32 and 15 percent formula factors above the
50th percentile such that the initial benefit for a worker with AIME equal to the taxable maximum
grows by inflation rather than the growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.94 | 2.51 | -1.72 | -1.99 | |
| B1.5 |
Progressive price indexing (60th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2019: Create a new bend point at the 60th
percentile of the AIME distribution of newly retired workers. Maintain current-law benefits for
earners at the 60th percentile and below. Reduce the 32 and 15 percent formula factors above the
60th percentile such that the initial benefit for a worker with AIME equal to the taxable maximum
grows by inflation rather than the growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.66 | 1.55 | -2.00 | -2.95 | |
| B1.6 (2016) |
Progressive price indexing (30th percentile) of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2016: Create a new bend point at the 30th
percentile of the AIME distribution of newly retired workers. Maintain current-law benefits for
earners at the 30th percentile and below. Reduce the 32 and 15 percent formula factors above the
30th percentile such that the initial benefit for a worker with AIME equal to the taxable maximum
grows by inflation rather than the growth in the SSA average wage index. Young survivors (children
and spouses under normal retirement age with a child in care) are not affected by this proposal.
Disabled workers are: (a) not affected prior to normal retirement age; and (b) subject to a
proportional reduction in benefits, based on the worker's years of disability, upon conversion to
retired-worker beneficiary status.
graph | table | pdf-graph | pdf-table | memo (Bennett) |
1.53 | 3.90 | -1.14 | -0.60 | |
| B1.6 (2021) |
Progressive price indexing (30th percentile) of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2021: Create a new bend point at the 30th
percentile of the AIME distribution of newly retired workers. Maintain current-law benefits for
earners at the 30th percentile and below. Reduce the 32 and 15 percent formula factors above
the 30th percentile such that the initial benefit for a worker with AIME equal to the taxable
maximum grows by inflation rather than growth in the SSA average wage index. Disabled workers
are: (a) not affected prior to normal retirement age; and (b) subject to a proportional reduction
in benefits, based on the worker's years of disability, upon conversion to retired-worker
beneficiary status.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) |
1.06 | 3.42 | -1.60 | -1.09 | |
| B1.7 |
Progressive price indexing (40th percentile) of PIA formula factors for individuals newly
eligible for OASI benefits in 2020 through 2057: Create a new bend point at the 40th
percentile of the AIME distribution of newly retired workers. Maintain current-law benefit
credit for earners at the 40th percentile and below. Reduce the 32 and 15 formula factors above
the 40th percentile such that the initial benefit for a worker with AIME equal to the taxable
maximum grows by inflation rather than the growth in the SSA average wage index. Disabled
workers are: (a) not affected prior to normal retirement age; and (b) subject to a proportional
reduction in benefits, based on the worker's years of disability, upon conversion to
retired-worker beneficiary status. Young survivors (children of deceased workers and surviving
spouses with a child in care) are not affected.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee) |
0.90 | 2.36 | -1.76 | -2.15 | |
| B1.8 |
Progressive price indexing (50th percentile) of PIA formula factors for individuals newly
eligible for OASI benefits in 2017 through 2056: Create a new bend point at the 50th
percentile of the AIME distribution of newly retired workers. Maintain current-law benefit
credit for earners at the 50th percentile and below. Reduce the 32 and 15 formula factors
above the 50th percentile such that the initial benefit for a worker with AIME equal to the
taxable maximum grows by inflation rather than the growth in the SSA average wage index.
Disabled workers are: (a) not affected prior to normal retirement age; and (b) subject to a
proportional reduction in benefits, based on the worker's years of disability, upon conversion
to retired-worker beneficiary status.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.96 | 2.18 | -1.70 | -2.33 | |
| B2.1 |
Beginning with those newly eligible for OASI benefits in 2022, multiply the PIA factors by the
ratio of life expectancy at 67 for 2017 to the life expectancy at age 67 for the 4th year prior
to the year of benefit eligibility. Unisex life expectancies, based on period life tables as
computed by SSA's Office of the Chief Actuary, are used to determine the ratio. Disabled workers
are: (a) not affected prior to normal retirement age; and (b) subject to a proportional reduction
in benefits, based on the worker's years of disability, upon conversion to retired-worker beneficiary
status.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) | memo (Bennett) |
0.53 | 1.77 | -2.14 | -2.74 | |
| B3.1 |
Beginning with those newly eligible for OASDI benefits in 2013, multiply the 32 and 15 percent
formula factors each year by 0.987. Stop reductions in 2043, when the formula factors reach
21 percent and 10 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.56 | 3.01 | -1.10 | -1.49 | |
| B3.2 |
Beginning with those newly eligible for OASI benefits in 2020, multiply the 90 and 32 percent
PIA factors each year by 0.9925 and 0.982, respectively. Stop reductions in 2057. Beginning
with those newly eligible for OASI benefits in 2015, multiply the 15 factor by 0.982. Stop
reduction of the 15 factor in 2052. Child beneficiaries and spouses with a child in care
under the OASI program are not affected by this proposal. Disabled workers are: (a) not
affected prior to normal retirement age; and (b) subject to a proportional reduction in
benefits, based on the worker's years of disability, upon conversion to retired-worker
beneficiary status.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
1.99 | 5.24 | -0.68 | 0.74 | |
| B3.3 |
Beginning with those newly eligible for OASDI benefits in 2013, use a modified primary
insurance amount (PIA) formula. The modified formula: (1) increases the first bend point
to the equivalent of $800 in 2009; (2) places a new bend point 75 percent of the way
between the reset first bend point and the current-law second bend point; (3) lowers the
PIA factor between the new bend point and the upper bend point from 32 percent to 20
percent; and (4) lowers the factor above the upper bend point from 15 percent to 10 percent.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.22 | 0.27 | -2.44 | -4.24 | |
| B3.4 |
Beginning with those newly eligible for OASDI benefits in 2016, multiply all PIA formula
factors each year by 0.991. Stop reductions after 2044. Disabled workers are: (a) not
affected prior to normal retirement age; and (b) subject to a proportional reduction in
benefits, based on the worker's years of disability, upon conversion to retired-worker
beneficiary status. Young survivors (children of deceased workers and surviving spouses
with a child in care) are not affected.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
1.48 | 3.13 | -1.18 | -1.37 | |
| B3.5 |
Progressive indexing (30th percentile) of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2015, continuing through 2052, and resuming in 2073:
Create a new bend point at the 30th percentile of the AIME distribution of newly retired
workers. Maintain current-law benefits for earners at the 30th percentile and below. Reduce
the 32 and 15 percent formula factors above the 30th percentile such that the initial benefit
for a worker with AIME equal to the taxable maximum is reduced by 1.12 percent per year as
compared to current law (for the years that progressive indexing applies). Disabled workers
are: (a) not affected prior to normal retirement age; and (b) subject to a proportional
reduction in benefits, based on the worker's years of disability, upon conversion to
retired-worker beneficiary status.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.22 | 2.89 | -1.45 | -1.62 | |
| B3.6 |
Progressive indexing (30th percentile) of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2015, continuing through 2064: Create a new bend point
at the 30th percentile of the AIME distribution of newly retired workers. Maintain current-law
benefits for earners at the 30th percentile and below. Reduce the 32 and 15 percent formula
factors above the 30th percentile such that the initial benefit for a worker with AIME equal to
the taxable maximum is reduced by 1.12 percent per year as compared to current law (for the years
that progressive indexing applies). Disabled workers are: (a) not affected prior to normal
retirement age; and (b) subject to a proportional reduction in benefits, based on the worker's
years of disability, upon conversion to retired-worker beneficiary status.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.30 | 3.32 | -1.37 | -1.18 | |
| B3.7 |
Progressive indexing (30th percentile) of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2015, continuing through 2024, and then resuming in 2063:
Create a new bend point at the 30th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 30th percentile and below. Reduce the 32 and 15
percent formula factors above the 30th percentile such that the initial benefit for a worker with
AIME equal to the taxable maximum is reduced by 1.12 percent per year as compared to current law
(for the years that progressive indexing applies). Disabled workers are: (a) not affected prior to
normal retirement age; and (b) subject to a proportional reduction in benefits, based on the
worker's years of disability, upon conversion to retired-worker beneficiary status.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.58 | 1.51 | -2.09 | -3.00 | |
| B3.8 |
Beginning with those newly eligible for OASDI benefits in 2019, create a new bend point at the
50th percentile of the AIME distribution of newly retired workers and gradually reduce all PIA
formula factors except for the 90 percent factor. By 2052: a) the 32 percent PIA formula factor
below the new bend point reduces to 30 percent; b) the 32 percent PIA factor above the new bend
point reduces to 10 percent; and c) the 15 percent factor reduces to 5 percent.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.86 | 2.15 | -1.81 | -2.35 | |
| B3.9 |
Beginning with those newly eligible for OASDI benefits in 2025, gradually reduce the 15 percent
PIA formula factor in each year so that it reaches 10 percent for those newly eligible in 2054
and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.07 | 0.21 | -2.59 | -4.29 | |
| B3.10 |
Increase the first PIA bend point above the current law level for workers newly eligible for
benefits in 2019 and later; by 1 percent for 2019, by 2 percent for 2020,..., and by 15 percent
for 2033 and later.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) | memo (Harkin 2012) |
-0.37 | -0.71 | -3.03 | -5.22 | |
| B4.1 |
Increase the number of years used to calculate benefits for retirees and survivors (but not for
disabled workers) from 35 to 38, phased in over the years 2013-2017.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.30 | 0.43 | -2.37 | -4.07 | |
| B4.2 |
Increase the number of years used to calculate benefits for retirees and survivors (but
not for disabled workers) from 35 to 40, phased in over the years 2013-2021.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.48 | 0.73 | -2.19 | -3.77 | |
| B4.3 |
For the OASI and DI computation of the PIA, gradually reduce the maximum number of
drop-out years from 5 to 0, phased in over the years 2014-2022.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.64 | 1.02 | -2.02 | -3.48 | |
| B5.1 |
Increase the PIA to a level such that a worker with 30 years of earnings at the
minimum wage level receives an adjusted PIA equal to 120 percent of the Federal
poverty level for an aged individual. This provision takes full effect for all
newly eligible OASDI workers in 2030, and is phased in for new eligibles in 2021
through 2029. The percentage increase in PIA is lowered proportionately for those
with fewer than 30 years of earnings, down to no enhancement for workers with 20
or fewer years of earnings. (Year-of-work requirements are "scaled" for disabled
workers based on their years of potential work from age 22 to benefit eligibility).
The benefit enhancement percentage is reduced proportionately for workers with
higher average indexed monthly earnings (AIME), down to no enhancement for those
with AIME at least twice that of a 35-year steady minimum wage earner.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) |
-0.02 | 0.00 | -2.68 | -4.50 | |
| B5.2 |
Beginning in 2013, reconfigure the special minimum benefit: (a) A year of coverage is
defined as a year in which 4 quarters of coverage are earned. (b) At implementation,
set the PIA for 30 years of coverage equal to 125 percent of the monthly poverty level
(about $1,134 in 2011). For those with under 30 years of coverage, the PIA per year of
coverage over 10 years is $1,134/20 = $56.70. (c) Index the initial PIA per year of
coverage by wage growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.19 | -0.27 | -2.86 | -4.77 | |
| B5.3 |
Beginning in 2013, reconfigure the special minimum benefit: (a) A year of coverage is
defined to be either a year in which 4 quarters of coverage are earned or a child is
in care. Childcare years are granted to parents who have a child under 5, with a limit
of 8 such years. (b) At implementation, set the PIA for 30 years of coverage equal to
125 percent of the monthly poverty level (about $1,134 in 2011). For those with under
30 years of coverage, the PIA per year of coverage over 10 years is $1,134/20 = $56.70.
(c) Index the initial PIA per year of coverage by wage growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.28 | -0.41 | -2.95 | -4.91 | |
| B5.4 |
Beginning in 2019, reconfigure the special minimum benefit: (a) A year of coverage is
defined as a year in which 4 quarters of coverage are earned. (b) At implementation,
set the PIA for 30 years of coverage equal to 125 percent of the monthly poverty level
(about $1,134 in 2011). For those with under 30 years of coverage, the PIA per year of
coverage over 10 years is $1,134/20 = $56.70. (c) From 2011 to the year of implementation,
2019, index the PIA per year of coverage using the chain-CPI index. Then, for later years,
index the PIA per year of coverage by wage growth for successive cohorts. (d) Scale work
requirements for disabled workers, based on the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
-0.13 | -0.21 | -2.79 | -4.72 | |
| B5.5 |
Beginning in 2014, reconfigure the special minimum benefit: (a) A year of coverage is
defined as a year in which either 20 percent of the "old law maximum" is earned or a
child is in care. Childcare years are granted to parents who have a child under 6,
with a limit of 8 such years. (b) At implementation, set the PIA for 30 years of
coverage equal to 133 percent of the poverty level. For those with under 30 years of
coverage, the PIA per year of coverage over 19 is 12.09 percent of poverty. (c) Use
the 2011 Aged Federal poverty level, increased by the SSA average wage index to 2 years
prior to benefit eligibility. (d) Scale work requirements for disabled workers, based
on the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
-0.10 | -0.16 | -2.76 | -4.66 | |
| B5.6 |
Beginning in 2013, reconfigure the special minimum benefit: (a) A year of coverage is
defined to be either a year in which 4 quarters of coverage are earned or a child is
in care. Childcare years are granted to parents who have a child under 6, with a limit
of 5 such years. (b) At implementation, set the PIA for 30 years of coverage equal to
100 percent of the monthly poverty level (about $931 in 2012). For those with under 30
years of coverage, the PIA per year of coverage over 10 years is $931/20 = $46.55. (c)
From 2012 to the year of implementation, 2013, index the PIA per year of coverage using
the CPI index. Then, for later years, index the PIA per year of coverage by wage growth
for successive cohorts. (d) Scale work requirements for disabled workers, based on the
number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
-0.13 | -0.20 | -2.80 | -4.71 | |
| B5.7 |
Beginning for those newly eligible for OASDI benefits in 2015, increase the special
minimum benefit to 100 percent of poverty by making the following changes: (a) The
number of years of work (YOW) is determined as total quarters of coverage divided by 4,
ignoring any fraction. Up to 5 additional years with a child under in 6 may be counted
as YOWs. (b) Set the PIA for 30 or more YOWs equal to 100 percent of the monthly HHS
poverty level for the year prior to eligibility. For workers between 11 and 29 YOWs,
reduce the special minimum by 3 1/3 percentage point per YOW so that at 29 YOCs the
minimum would be 96 2/3% of poverty,..., down to 11 YOWs at 36 2/3% of poverty. No
minimum for 10 or fewer YOCs.
graph | table | pdf-graph | pdf-table | Moore |
-0.02 | 0.00 | -2.68 | -4.51 | |
| B6.1 |
Provide a 5 percent increase to the monthly benefit amount (MBA) of any beneficiary who is
85 or older at the beginning of 2013 or who reaches their 85th birthday after the beginning
of 2013.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.10 | -0.15 | -2.77 | -4.65 | |
| B6.2 |
Provide the same dollar amount increase to the monthly benefit amount (MBA) of any
beneficiary who is 85 or older at the beginning of 2013 or who reaches their 85th
birthday after the beginning of 2013. The dollar amount of increase equals 5 percent
of the average retired-worker MBA in the prior year.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.11 | -0.15 | -2.77 | -4.66 | |
| B6.3 |
Provide an increase in the benefit level of any beneficiary who is 85 or older at
the beginning of 2014 or who reaches their 85th birthday after the beginning of 2014.
Increase the beneficiary’s PIA based on an amount equal to the average retired-worker
PIA at the end of 2013, or at the end of the year age 80 if later. Increase the
beneficiary’s PIA by 5 percent of this amount for those older than 85 at the beginning
of 2014 and by 5 percent of this amount at age 85 for others, phased in at 1 percent
per year for ages 81-85.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
-0.14 | -0.19 | -2.80 | -4.69 | |
| B6.4 |
Starting in 2013, provide a 5 percent uniform benefit increase 24 years after initial
benefit eligibility. Phase in the benefit increase at 1 percent per year from the 20th
through 24th years after eligibility. For disabled workers, the eligibility age is the
initial entitlement year to the benefit. The benefit increase is equal to 5 percent of
the PIA of a worker assumed to have career-average earnings equal to SSA’s average wage
index.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
-0.15 | -0.20 | -2.81 | -4.71 | |
| B6.5 |
Effective in 2015, provide a 5-percent uniform PIA increase 20 years after eligibility.
The benefit increase is phased in at 1 percent per year from the 16th through 20th years
after initial eligibility. The full PIA increase is equal to 5 percent of the PIA of a
worker assumed to have career-average earnings equal to SSA’s average wage index.
graph | table | pdf-graph | pdf-table | memo (Moore) |
-0.23 | -0.31 | -2.89 | -4.81 | |
| B7.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in 2013 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.37 | 0.51 | -2.29 | -4.00 | |
| B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2013 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.62 | 0.84 | -2.04 | -3.66 | |
| B7.3 |
Give credit to parents with a child under 6 for earnings for up to five years. The
earnings credited for a childcare year equal one half of the SSA average wage index
(about $21,505 in 2011). The credits are available for all past years to newly
eligible retired-worker and disabled-worker beneficiaries starting in 2013. The 5
years are chosen to yield the largest increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.25 | -0.37 | -2.91 | -4.88 | |
| B7.4 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of 2013
and for those newly eligible for benefits after the beginning of 2013.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.31 | -0.34 | -2.98 | -4.84 | |
| B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2013
and for those newly eligible for benefits after the beginning of 2013.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.77 | -0.84 | -3.44 | -5.34 | |
| B7.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of 2013
and for those newly eligible for benefits after the beginning of 2013.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-3.10 | -3.36 | -5.76 | -7.87 | |
| B7.7 |
Reduce individual Social Security benefits if modified adjusted gross income, or MAGI
(AGI less taxable Social Security benefits plus nontaxable interest income) is above
$60,000 for single taxpayers or $120,000 for taxpayers filing jointly. This provision
is effective for individuals newly eligible for benefits in 2020 or later. The percentage
reduction increases linearly up to 50 percent for single/joint filers with MAGI of
$180,000/$360,000 or above. Index the MAGI thresholds for years after 2020, based on
changes in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.26 | 0.39 | -2.41 | -4.11 | |
| Category: Provisions Affecting Retirement Age (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| C1.1 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 1 month every 2 years until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.32 | 0.72 | -2.34 | -3.78 | |
| C1.2 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 2 months every year until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.42 | 0.72 | -2.25 | -3.78 | |
| C1.3 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
index the NRA to maintain a constant ratio of expected retirement years
(life expectancy at NRA) to potential work years (NRA minus 20). We assume
the NRA will increase 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) | memo (AARP) | memo (Ryan 2008) | memo (Social Security Advisory Board) |
0.45 | 1.56 | -2.21 | -2.95 | |
| C1.4 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 2 months per year until it reaches 69 for individuals
attaining age 62 in 2034. Thereafter, increase the NRA 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
1.00 | 2.42 | -1.67 | -2.08 | |
| C1.5 |
Starting in 2013, allow workers to choose whether to have their payroll tax
rate reduced by 2 percentage points. For each calendar year that a worker
chooses to have their payroll tax reduced, their NRA increases 1 month. We
assume 2/3 of workers each year will choose this payroll reduction. The
General Fund of the Treasury reimburses the OASI and DI Trust Funds for the
reduction in payroll tax revenue.
graph | table | pdf-graph | pdf-table | memo (Landry) |
0.65 | 1.50 | -2.01 | -3.01 | |
| C2.1 |
Increase the earliest eligibility age (EEA) by two months every year for those age
62 starting in 2014 and ending in 2031 (EEA reaches 65 for those age 62 in 2031).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.07 | -0.44 | -2.73 | -4.94 | |
| C2.2 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, index the NRA to
maintain a constant ratio of expected retirement years (life expectancy at NRA) to potential
work years (NRA minus 20). We assume the NRA will increase 1 month every 2 years. Also, raise
the earliest eligibility age (EEA) for retired-workers, aged widow(er)s, and disabled widow(er)s
by the same amount as the NRA starting for those attaining EEA in 2017.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) | memo (Warshawsky) |
0.48 | 1.49 | -2.18 | -3.02 | |
| C2.3 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, index the
NRA to maintain a constant ratio of expected retirement years (life expectancy at NRA) to
potential work years (NRA minus 20). We assume the NRA will increase 1 month every 2 years.
Also, increase the earliest eligibility age (EEA) by the same amount as the NRA starting for
those age 62 in 2022 so as to maintain a 5 year difference between the two ages. Include a
"hardship exemption" with no EEA/NRA change for a worker with 25 years of earnings (with 4
quarters of coverage each), and average indexed monthly earnings (AIME) less than 250 percent
of the poverty level (wage-indexed from 2011). The hardship exemption is phased out for those
with AIME above 400 percent of the poverty level.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.38 | 1.24 | -2.29 | -3.27 | |
| C2.4 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, increase
both the NRA and the earliest eligibility age (EEA) by 36/47 of a month per year until
the NRA and EEA reach 65 and 70 respectively. For each year, the computed EEA and NRA
rounds down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis) |
0.67 | 2.01 | -2.00 | -2.49 | |
| C2.5 |
Increase the normal retirement age (NRA) 3 months per year starting for those age 62
in 2017 until the NRA reaches 70 in 2032. Thereafter, index the NRA to maintain a
constant ratio of expected retirement years (life expectancy at NRA) to potential
work years (NRA minus 20). We assume the NRA will increase 1 month every 2 years. Also,
increase the earliest eligibility age (EEA) from 62 to 64 at the same time the NRA
increases from 67 to 69; that is, for those attaining age 62 in 2021 through 2028. Keep
EEA at 64 thereafter.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee) |
1.40 | 2.87 | -1.27 | -1.63 | |
| C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age (EEA) for
those age 62 in 2020-21 to 68 and 63, respectively and then by 3 months per year in
2022-25 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.89 | 1.22 | -1.77 | -3.28 | |
| C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age (EEA)
for those age 62 starting in 2016 by 3 months per year until EEA reaches 64 in
2023 and NRA reaches 69 in 2027.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.86 | 1.22 | -1.81 | -3.28 | |
| C2.8 |
Starting in 2015, convert all disabled-worker beneficiaries to retired-worker status
upon attainment of their earliest eligibility age (EEA) rather than their normal
retirement age (NRA). After conversion, apply the early retirement reduction for
retirement at EEA (currently 25 percent for those age 62 in 2014) phased in over 40
years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.40 | 0.80 | -2.26 | -3.70 | |
| Category: Provisions Affecting Family Member Benefits (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| D1 |
Beginning in 2013, continue benefits for children of disabled or deceased
workers until age 22 if the child is in high school, college or vocational school.
graph | table | pdf-graph | pdf-table | memo (Moore) | memo (National Academy of Social Insurance) |
-0.07 | -0.06 | -2.73 | -4.57 | |
| D2 |
The current spouse benefit is based on 50 percent of the PIA of the other spouse.
Reduce this percent each year by 1 percentage point beginning with newly eligible
spouses in 2013, until the percent reaches 33 in 2029.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
0.12 | 0.18 | -2.54 | -4.33 | |
| Category: Provisions Affecting Payroll Tax Rates or Taxable Maximum (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent
in 2013 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.75 | 2.87 | 0.09 | -1.63 | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent in
2025-2054, and to 18.2 percent in years 2055 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.02 | 5.62 | 0.35 | 1.11 | |
| E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in
2013 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -3.63 | -5.51 | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2018-2037, until the rate reaches 14.4 percent in 2037 and later.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
1.41 | 1.99 | -1.25 | -2.52 | |
| E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2015,
12.9 percent in 2023, 13.1 in percent in 2033, 13.9 percent in 2043, 13.5 percent
in 2053, and 13.3 percent in 2063 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.74 | 0.91 | -1.93 | -3.60 | |
| E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2015,
12.9 percent in 2023, 13.3 in percent in 2033, 13.8 percent in 2043, 14.4 percent
in 2063, and 14.5 percent in 2078 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.04 | 2.07 | -1.63 | -2.44 | |
| E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2015,
13.0 percent in 2028, 13.3 in percent in 2043, 14.0 percent in 2063, 14.5 percent
in 2073, and 14.7 percent in 2083 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.84 | 2.25 | -1.82 | -2.26 | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point each
year from 2015-2020, until the rate reaches 13.0 percent for 2020 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.53 | 0.60 | -2.13 | -3.90 | |
| E2.1 |
Eliminate the taxable maximum in years 2013 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Do not provide benefit credit for earnings above
the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.36 | 2.49 | -0.31 | -2.02 | |
| E2.2 |
Eliminate the taxable maximum in years 2013 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Provide benefit credit for earnings above the
current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.92 | 1.64 | -0.75 | -2.86 | |
| E2.3 |
Eliminate the taxable maximum in years 2013 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Provide benefit credit for earnings above the
current-law taxable maximum, adding a bend point at the current-law taxable maximum
and applying a formula factor of 3 percent for AIME above this new bend point.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
2.16 | 2.18 | -0.51 | -2.32 | |
| E2.4 |
Eliminate the taxable maximum for years 2019 and later (phased in 2013-2018), and
apply full 12.4 percent payroll tax rate to all earnings. Provide benefit credit
for earnings above the current-law taxable maximum that were taxed after 2012,
using a secondary PIA formula. This secondary PIA formula uses: (1) an “AIME+”
derived from annual earnings from each year after 2012 that were in excess of that
year’s current-law taxable maximum; (2) a bend point equal to 134 percent higher
of the monthly current-law taxable maximum; and (3) formula factors of 3 percent
and 0.25 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Deutch) |
2.18 | 2.37 | -0.48 | -2.14 | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2013, and
tax all earnings once the current-law taxable maximum exceeds $250,000. Do not
provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Sanders) | memo (DeFazio) |
2.14 | 2.49 | -0.53 | -2.02 | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum
starting in 2013. Do not provide benefit credit for earnings above the
current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.61 | 0.64 | -2.06 | -3.86 | |
| E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable maximum
starting in 2013. Do not provide benefit credit for earnings above the
current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Wexler) |
1.19 | 1.26 | -1.47 | -3.25 | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum
for years 2015-2062, and a 3 percent rate for years 2063 and later. Do not
provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.44 | 0.64 | -2.22 | -3.87 | |
| E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum:
2.0 percent in 2015, 3.0 percent in 2028, 3.5 percent in 2043, 4.5 percent in
2053, and 5.5 percent in 2063 and later. Do not provide benefit credit for
earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.70 | 1.15 | -1.96 | -3.36 | |
| E2.10 |
Eliminate the taxable maximum in years 2023 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in 2014,
2.48 percent in 2015, and so on, up to 11.16 percent in 2022. Provide benefit credit
for earnings above the current-law taxable maximum, adding a bend point at the
current-law taxable maximum and applying a formula factor of 5 percent for AIME above
this new bend point.
graph | table | pdf-graph | pdf-table | memo (Harkin 2012) |
1.92 | 2.09 | -0.74 | -2.42 | |
| E2.11 |
Eliminate the taxable maximum in years 2018 and later. Phase in elimination by taxing
all earnings above the current law taxable maximum at 2.48% in 2014, 4.96% in 2015, up
to 12.4% in 2018 and later. Credit the additional earnings for benefit purposes by: (a)
calculating a second average indexed monthly earnings ("AIME+") reflecting only earnings
taxed above the current law taxable maximum, (b) applying a 5 percent factor on this newly
computed "AIME+" to develop a second component of the PIA, and (c) adding this second
component to the current-law PIA.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) |
2.11 | 2.21 | -0.56 | -2.30 | |
| E2.12 |
Eliminate the taxable maximum in years 2024 and later. Phase in elimination by taxing all
earnings above the current-law taxable maximum at: 1.24 percent in 2015, 2.48 percent in
2016, and so on, up to 11.16 percent in 2023. Provide benefit credit for earnings above the
current-law taxable maximum, adding a bend point at the current law taxable maximum and
applying a formula factor of 3 percent for AIME above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Moore) |
1.92 | 2.18 | -0.75 | -2.32 | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2013-2022). Provide benefit credit for earnings
up to the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.78 | 0.68 | -1.89 | -3.83 | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2013-2022). Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.14 | -1.68 | -3.36 | |
| E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2014-2019). Provide benefit credit for earnings
up to the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.79 | 0.68 | -1.87 | -3.83 | |
| E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed
dollars), phased in 2013-2015. Provide benefit credit for earnings up to the
revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.11 | 0.08 | -2.55 | -4.42 | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2013 until taxable earnings equal 90 percent of covered earnings. Provide
benefit credit for earnings up to the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) | memo (National Academy of Social Insurance) |
0.62 | 0.71 | -2.04 | -3.79 | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2015
until taxable earnings equal 90 percent of covered earnings. Do not provide benefit
credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.73 | 1.14 | -1.94 | -3.37 | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in 2014
until taxable earnings equal 90 percent of covered earnings. Provide benefit credit
for earnings up to the revised taxable maximum levels. Create a new bend point equal
to the current-law taxable maximum with a 5 percent formula factor applying above the
new bend point.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.63 | 0.82 | -2.03 | -3.69 | |
| E3.8 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017, with the threshold wage-indexed after 2020. Provide
proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.20 | 0.17 | -2.46 | -4.33 | |
| E3.9 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2020. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.26 | 0.31 | -2.40 | -4.19 | |
| E3.10 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2020. Provide proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.15 | 0.13 | -2.51 | -4.38 | |
| E3.11 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2020. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.20 | 0.24 | -2.47 | -4.27 | |
| E3.12 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2020. Provide proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.13 | 0.10 | -2.54 | -4.40 | |
| E3.13 |
Beginning in 2020, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2020. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (similar provisions with 3 percent and 4 percent payroll tax rates are also available) |
0.16 | 0.19 | -2.51 | -4.31 | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2013. For the employee payroll tax (6.2 percent) and for
benefit calculation purposes, beginning in 2013, increase the taxable
maximum by an additional 2 percent per year until taxable earnings equal
90 percent of covered earnings.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
1.44 | 1.42 | -1.22 | -3.09 | |
| E3.15 |
Increase the taxable maximum until taxable earnings equal 90 percent of
covered earnings (phased in 2013-2022). In addition, apply a tax rate of
6.2 percent for earnings above the revised taxable maximum (phased in from
2013-2022). Provide benefit credit on earnings taxed up to the revised
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.40 | 1.38 | -1.26 | -3.12 | |
| Category: Provisions Affecting Coverage of Employment (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| F1 |
Starting in 2013, cover newly hired State and local government employees.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) | memo (Bipartisan Policy Center) | memo (Warshawsky) | memo (Social Security Advisory Board) |
0.16 | -0.17 | -2.50 | -4.67 | |
| F2 |
Starting in 2013, exempt individuals with more than 180 quarters of
coverage from the OASDI payroll tax.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.27 | -0.39 | -2.93 | -4.89 | |
| F3 |
Expand covered earnings to include employer and employee premiums for
employer-sponsored group health insurance (ESI). Starting in 2018,
phase out the OASDI payroll tax exclusion for ESI premiums. Set an
exclusion level at the 75th percentile of premium distribution in 2018,
with amounts above that subject to the payroll tax. Reduce the exclusion
level each year by 10 percent of the 2018 exclusion level until fully
eliminated in 2028. Eliminate the excise tax on ESI premiums scheduled
to begin in 2018.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.99 | 0.92 | -1.67 | -3.59 | |
| F4 |
Expand covered earnings to include contributions to voluntary salary reduction
plans (such as Cafeteria 125 plans and Flexible Spending Accounts). Starting
in 2013, subject these contributions to the OASDI payroll tax, making the payroll
tax treatment of these contributions like 401(k) contributions.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.22 | 0.14 | -2.45 | -4.37 | |
| F5 |
Tax Reform for Business: Establish a value added tax of 3.0 percent
for 2014 and 6.5 percent for 2015 and later. Starting in 2014, reduce the
corporate income tax rate from 35 to 27 percent.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
-0.01 | 0.17 | -2.68 | -4.33 | |
| Category: Provisions Affecting Trust Fund Investment in Equities (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| G1 |
Invest 40 percent of the Trust Funds in equities (phased in 2013-2027),
assuming an ultimate 6.4 percent real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.59 | 0.00 | -2.08 | -4.50 | |
| G2 |
Invest 40 percent of the Trust Funds in equities (phased in 2013-2027),
assuming an ultimate 5.4 percent real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.43 | 0.00 | -2.24 | -4.50 | |
| G3 |
Invest 40 percent of the Trust Funds in equities (phased in 2013-2027),
assuming an ultimate 2.9 percent real rate of return on equities. Thus,
the ultimate rate of return on equities is the same as that assumed for
Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.00 | 0.00 | -2.67 | -4.50 | |
| G4 |
Invest 15 percent of the Trust Fund in equities (phased in 2013-2022),
assuming an ultimate 6.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.24 | 0.00 | -2.42 | -4.50 | |
| G5 |
Invest 15 percent of the Trust Funds in equities (phased in 2013-2022),
assuming an ultimate 2.9 percent annual real rate of return on equities.
Thus, the ultimate rate of return on equities is the same as that assumed
for Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.00 | 0.00 | -2.67 | -4.50 | |
| Category: Provisions Affecting Taxation of Benefits (2012 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.67 | -4.50 | ||||
| H1 |
Starting in 2013, tax Social Security benefits in a manner similar to
private pension income. Phase out the lower-income thresholds during 2013-2022.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.26 | 0.17 | -2.40 | -4.34 | |
| H2 |
Starting in 2013, tax Social Security benefits in a manner similar to
private pension income. Phase out the lower-income thresholds during 2013-2032.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.24 | 0.17 | -2.43 | -4.34 | |
| H3 |
Tax Reform for Individuals: Starting in 2014, modify personal income tax by:
(a) establishing two-brackets with marginal rates of 15 and 27 percent separated at
$51,000 (CPI indexed); (b) creating a non-refundable credit for low-income tax filers
age 65 and older; and (c) treating capital gains as regular income. Tax all Social
Security benefits at the applicable marginal rate (15 or 27 percent) less a non-refundable
credit of 7.5 percent. Base revenue to OASDHI on the net marginal rates of 7.5 and
19.5 percent, with 40 percent of revenue dedicated to HI.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
-0.03 | -0.06 | -2.69 | -4.56 | |
 |
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