www.socialsecurity.gov
|
Skip to content Social Security Online |
Actuarial Publications | |
|
www.socialsecurity.gov
|
| Actuarial Publications |
Summary of Provisions That Would Change the Social Security Program |
|
Estimates based on the intermediate assumptions of the 2013 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 |
|||
| Category: Provisions Affecting Cost-of-Living Adjustment (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| A1 |
Starting December 2014, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.73 | 2.35 | -0.99 | -2.42 | |
| A2 |
Starting December 2014, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.90 | 1.23 | -1.82 | -3.54 | |
| A3 |
Starting December 2014, 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(FY 2014 Budget) | memo (Chaffetz) | memo (Becerra) | memo (Fiscal Commission) | memo (Bipartisan Policy Center) | memo (Social Security Advisory Board) |
0.55 | 0.75 | -2.17 | -4.01 | |
| A4 |
Starting December 2016, 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) |
0.40 | 0.56 | -2.31 | -4.21 | |
| A5 |
Starting December 2014, 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 | -2.81 | -4.88 | |
| A6 |
Starting December 2015, 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 (Larson) | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch) |
-0.37 | -0.53 | -3.09 | -5.30 | |
| A7 |
Starting December 2014, 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) |
1.62 | 2.21 | -1.09 | -2.55 | |
| Category: Provisions Affecting Level of Monthly Benefits (PIA) (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| B1.1 |
Price indexing of PIA formula factors beginning with those newly eligible for OASDI
benefits in 2020: 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) |
2.57 | 7.59 | -0.15 | 2.82 | |
| B1.2 |
Progressive price indexing (30th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2020: 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) |
1.44 | 4.26 | -1.28 | -0.50 | |
| B1.3 |
Progressive price indexing (40th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2020: 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) |
1.22 | 3.62 | -1.50 | -1.15 | |
| B1.4 |
Progressive price indexing (50th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2020: 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) |
0.99 | 2.79 | -1.73 | -1.98 | |
| B1.5 |
Progressive price indexing (60th percentile) of PIA formula factors beginning with
individuals newly eligible for OASDI benefits in 2020: 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) |
0.71 | 1.77 | -2.01 | -2.99 | |
| B1.6 (2017) |
Progressive price indexing (30th percentile) of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2017: 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) |
1.57 | 4.07 | -1.15 | -0.69 | |
| B1.6 (2022) |
Progressive price indexing (30th percentile) of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2022: 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) |
1.11 | 3.59 | -1.61 | -1.17 | |
| B1.7 |
Progressive price indexing (40th percentile) of PIA formula factors for individuals newly
eligible for OASI benefits in 2021 through 2058: 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) |
0.93 | 2.50 | -1.79 | -2.27 | |
| B1.8 |
Progressive price indexing (50th percentile) of PIA formula factors for individuals newly eligible
for OASI benefits in 2018 through 2057: 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) |
1.01 | 2.37 | -1.71 | -2.40 | |
| B2.1 |
Beginning with those newly eligible for OASI benefits in 2023, multiply the PIA factors by the ratio
of life expectancy at 67 for 2018 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 | 1.76 | -2.19 | -3.01 | |
| B3.1 |
Beginning with those newly eligible for OASDI benefits in 2014, multiply the 32 and 15
percent formula factors each year by 0.987. Stop reductions in 2044, when the formula
factors reach 21 percent and 10 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.57 | 3.11 | -1.15 | -1.66 | |
| B3.2 |
Beginning with those newly eligible for OASI benefits in 2021, multiply the 90 and 32
percent PIA factors each year by 0.9925 and 0.982, respectively. Stop reductions in 2058.
Beginning with those newly eligible for OASI benefits in 2016, multiply the 15 factor by
0.982. Stop reduction of the 15 factor in 2053. 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) |
2.00 | 5.37 | -0.72 | 0.60 | |
| B3.3 |
Beginning with those newly eligible for OASDI benefits in 2014, 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) |
0.23 | 0.31 | -2.49 | -4.46 | |
| B3.4 |
Beginning with those newly eligible for OASDI benefits in 2017, multiply all PIA formula
factors each year by 0.991. Stop reductions after 2045. 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 | 3.20 | -1.23 | -1.57 | |
| B3.5 |
Progressive indexing (30th percentile) of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2016, continuing through 2053, and resuming in 2074:
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) |
1.25 | 3.03 | -1.47 | -1.73 | |
| B3.6 |
Progressive indexing (30th percentile) of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2016, continuing through 2065: 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) |
1.33 | 3.50 | -1.39 | -1.27 | |
| B3.7 |
Progressive indexing (30th percentile) of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2016, continuing through 2025, and resuming in 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) |
0.58 | 1.56 | -2.13 | -3.20 | |
| B3.8 |
Beginning with those newly eligible for OASDI benefits in 2020, 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 2053: 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) |
0.92 | 2.37 | -1.80 | -2.40 | |
| B3.9 |
Beginning with those newly eligible for OASDI benefits in 2026,
gradually reduce the 15 percent PIA formula factor in each year so
that it reaches 10 percent for those newly eligible in 2055 and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.08 | 0.23 | -2.64 | -4.53 | |
| B3.10 |
Beginning with those newly eligible for OASDI benefits in 2020,
gradually increase the first PIA bend point in each year so that it
is 15 percent higher for those newly eligible in 2034 and later.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) | memo (Harkin 2012) |
-0.36 | -0.72 | -3.08 | -5.48 | |
| B3.11 |
Increase the first PIA formula factor from 90 percent to 93 percent
for all beneficiaries eligible as of January 2015 and for those
newly eligible for benefits after January 2015.
graph | table | pdf-graph | pdf-table | memo (Larson) |
-0.24 | -0.27 | -2.96 | -5.03 | |
| 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 2014-2018.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.28 | 0.41 | -2.44 | -4.36 | |
| 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 2014-2022.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.46 | 0.69 | -2.26 | -4.08 | |
| 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 2015-2023.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.61 | 0.97 | -2.10 | -3.80 | |
| 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 2031,
and is phased in for new eligibles in 2022 through 2030. 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 | -2.74 | -4.77 | |
| B5.2 |
Beginning in 2014, 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 $1,164 in 2012). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,164/20 = $58.20.
(c) Index the initial PIA per year of coverage by wage growth for
successive cohorts.
graph | table | pdf-graph | pdf-table | memo (Larson) | memo (National Academy of Social Insurance) |
-0.20 | -0.31 | -2.92 | -5.07 | |
| B5.3 |
Beginning in 2014, 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 $1,164 in 2012). For those with under 30 years of coverage, the PIA per year of
coverage over 10 years is $1,164/20 = $58.20. (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) |
-0.27 | -0.40 | -2.99 | -5.17 | |
| B5.4 |
Beginning in 2020, 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 $1,164 in 2012).
For those with under 30 years of coverage, the PIA per year of coverage over 10 years is $1,164/20
= $58.20. (c) From 2012 to the year of implementation, 2020, 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) |
-0.14 | -0.24 | -2.86 | -5.01 | |
| B5.5 |
Beginning in 2015, 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 2012 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) |
-0.09 | -0.15 | -2.81 | -4.92 | |
| B5.6 |
Beginning in 2014, 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 $957.50 in 2013). For those with under 30 years of coverage, the PIA per year of
coverage over 10 years is $957.50/20 = $47.90. (c) From 2013 to the year of implementation, 2014,
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) |
-0.15 | -0.22 | -2.86 | -4.99 | |
| B5.7 |
Beginning for those newly eligible in 2016, increase the special minimum benefit to 100 of
poverty by: (a) The number of years of work (YOWs) is determined as total quarters of coverage
divided by 4, ignoring any fraction. Up to 5 additional years with a child under 6. (b) Set
the PIA for 30+ 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 points per YOW so that at 29 YOWs 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 YOWs.
graph | table | pdf-graph | pdf-table | Moore |
-0.02 | -0.01 | -2.74 | -4.77 | |
| 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 2014 or who reaches their 85th birthday after the beginning of 2014.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.11 | -0.16 | -2.82 | -4.92 | |
| 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 2014 or who reaches their 85th birthday after the beginning
of 2014. 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) |
-0.10 | -0.15 | -2.82 | -4.92 | |
| B6.3 |
Provide an increase in the benefit level of any beneficiary who is
85 or older at the beginning of 2015 or who reaches their 85th
birthday after the beginning of 2015. Increase the beneficiary's
PIA based on an amount equal to the average retired-worker PIA at
the end of 2014, 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) |
-0.13 | -0.19 | -2.85 | -4.96 | |
| B6.4 |
Starting in 2014, 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 | -0.21 | -2.87 | -4.98 | |
| B6.5 |
Starting in 2016, provide a 5 percent uniform PIA increase 20 years after benefit eligibility.
Phase in the PIA increase at 1 percent per year from the 16th through 20th years after eligibility.
The full PIA increase is equal to 5 percent of the PIA of a worker assumed to have career-average
earnings equal to the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Moore) |
-0.23 | -0.31 | -2.95 | -5.08 | |
| B6.6 |
Starting in 2020, provide a uniform PIA increase 23 years after
benefit eligibility. Phase in the PIA increase at 0.5 percent per
year from the 14th through the 23rd years after eligibility. The
full PIA increase is equal to 5 percent of the average retired
worker PIA in December of the 12th year after benefit eligibility.
A similar additional PIA increase applies 42 years after benefit
eligibility (phased in from the 33rd through the 42nd years after
eligibility). Auxiliary beneficiaries receive benefit enhancement
based on PIA of governing worker.
graph | table | pdf-graph | pdf-table | memo(FY 2014 Budget) |
-0.21 | -0.31 | -2.93 | -5.08 | |
| B7.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in 2014 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.37 | 0.51 | -2.35 | -4.25 | |
| B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2014 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.62 | 0.86 | -2.10 | -3.91 | |
| 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 $21,858 in 2012). The credits are available for all past years to newly eligible
retired-worker and disabled-worker beneficiaries starting in 2014. The 5 years are chosen
to yield the largest increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.22 | -0.31 | -2.94 | -5.08 | |
| B7.4 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of 2014 and for
those newly eligible for benefits after the beginning of 2014.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.31 | -0.34 | -3.03 | -5.11 | |
| B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2014 and for
those newly eligible for benefits after the beginning of 2014.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.78 | -0.85 | -3.49 | -5.62 | |
| B7.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of 2014 and
for those newly eligible for benefits after the beginning of 2014.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-3.10 | -3.42 | -5.82 | -8.19 | |
| 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) |
0.28 | 0.42 | -2.44 | -4.35 | |
| Category: Provisions Affecting Retirement Age (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| 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) |
0.34 | 0.74 | -2.38 | -4.03 | |
| 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) |
0.43 | 0.74 | -2.28 | -4.03 | |
| 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) |
0.48 | 1.62 | -2.24 | -3.15 | |
| 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) |
1.01 | 2.31 | -1.71 | -2.46 | |
| C1.5 |
Starting in 2014, 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) |
0.58 | 1.45 | -2.13 | -3.32 | |
| C2.1 |
Increase the earliest eligibility age (EEA) by two months every year for those age 62
starting in 2015 and ending in 2032 (EEA reaches 65 for those age 62 in 2032).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.07 | -0.43 | -2.78 | -5.20 | |
| 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) |
0.52 | 1.54 | -2.20 | -3.23 | |
| 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 2012).
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) |
0.39 | 1.27 | -2.32 | -3.50 | |
| 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) |
0.69 | 1.97 | -2.03 | -2.80 | |
| 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 | 2.97 | -1.32 | -1.80 | |
| 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) |
0.92 | 1.25 | -1.80 | -3.51 | |
| 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) |
0.88 | 1.25 | -1.84 | -3.51 | |
| C2.8 |
Starting in 2016, 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 2016) phased in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.43 | 0.86 | -2.28 | -3.91 | |
| Category: Provisions Affecting Family Member Benefits (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| D1 |
Beginning in 2014, 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(Begich, Murray) | memo (Moore) | memo (National Academy of Social Insurance) |
-0.07 | -0.06 | -2.78 | -4.83 | |
| 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 2014, until the percent reaches 33 in 2030.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
0.12 | 0.18 | -2.60 | -4.59 | |
| D3 |
Allow divorced aged spouses and divorced surviving spouses married 5 to 9 years to get benefits
based on the former spouse's account. Divorced aged and surviving spouses would receive 50% of
the applicable current-law PIA percentage if married 5 years, 60% of the applicable PIA percentage
if married 6 years,...,90% of the applicable PIA percentage if married 9 years. This benefit would
be available to divorced spouses on the rolls at the beginning of 2015 and those becoming eligible
after 2015.
graph | table | pdf-graph | pdf-table | memo(Begich, Murray) |
-0.02 | -0.01 | -2.74 | -4.78 | |
| D4 |
Establish an alternative benefit for a surviving spouse. For the surviving spouse, the alternative
benefit would equal 75 percent of the sum of the survivor's own worker benefit and the deceased
worker's PIA (including any actuarial reductions or delayed retirement credits). If the deceased
worker died before becoming entitled, use the age 62 actuarial reduction if deceased before age 62,
or the applicable actuarial reduction/DRC for entitlement at the age of death if deceased after 62.
The alternative benefit would not exceed the PIA of a hypothetical earner who earns the SSA average
wage index (AWI) every year, and who becomes eligible for retired-worker benefits in the same year
in which the deceased worker became entitled to worker benefits or died (if before entitlement).
The alternative benefit would be paid only if more than the current-law benefit. This benefit would
be available to surviving spouses on the rolls at the beginning of 2015 and those becoming eligible
after 2015.
graph | table | pdf-graph | pdf-table | memo(Begich, Murray) |
-0.11 | -0.12 | -2.83 | -4.88 | |
| Category: Provisions Affecting Payroll Taxes (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent in
2014 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.75 | 2.87 | 0.04 | -1.89 | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.2 percent in
2026-2055, and to 18.0 percent in years 2056 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.93 | 5.44 | 0.21 | 0.67 | |
| E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in 2014 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -3.69 | -5.78 | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1
percentage point each year from 2019-2038, until the rate reaches
14.4 percent in 2038 and later.
graph | table | pdf-graph | pdf-table | memo (Larson) | memo (National Academy of Social Insurance) |
1.42 | 1.99 | -1.30 | -2.78 | |
| E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2016, 12.9
percent in 2024, 13.1 in percent in 2034, 13.9 percent in 2044, 13.5 percent in 2054,
and 13.3 percent in 2064 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.74 | 0.91 | -1.98 | -3.86 | |
| E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2016, 12.9
percent in 2024, 13.3 in percent in 2034, 13.8 percent in 2044, 14.4 percent in 2064,
and 14.5 percent in 2079 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.04 | 2.07 | -1.68 | -2.70 | |
| E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2016, 13.0
percent in 2029, 13.3 in percent in 2044, 14.0 percent in 2064, 14.5 percent in 2074,
and 14.7 percent in 2084 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.85 | 2.25 | -1.87 | -2.52 | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point each year
from 2016-2021, until the rate reaches 13.0 percent for 2021 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.53 | 0.60 | -2.19 | -4.16 | |
| E2.1 |
Eliminate the taxable maximum in years 2014 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) |
2.35 | 2.48 | -0.37 | -2.29 | |
| E2.2 |
Eliminate the taxable maximum in years 2014 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) |
1.91 | 1.61 | -0.81 | -3.15 | |
| E2.3 |
Eliminate the taxable maximum in years 2014 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) |
2.15 | 2.17 | -0.56 | -2.60 | |
| E2.4 |
Eliminate the taxable maximum for years 2020 and later (phased in
2014-2019), 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 2013, using a secondary PIA
formula. This secondary PIA formula uses: (1) an "AIME+" derived
from annual earnings from each year after 2013 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 | 2.36 | -0.54 | -2.40 | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2014, 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 | 2.48 | -0.57 | -2.29 | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum starting in
2014. 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 | -2.11 | -4.13 | |
| E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable maximum starting in
2014. Do not provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Wexler) |
1.19 | 1.25 | -1.53 | -3.51 | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum for years
2016-2063, and a 3 percent rate for years 2064 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 | 0.63 | -2.28 | -4.13 | |
| E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum: 2.0 percent
in 2016, 3.0 percent in 2029, 3.5 percent in 2044, 4.5 percent in 2054, and 5.5 percent
in 2064 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 | 1.14 | -2.02 | -3.62 | |
| E2.10 |
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 5 percent for AIME above this new bend point.
graph | table | pdf-graph | pdf-table | memo (Harkin 2012) |
1.92 | 2.07 | -0.80 | -2.70 | |
| E2.11 |
Eliminate the taxable maximum in years 2019 and later. Phase in elimination by taxing all
earnings above the current law taxable maximum at: 2.48 percent in 2015, 4.96 percent in 2016,
and so on, up to 12.40 percent in 2019. 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) |
2.09 | 2.17 | -0.63 | -2.60 | |
| E2.12 |
Eliminate the taxable maximum in years 2025 and later. Phase in
elimination by taxing all earnings above the current-law taxable
maximum at: 1.24 percent in 2016, 2.48 percent in 2017, and so on,
up to 11.16 percent in 2024. 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 | 2.17 | -0.80 | -2.60 | |
| E2.13 |
Apply OASDI payroll tax rate on earnings above $400,000 starting in
2015, and tax all earnings once the current-law taxable maximum
exceeds $400,000. 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 2 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 (Larson) |
1.83 | 2.35 | -0.89 | -2.42 | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would
be subject to the payroll tax (phased in 2014-2023). Provide
benefit credit for earnings up to the revised taxable maximum
levels.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.77 | 0.64 | -1.95 | -4.13 | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in 2014-2023). Do not provide benefit credit for additional
earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.11 | -1.74 | -3.66 | |
| E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in 2015-2020). Provide benefit credit for earnings up to the
revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.78 | 0.64 | -1.94 | -4.13 | |
| E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed dollars),
phased in 2014-2016. Provide benefit credit for earnings up to the revised taxable
maximum levels.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.11 | 0.08 | -2.61 | -4.69 | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2014
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 | 0.67 | -2.10 | -4.10 | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2016
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) |
0.72 | 1.10 | -1.99 | -3.66 | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in 2015
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 | 0.77 | -2.09 | -3.99 | |
| E3.8 |
Beginning in 2021, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017, with the threshold wage-indexed after 2021. Provide
proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.20 | 0.16 | -2.52 | -4.61 | |
| E3.9 |
Beginning in 2021, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017, with the threshold wage-indexed after 2021. Do not
provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.25 | 0.31 | -2.46 | -4.46 | |
| E3.10 |
Beginning in 2021, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017, with the threshold wage-indexed after 2021. Provide
proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (ncludes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.15 | 0.12 | -2.57 | -4.65 | |
| E3.11 |
Beginning in 2021, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017, with the threshold wage-indexed after 2021. Do not
provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.19 | 0.23 | -2.53 | -4.54 | |
| E3.12 |
Beginning in 2021, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017, with the threshold wage-indexed after 2021. Provide
proportional benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.12 | 0.10 | -2.60 | -4.67 | |
| E3.13 |
Beginning in 2021, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017, with the threshold wage-indexed after 2021. Do not
provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.16 | 0.19 | -2.56 | -4.58 | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent) beginning
in 2014. For the employee payroll tax (6.2 percent) and for benefit calculation
purposes, beginning in 2014, 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) |
1.43 | 1.39 | -1.29 | -3.38 | |
| E3.15 |
Increase the taxable maximum until taxable earnings equal 90 percent of covered earnings
(phased in 2014-2023). In addition, apply a tax rate of 6.2 percent for earnings above
the revised taxable maximum (phased in from 2014-2023). 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 | 1.35 | -1.32 | -3.42 | |
| E3.16 |
Beginning in 2015, apply 4 percent payroll tax rate on earnings above $400,000 in 2015, with
the threshold wage-indexed after 2015. Provide benefit credit for additional earnings taxed,
using a secondary PIA formula. This secondary PIA formula involves: (1) an "AIME+" derived from
annual earnings taxed only between $400,000 and $500,000 (with thresholds wage-indexed after 2015);
and (2) a formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo(Begich, Murray) |
0.32 | 0.34 | -2.40 | -4.42 | |
| Category: Provisions Affecting Coverage of Employment (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| F1 |
Starting in 2014, 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) |
0.15 | -0.17 | -2.56 | -4.94 | |
| F2 |
Starting in 2014, exempt individuals with more than 180 quarters of coverage
from the OASDI payroll tax.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.29 | -0.45 | -3.01 | -5.21 | |
| 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) |
1.01 | 0.87 | -1.71 | -3.90 | |
| F4 |
Expand covered earnings to include contributions to voluntary salary reduction plans
(such as Cafeteria 125 plans and Flexible Spending Accounts). Starting in 2014, 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 | 0.12 | -2.50 | -4.64 | |
| F5 |
Tax Reform for Business: Establish a value added tax of 3.0 percent for 2015 and
6.5 percent for 2016 and later. Starting in 2015, reduce the corporate income tax rate
from 35 to 27 percent.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
-0.02 | 0.18 | -2.73 | -4.59 | |
| Category: Provisions Affecting Trust Fund Investment in Equities (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| G1 |
Invest 40 percent of the Trust Funds in equities (phased in 2014-2028),
assuming an ultimate 6.4 percent real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.60 | 0.00 | -2.12 | -4.77 | |
| G2 |
Invest 40 percent of the Trust Funds in equities (phased in 2014-2028),
assuming an ultimate 5.4 percent real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.44 | 0.00 | -2.28 | -4.77 | |
| G3 |
Invest 40 percent of the Trust Funds in equities (phased in 2014-2028),
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 | -2.72 | -4.77 | |
| G4 |
Invest 15 percent of the Trust Fund in equities (phased in 2014-2023), assuming
an ultimate 6.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.25 | 0.00 | -2.47 | -4.77 | |
| G5 |
Invest 15 percent of the Trust Funds in equities (phased in
2014-2023), 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 | -2.72 | -4.77 | |
| G6 |
Invest up to 25 percent of OASDI Trust Fund reserves in equities
(phased in 2016-2025), assuming an ultimate 6.4 percent real rate of
return on equities.
graph | table | pdf-graph | pdf-table | memo (Larson) |
0.38 | 0.00 | -2.33 | -4.77 | |
| G7 |
Invest up to 25 percent of OASDI Trust Fund reserves in equities
(phased in 2016-2025), 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 (Larson) |
0.00 | 0.00 | -2.72 | -4.77 | |
| Category: Provisions Affecting Taxation of Benefits (2013 Trustees Report intermediate assumptions) | ||||||
| Present Law, Alternative II. |
-2.72 | -4.77 | ||||
| H1 |
Starting in 2014, tax Social Security benefits in a manner similar to private
pension income. Phase out the lower-income thresholds during 2014-2023.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.21 | 0.14 | -2.51 | -4.62 | |
| H2 |
Starting in 2014, tax Social Security benefits in a manner similar to private pension
income. Phase out the lower-income thresholds during 2014-2033.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.19 | 0.14 | -2.53 | -4.62 | |
| H3 |
Tax Reform for Individuals: Starting in 2015, 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) |
0.06 | 0.04 | -2.66 | -4.73 | |
| H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for
single filers and $100,000 for joint filers starting in 2015.
Taxation of benefits revenues transferred to the Hospital Insurance
(HI) Trust Fund would be the same as if the current-law computation
applied.
graph | table | pdf-graph | pdf-table | memo (Larson) |
-0.12 | -0.01 | -2.84 | -4.78 | |
 |
Privacy Policy
| Website Policies
& Other Important Information
| Site Map Last reviewed or modified July 7, 2014 |