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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 2015 Trustees Report
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| Description of proposed provisions | Change from present law [percent of payroll] |
Shortfall eliminated | ||||
|---|---|---|---|---|---|---|
| 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 (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| A1 |
Starting December 2016, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.73 | 2.35 | 65% | 51% | |
| A2 |
Starting December 2016, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.90 | 1.23 | 34% | 27% | |
| A3 |
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.
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 | 0.76 | 21% | 16% | |
| A4 |
Starting December 2018, 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) |
0.41 | 0.56 | 15% | 12% | |
| A5 |
Starting December 2016, 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 | -3% | -2% | |
| A6 |
Starting December 2017, 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 (Schatz) | memo (Deutch 2015) | memo (DeFazio 2015) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch 2010) |
-0.38 | -0.53 | -14% | -11% | |
| A7 |
Starting December 2016, 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
unused reduction into future years.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
1.63 | 2.22 | 61% | 48% | |
| Category: Provisions Affecting Level of Monthly Benefits (PIA) (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI benefits
in 2022: Reduce 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) |
2.64 | 7.77 | 98% | 167% | |
| B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASDI 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 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) |
1.45 | 4.29 | 54% | 92% | |
| B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with individuals
newly eligible for OASDI benefits in 2022: 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 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 | 3.59 | 45% | 77% | |
| B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with individuals
newly eligible for OASDI benefits in 2022: 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 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) |
0.97 | 2.70 | 36% | 58% | |
| B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with individuals
newly eligible for OASDI benefits in 2022: 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 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) |
0.69 | 1.71 | 26% | 37% | |
| B1.6 (2019) |
Progressive price indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASI 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 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. 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 (Bennett) |
1.49 | 4.01 | 55% | 86% | |
| B1.6 (2024) |
Progressive price indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASI benefits in 2024: 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 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. 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) |
1.13 | 3.63 | 42% | 78% | |
| B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals newly eligible
for OASI benefits in 2023 through 2060: 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 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) |
0.95 | 2.55 | 35% | 55% | |
| B1.8 |
Progressive price indexing (50th percentile) of PIA factors for individuals newly eligible
for OASI benefits in 2020 through 2059: 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 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) |
0.95 | 2.30 | 35% | 49% | |
| B2.1 |
Beginning with those newly eligible for OASI benefits in 2025, multiply the PIA factors by the
ratio of life expectancy at 67 for 2020 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) |
0.51 | 1.69 | 19% | 36% | |
| B3.1 |
Beginning with those newly eligible for OASDI benefits in 2016, multiply the 32 and 15
percent PIA factors each year by 0.987. Stop reductions after 2046, when the factors
reach 21 percent and 10 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.51 | 2.99 | 56% | 64% | |
| B3.2 |
Beginning with those newly eligible for OASI benefits in 2023, multiply the 90 and 32
percent PIA factors each year by 0.9925 and 0.982, respectively. Stop reductions after
2060. Beginning with those newly eligible for OASI benefits in 2018, multiply the 15
factor by 0.982. Stop reduction of the 15 factor after 2055. 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. Child beneficiaries and spouses with a child in care under the OASI
program are not affected by this proposal.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
1.98 | 5.31 | 74% | 114% | |
| B3.3 |
Beginning with those newly eligible for OASDI benefits in 2016, 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) |
0.21 | 0.29 | 8% | 6% | |
| B3.4 |
Beginning with those newly eligible for OASDI benefits in 2019, multiply all PIA factors
each year by 0.991. Stop reductions after 2047. 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) |
1.47 | 3.17 | 55% | 68% | |
| B3.5 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly
eligible for OASI benefits in 2018, continuing through 2055, and resuming in 2076: 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 factors above the 30th percentile such that the initial benefit for a worker with
AIME equal to the taxable maximum is reduced by 1.17 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) |
1.26 | 3.06 | 47% | 66% | |
| B3.6 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly eligible
for OASI benefits in 2018, continuing through 2067: 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 factors above the 30th percentile such that
the initial benefit for a worker with AIME equal to the taxable maximum is reduced by 1.17 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) |
1.34 | 3.52 | 50% | 76% | |
| B3.7 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly eligible for
OASI benefits in 2018, continuing through 2027, and resuming in 2066: 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 factors above the 30th
percentile such that the initial benefit for a worker with AIME equal to the taxable maximum is reduced
by 1.17 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) |
0.59 | 1.58 | 22% | 34% | |
| B3.8 |
Beginning with those newly eligible for OASDI benefits in 2022, create a new bend point at the
50th percentile of the AIME distribution of newly retired workers and gradually reduce all PIA
factors except for the 90 percent factor. By 2055: a) the 32 percent PIA 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 PIA factor reduces to 5 percent.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.89 | 2.29 | 33% | 49% | |
| B3.9 |
Beginning with those newly eligible for OASDI benefits in 2028, gradually reduce the 15
percent PIA factor in each year so that it reaches 10 percent for those newly eligible
in 2057 and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.07 | 0.22 | 3% | 5% | |
| B3.10 |
Beginning with those newly eligible for OASDI benefits in 2022, gradually increase the
first PIA bend point in each year so that it is 15 percent higher for those newly
eligible in 2036 and later.
graph | table | pdf-graph | pdf-table | memo (Schatz) | memo (Sanders 2015) | memo (Harkin 2013) | memo (Harkin 2012) |
-0.36 | -0.71 | -14% | -15% | |
| B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all beneficiaries eligible
as of January 2017 and for those newly eligible for benefits after 2017.
graph | table | pdf-graph | pdf-table | memo (Larson 2015) | memo (Larson 2014) |
-0.24 | -0.27 | -9% | -6% | |
| 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 2016-2020.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.28 | 0.40 | 11% | 9% | |
| 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 2016-2024.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.45 | 0.68 | 17% | 15% | |
| 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 2017-2025.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.61 | 0.96 | 23% | 21% | |
| 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 2033, and is phased in for new eligibles
in 2024 through 2032. 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 | -1% | 0% | |
| B5.2 |
Beginning for those newly eligible in 2016, 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 $1,216 in 2014). For those with under 30 years of
coverage, the PIA per year of coverage over 10 years is $1,216/20 = $60.80. (c) Index
the initial PIA per year of coverage by wage growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (National Academy of Social Insurance) |
-0.18 | -0.27 | -7% | -6% | |
| B5.3 |
Beginning for those newly eligible in 2016, 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 $1,216
in 2014). For those with under 30 years of coverage, the PIA per year of coverage over
10 years is $1,216/20 = $60.80. (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) |
-0.25 | -0.37 | -10% | -8% | |
| B5.4 |
Beginning for those newly eligible in 2022, 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 $1,216 in 2014). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,216/20 = $60.80. (c) From 2014 to the
year of implementation, 2022, 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 | -0.23 | -5% | -5% | |
| B5.5 |
Beginning for those newly eligible in 2017, 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 Census monthly poverty
level (about $1,258 in 2014). For those with under 30 years of coverage, the PIA per
year of coverage over 19 years is $1,258/11 = $114.40. (c) Index the initial 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 (Bipartisan Policy Center) |
-0.08 | -0.13 | -3% | -3% | |
| B5.6 |
Beginning for those newly eligible in 2016, 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 $980.80
in 2015). For those with under 30 years of coverage, the PIA per year of coverage
over 10 years is $980.80/20 = $49.04. (c) From 2015 to the year of implementation,
2016, 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) |
-0.11 | -0.17 | -4% | -4% | |
| B5.7 |
Beginning for those newly eligible in 2018, 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 | memo (Moore) |
-0.02 | -0.00 | -1% | 0% | |
| 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 2016 or who reaches their 85th birthday after the
beginning of 2016.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.11 | -0.16 | -4% | -3% | |
| 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 2016 or who reaches their 85th birthday after the
beginning of 2016. 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 | -0.16 | -4% | -3% | |
| B6.3 |
Provide an increase in the benefit level of any beneficiary who is 85 or older at the
beginning of 2017 or who reaches their 85th birthday after the beginning of 2017.
Increase the beneficiary's PIA based on an amount equal to the average retired-worker
PIA at the end of 2016, 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 2017 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 | -5% | -4% | |
| B6.4 |
Starting in 2016, 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 | -6% | -5% | |
| B6.5 |
Starting in 2018, 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 | -9% | -7% | |
| B6.6 |
Starting in 2022, 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 | -8% | -7% | |
| B7.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in 2016 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.37 | 0.51 | 14% | 11% | |
| B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2016 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.61 | 0.85 | 23% | 18% | |
| 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 $23,145 in 2014). The credits are available for all past years to newly eligible
retired-worker and disabled-worker beneficiaries starting in 2016. The 5 years are
chosen to yield the largest increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.23 | -0.32 | -8% | -7% | |
| B7.4 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of 2016 and
for those newly eligible for benefits after the beginning of 2016.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.31 | -0.34 | -12% | -7% | |
| B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2016 and
for those newly eligible for benefits after the beginning of 2016.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.77 | -0.85 | -29% | -18% | |
| B7.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of 2016 and
for those newly eligible for benefits after the beginning of 2016.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-3.08 | -3.40 | -115% | -73% | |
| 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) |
0.27 | 0.38 | 10% | 8% | |
| Category: Provisions Affecting Retirement Age (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| 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 | 0.71 | 13% | 15% | |
| C1.2 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA 2 months per year until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.43 | 0.71 | 16% | 15% | |
| 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 | 1.55 | 18% | 33% | |
| 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 | 2.21 | 38% | 48% | |
| C1.5 |
Starting in 2016, 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 normal retirement age (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) |
0.66 | 1.27 | 25% | 27% | |
| C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for those
age 62 starting in 2017 and ending in 2034 (EEA reaches 65 for those age 62
in 2034).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.06 | -0.43 | -2% | -9% | |
| 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 | 1.45 | 18% | 31% | |
| 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 2014). 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 | 1.22 | 15% | 26% | |
| 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 70 and 65 respectively. For each
year, the computed NRA and EEA round down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis) |
0.69 | 1.79 | 26% | 39% | |
| 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) |
1.39 | 2.78 | 52% | 60% | |
| 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) |
0.88 | 1.18 | 33% | 25% | |
| 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) |
0.84 | 1.18 | 32% | 25% | |
| C2.8 |
Starting in 2018, 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 about 26.67 percent for those age 62 in 2018) phased in
over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.44 | 0.85 | 16% | 18% | |
| Category: Provisions Affecting Family Member Benefits (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| D1 |
Beginning in 2016, 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) |
-0.06 | -0.06 | -2% | -1% | |
| 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 2016, until the percent reaches 33 in 2032.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
0.12 | 0.19 | 5% | 4% | |
| 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 2017 and those becoming eligible
after 2017.
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
-0.02 | -0.01 | -1% | 0% | |
| 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 2017 and those becoming
eligible after 2017.
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
-0.11 | -0.11 | -4% | -2% | |
| Category: Provisions Affecting Payroll Taxes (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.3 percent in 2016 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.76 | 2.87 | 103% | 62% | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.2 percent in
2028-2057, and to 18.0 percent in years 2058 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.95 | 5.43 | 110% | 117% | |
| E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in 2016 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -36% | -22% | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2021-2040, until the rate reaches 14.4 percent in
2040 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance) |
1.43 | 1.99 | 53% | 43% | |
| E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2018,
12.9 percent in 2026, 13.1 in percent in 2036, 13.9 percent in 2046, 13.5 percent
in 2056, and 13.3 percent in 2066 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.75 | 0.91 | 28% | 20% | |
| E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2018,
12.9 percent in 2026, 13.3 in percent in 2036, 13.8 percent in 2046, 14.4 percent
in 2066, and 14.5 percent in 2081 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.05 | 2.07 | 39% | 44% | |
| E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2018,
13.0 percent in 2031, 13.3 in percent in 2046, 14.0 percent in 2066, 14.5 percent
in 2076, and 14.7 percent in 2086 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.85 | 2.25 | 32% | 48% | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2018-2023, until the rate reaches 13.0 percent for 2023 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.54 | 0.60 | 20% | 13% | |
| E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2019-2042, until the rate reaches 14.8 percent in 2042. Then
increase the payroll tax rate an additional 0.1 percentage point in each year
from 2081-2085, until the rate reaches 15.3 percent for 2085 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2015) |
1.74 | 2.85 | 65% | 61% | |
| E2.1 |
Eliminate the taxable maximum in years 2016 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 (DeFazio 2015) | memo (Social Security Advisory Board) |
2.36 | 2.47 | 88% | 53% | |
| E2.2 |
Eliminate the taxable maximum in years 2016 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 | 1.60 | 71% | 34% | |
| E2.3 |
Eliminate the taxable maximum in years 2016 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 | 2.15 | 81% | 46% | |
| E2.4 |
Eliminate the taxable maximum for years 2022 and later (phased in 2016-2021),
and apply full 12.4 percent payroll tax rate to all earnings. Provide benefit
credit for earnings above the current-law taxable maximum that are subject to
the payroll tax, using a secondary PIA formula. This secondary PIA formula
involves: (1) an "AIME+" derived from annual earnings from each year after 2015
that were in excess of that year's current-law taxable maximum; (2) a new bend
point equal to 134 percent of the monthly current-law taxable maximum; and (3)
formula factors of 3 percent and 0.25 percent below and above the new bend point,
respectively.
graph | table | pdf-graph | pdf-table | memo (Deutch 2015) | memo (Deutch 2010) |
2.18 | 2.34 | 81% | 50% | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2016,
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 2015) | memo (Sanders 2013) | memo (DeFazio 2011) |
2.18 | 2.46 | 81% | 53% | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum
starting in 2016. 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 | 23% | 14% | |
| E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable maximum
starting in 2016. 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 | 44% | 27% | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum
for years 2018-2065, and a 3 percent rate for years 2066 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 | 16% | 14% | |
| E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum: 2.0
percent in 2018, 3.0 percent in 2031, 3.5 percent in 2046, 4.5 percent in 2056,
and 5.5 percent in 2066 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 | 26% | 24% | |
| E2.10 |
Eliminate the taxable maximum in years 2026 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in
2017, 2.48 percent in 2018, and so on, up to 11.16 percent in 2025. 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 | 2.05 | 72% | 44% | |
| E2.11 |
Eliminate the taxable maximum in years 2021 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 2.48 percent in 2017,
4.96 percent in 2018, and so on, up to 12.40 percent in 2021. Provide benefit credit
for earnings above the current-law taxable maximum that are subject to the payroll
tax, using a secondary PIA formula. This secondary PIA formula involves: (1) an
"AIME+" derived from annual earnings from each year after 2016 that were in excess
of that year's current-law taxable maximum; and (2) a formula factor of 5 percent
on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Schatz) | memo (Harkin 2013) |
2.09 | 2.16 | 78% | 46% | |
| E2.12 |
Eliminate the taxable maximum in years 2027 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in
2018, 2.48 percent in 2019, and so on, up to 11.16 percent in 2026. Provide
benefit credit for earnings above the current-law taxable maximum. Create a new
bend point at the current-law taxable maximum with a 3 percent formula factor
applying above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Moore) |
1.92 | 2.15 | 72% | 46% | |
| E2.13 |
Apply OASDI payroll tax rate on earnings above $400,000 starting in 2017, and tax
all earnings once the current-law taxable maximum exceeds $400,000. Provide benefit
credit for earnings above the current-law taxable maximum that are subject to the
payroll tax, using a secondary PIA formula. This secondary PIA formula involves:
(1) an "AIME+" derived from annual earnings from each year after 2016 that were in
excess of that year's current-law taxable maximum; and (2) a formula factor of 2
percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Larson 2015) | memo (Larson 2014) |
1.86 | 2.34 | 69% | 50% | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in 2016-2025). Provide benefit credit for earnings up to
the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.77 | 0.63 | 29% | 14% | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2016-2025). Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.10 | 37% | 24% | |
| E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2017-2022). Provide benefit credit for earnings
up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.79 | 0.63 | 29% | 14% | |
| E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed dollars),
phased in 2016-2018. Provide benefit credit for earnings up to the revised taxable
maximum.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.12 | 0.08 | 4% | 2% | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2016
until taxable earnings equal 90 percent of covered earnings. Provide benefit credit
for earnings up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) | memo (National Academy of Social Insurance) |
0.62 | 0.66 | 23% | 14% | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2018
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 | 1.10 | 27% | 24% | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in 2017
until taxable earnings equal 90 percent of covered earnings. Provide benefit credit
for earnings up to the revised taxable maximum. 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 | 24% | 16% | |
| E3.8 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2023. Provide proportional benefit credit for additional earnings
taxed, based on the payroll tax rate applied to the additional earnings
divided by the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.19 | 0.16 | 7% | 3% | |
| E3.9 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2023. 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 | 0.30 | 9% | 6% | |
| E3.10 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2023. Provide proportional benefit credit for additional earnings
taxed, based on the payroll tax rate applied to the additional earnings
divided by the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.14 | 0.12 | 5% | 2% | |
| E3.11 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2023. 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 | 0.22 | 7% | 5% | |
| E3.12 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2023. Provide proportional benefit credit for additional earnings taxed,
based on the payroll tax rate applied to the additional earnings divided by
the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.12 | 0.09 | 4% | 2% | |
| E3.13 |
Beginning in 2023, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2023. 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) |
0.15 | 0.18 | 6% | 4% | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2016. For the employee payroll tax (6.2 percent) and for
benefit credit purposes, beginning in 2016, 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 | 1.38 | 54% | 30% | |
| E3.15 |
Increase the taxable maximum such that 90 percent of earnings are
subject to the payroll tax (phased in 2016-2025). In addition, apply
a tax rate of 6.2 percent for earnings above the revised taxable
maximum (phased in from 2016-2025). Provide benefit credit for earnings
taxed up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.40 | 1.34 | 52% | 29% | |
| E3.16 |
Beginning in 2017, apply 4 percent payroll tax rate on earnings above the
wage-indexed equivalent of $400,000 in 2015, with the threshold wage-indexed
after 2017. 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 2015 wage-indexed equivalents
of $400,000 and $500,000 (with thresholds wage-indexed after 2017); 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 | 12% | 7% | |
| Category: Provisions Affecting Coverage of Employment (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| F1 |
Starting in 2016, 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 | -0.16 | 6% | -4% | |
| F2 |
Starting in 2016, exempt individuals with more than 180 quarters of coverage
from the OASDI payroll tax. Earnings exempted from OASDI payroll tax would
not be used in computing benefits.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.38 | -0.61 | -14% | -13% | |
| 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) |
0.98 | 0.69 | 37% | 15% | |
| F4 |
Expand covered earnings to include contributions to voluntary salary reduction
plans (such as Cafeteria 125 plans and Flexible Spending Accounts). Starting in
2016, 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) |
0.27 | 0.18 | 10% | 4% | |
| F5 |
Tax Reform for Business: Establish a value added tax of 3.0 percent for
2017 and 6.5 percent for 2018 and later. Starting in 2017, 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 | -1% | 4% | |
| F6 |
Apply a 6.2 percent tax on investment income as defined in the Affordable Care Act
(ACA), with unindexed thresholds as in the ACA ($200,000 for single filer, $250,000
for married filing jointly), starting in 2017. Proceeds go to the OASDI Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Sanders 2015) |
0.93 | 1.16 | 34% | 25% | |
| Category: Provisions Affecting Trust Fund Investment in Equities (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| G1 |
Invest 40 percent of the OASDI Trust Fund in equities (phased in 2016-2030),
assuming an ultimate 6.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.57* | 0.00 | * | 0% | |
| G2 |
Invest 40 percent of the OASDI Trust Fund in equities (phased in 2016-2030),
assuming an ultimate 5.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.42* | 0.00 | * | 0% | |
| G3 |
Invest 40 percent of the OASDI Trust Fund in equities (phased in 2016-2030),
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 (Social Security Advisory Board) |
0.00* | 0.00 | * | 0% | |
| G4 |
Invest 15 percent of the OASDI Trust Fund in equities (phased in 2016-2025),
assuming an ultimate 6.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.23* | 0.00 | * | 0% | |
| G5 |
Invest 15 percent of the OASDI Trust Fund 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 (AARP) |
0.00* | 0.00 | * | 0% | |
| G6 |
Invest 25 percent of the OASDI Trust Fund in equities (phased in 2018-2027),
assuming an ultimate 6.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.36* | 0.00 | * | 0% | |
| G7 |
Invest 25 percent of the OASDI Trust Fund in equities (phased in 2018-2027),
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 2014) |
0.00* | 0.00 | * | 0% | |
| * A change in the investment of trust fund reserves to include some equities affects the size of all summarized measures because increased "present-value" discounting reduces the weight on values for more distant future years. As a result, the magnitude of the present-law actuarial balance and the summarized effects of most proposals is reduced. Therefore, the size of the change in the long-range actuarial balance indicated here cannot be interpreted directly as a reduction in the shortfall. The actual reduction in the shortfall from equity investment depends on the amount of reserves that are available for investment throughout the period. For example, if provisions to change revenue or scheduled benefits resulted in a purely pay-as-you-go system (reserves just above zero throughout the period), then investment in equities would have no effect on the actuarial balance. | ||||||
| Category: Provisions Affecting Taxation of Benefits (2015 Trustees Report intermediate assumptions) | ||||||
| Present law shortfall in long-range actuarial balance is 2.68 percent of payroll and in annual balance for the 75th year is 4.65 percent of payroll. | ||||||
| H1 |
Starting in 2016, tax Social Security benefits in a manner similar to
private pension income. Phase out the lower-income thresholds during
2016-2025.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.21 | 0.15 | 8% | 3% | |
| H2 |
Starting in 2016, tax Social Security benefits in a manner similar to private
pension income. Phase out the lower-income thresholds during 2016-2035.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.19 | 0.15 | 7% | 3% | |
| H3 |
Tax Reform for Individuals: Starting in 2017, 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 7.5 percent, with 60 percent of this revenue
going to OASDI and 40 percent going to HI.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.01 | -0.03 | 0% | -1% | |
| H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for single
filers and $100,000 for joint filers starting in 2017. 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 2015) | memo (Larson 2014) |
-0.12 | -0.01 | -4% | 0% | |
 |
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