Summary of Provisions That Would Change the Social Security Program
Estimates based on the intermediate assumptions of
the 2020 Trustees Report
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| Description of proposed provisions |
Change from current 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 (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| A1 |
Starting December 2021, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.90 | 2.47 | 59% | 55% | |
| A2 |
Starting December 2021, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.99 | 1.30 | 31% | 29% | |
| A3 |
Starting December 2021, 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 (Ribble) | memo (FY 2014 Budget) | memo (Chaffetz) | memo (Becerra) | memo (Fiscal Commission) | memo (Bipartisan Policy Center 2010) | memo (Social Security Advisory Board) |
0.61 | 0.79 | 19% | 18% | |
| A4 |
Starting December 2023, 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) |
0.47 | 0.62 | 15% | 14% | |
| A5 |
Starting December 2021, 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) |
-0.10 | -0.12 | -3% | -3% | |
| A6 |
Starting December 2022, 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, Blumenthal, Van Hollen September 2019) | memo (Deutch, Hirono 2019) | memo (Sanders, DeFazio 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Deutch, Hirono) | memo (Lawson) | memo (Larson 2017) | memo (Sanders, DeFazio) | memo (Sanchez) | memo (Sanders 2016) | 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) |
-0.41 | -0.56 | -13% | -12% | |
| A7 |
Starting December 2021, 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) |
1.79 | 2.33 | 56% | 52% | |
| A8 |
Starting December 2021, for OASI beneficiaries only (DI beneficiaries would only be
affected when their benefit converts to OASI at NRA), the annual COLA would be based
on the chain-weighted version of the CPI-U.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.52 | 0.68 | 16% | 15% | |
| A9 |
For single/head-of-household/married-filing-separate taxpayers with modified adjusted
gross income (MAGI) below $92,750 and for joint filers with MAGI below $185,500 for December
2022 ($85,000 and $170,000 multiplied by estimated CPI-U for 2018-2022), use the chain-weighted
version of the Consumer Price Index for All Urban Consumers (C-CPI-U) to calculate the
cost-of-living adjustment (COLA), beginning with the December 2022 COLA. For those
beneficiaries whose MAGI is above these thresholds, provide no COLA. Use prior tax
year income data for this determination. Index the eligibility income threshold amounts
to the CPI-U after December 2022.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.37 | 2.38 | 43% | 53% | |
| Category: Provisions Affecting Level of Monthly Benefits (PIA) (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| B1.1 |
Price indexing of PIA factors beginning with those newly eligible for
OASDI benefits in 2027: 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) |
2.75 | 7.44 | 86% | 165% | |
| B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: 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) |
1.52 | 4.14 | 47% | 92% | |
| B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: 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) |
1.30 | 3.54 | 41% | 78% | |
| B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: 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) |
1.08 | 2.81 | 34% | 62% | |
| B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2027: 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) |
0.82 | 1.92 | 25% | 42% | |
| 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. 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) |
1.50 | 3.85 | 47% | 85% | |
| B1.6 (2029) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2029: 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) |
1.23 | 3.55 | 38% | 79% | |
| B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2028 through 2065: 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) |
1.03 | 2.53 | 32% | 56% | |
| B1.8 |
Progressive price indexing (50th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2025 through 2064: 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) |
1.01 | 2.30 | 31% | 51% | |
| B2.1 |
Beginning with those newly eligible for OASI benefits in 2030, multiply
the PIA factors by the ratio of life expectancy at 67 for 2025 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 2010) | memo (Bennett) |
0.57 | 1.73 | 18% | 38% | |
| B3.8 |
Beginning with those newly eligible for OASDI benefits in 2027, 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 2060: 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) |
1.01 | 2.38 | 31% | 53% | |
| B3.9 |
Beginning with those newly eligible for OASDI benefits in 2033, gradually
reduce the 15 percent PIA factor in each year so that it reaches 10 percent
for those newly eligible in 2062 and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.10 | 0.26 | 3% | 6% | |
| B3.10 |
Beginning with those newly eligible for OASDI benefits in 2027, gradually
increase the first PIA bend point in each year so that it is 15 percent
higher for those newly eligible in 2041 and later.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio 2019) | memo (Sanders, DeFazio 2017) | memo (Sanchez) | memo (Sanders 2016) | memo (Schatz) | memo (Sanders 2015) | memo (Harkin 2013) | memo (Harkin 2012) |
-0.38 | -0.70 | -12% | -16% | |
| B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all
beneficiaries eligible as of January 2022 and for those newly eligible
for benefits after 2021.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) | memo (Larson 2015) | memo (Larson 2014) |
-0.24 | -0.26 | -8% | -6% | |
| B3.12 |
Use an annualized "mini-PIA" formula beginning with retired workers
newly eligible in 2027. For each indexed earnings year, compute an
individual AIME and an individual PIA. Sum these individual PIAs for
the 40 highest years of indexed earnings and divide that total amount
by 37 to get the PIA for this provision. Phase-in over five years,
meaning that in 2027, 80 percent of the benefit would be based on the
old 35-year average PIA formula and 20 percent on the new mini-PIA
formula, shifting by 20 percentage points each year until 100 percent
is based on the new mini-PIA formula for those attaining age 62 in 2031.
Disabled worker benefits are unchanged under this provision.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.25 | 0.38 | 8% | 9% | |
| B3.13 |
For retired worker beneficiaries newly eligible in 2027 (excluding disabled
workers), add a new bend point at the wage-indexed equivalent of the 50th percentile
of the AIME distribution minus $100 (for 2015 eligibility) and change the PIA
factors to 95/32/15/5. Also move the current-law first bend point from the
wage-indexed equivalent of $960 in 2020 to $1,220 in 2020. Phase this provision
in over 10 years (2027-2036). The phase-in would work on a weighted-average
basis: 90% of CL formula + 10% of proposal formula for 2027, 80% of CL formula
+ 20% of proposal formula for 2028, and so on.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.10 | 0.20 | 3% | 4% | |
| B3.14 |
Beginning with those newly eligible for OASDI benefits in 2022, reduce
the 15 percent PIA factor by 2 percentage points per year so that it reaches
5 percent for those newly eligible in 2026 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.36 | 0.53 | 11% | 12% | |
| B3.15 |
Increase the 90 percent PIA formula factor to 91 percent for beneficiaries
newly eligible in 2025, 92 percent for those newly eligible in 2026, ...,
reaching 95 percent for those newly eligible in 2029 and later.
graph | table | pdf-graph | pdf-table | memo (Sanchez) |
-0.28 | -0.44 | -9% | -10% | |
| B3.16 |
For retired worker and disabled worker beneficiaries becoming initially
eligible in January 2027 or later, phase in a new benefit formula (from
2027 to 2036). Replace the existing two primary insurance amount (PIA)
bend points with three new bend points as follows: (1) 25% AWI/12 from
2 years prior to initial eligibility; (2) 100% AWI/12 from 2 years prior
to initial eligibility; and (3) 125% AWI/12 from 2 years prior to initial
eligibility. The new PIA factors are 95%, 27.5%, 5% and 2%. During the
phase in, those becoming newly eligible for benefits will receive an increasing
portion of their benefits based on the new formula, reaching 100% of the
new formula in 2036.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.98 | 1.71 | 30% | 38% | |
| 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 2021-2025.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.28 | 0.38 | 9% | 8% | |
| 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 2021-2029.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.45 | 0.64 | 14% | 14% | |
| 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 2022-2030.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.60 | 0.90 | 19% | 20% | |
| B4.4 |
Reduce the number of computation years (increase dropout years) for
parents having a child in care under the age of 6. The parent must
have no earnings (covered or non-covered) for the year to be eligible
for the credit. Only one parent can claim the childcare added dropout
year for a given earnings year. Each parent can earn at most 2 dropout
years per child, and a maximum of 5 dropout years in total. The years
designated as childcare years do not have to be the years that could
otherwise be included in the computation of the average indexed monthly
earnings (AIME). The provision would be effective for all benefits
payable for entitlement in January 2022 and later (without regard for
when the beneficiary became initially eligible).
graph | table | pdf-graph | pdf-table | memo (Murphy) |
-0.05 | -0.06 | -2% | -1% | |
| B4.5 |
For retired and disabled workers, reduce the maximum number of dropout
years to 4 for workers newly eligible in 2022, to 3 for workers newly
eligible in 2023, and to 2 for workers newly eligible in 2024 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.37 | 0.51 | 11% | 11% | |
| 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 2038, and is phased
in for new eligibles in 2029 through 2037. 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) |
-0.01 | -0.00 | -0% | -0% | |
| B5.2 |
Beginning for those newly eligible in 2021, 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 $1,301 in 2019). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,301/20 = $65.05. (c)
Index the initial PIA per year of coverage by wage growth for successive
cohorts.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Sanders, DeFazio 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Lawson) | memo (Larson 2017) | memo (Sanders, DeFazio 2017) | memo (Sanders 2016) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (National Academy of Social Insurance) |
-0.16 | -0.23 | -5% | -5% | |
| B5.3 |
Beginning for those newly eligible in 2021, 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 $1,301 in 2019). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,301/20 = $65.05.
(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) |
-0.24 | -0.34 | -8% | -8% | |
| B5.4 |
Beginning for those newly eligible in 2027, 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 $1,301 in 2019). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,301/20 = $65.05. (c)
From 2019 to the year of implementation, 2027, 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) |
-0.12 | -0.19 | -4% | -4% | |
| B5.5 |
Beginning for those newly eligible in 2022, 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 $1,359 in 2019). For those with under 30 years
of coverage, the PIA per year of coverage over 19 years is $1,359/11
= $123.50. (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 2010) |
-0.04 | -0.06 | -1% | -1% | |
| B5.6 |
Beginning for those newly eligible in 2021, 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 $1,063 in 2020). For those with under 30 years of coverage, the
PIA per year of coverage over 10 years is $1,063/20 = $53.15. (c) From
2020 to the year of implementation, 2021, 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) |
-0.10 | -0.14 | -3% | -3% | |
| B5.7 |
Beginning for those newly eligible in 2023, reconfigure the special
minimum benefit: (a) The number of years of work (YOWs) is determined
as total quarters of coverage divided by 4, ignoring any fraction.
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+ 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 2013) |
-0.03 | -0.01 | -1% | -0% | |
| B5.8 |
Beginning in 2025, create a Basic Minimum Benefit (BMB) within Social Security
(i.e., the cost of the BMB would be charged as a cost to the OASI Trust Fund),
with the following specifications: (1) Eligibility for the BMB would be limited
to OASI beneficiaries who have attained normal retirement age (NRA) or above.
OASI beneficiaries under NRA would not be eligible for the BMB. (2) The BMB would
be calculated on a household basis and split equally between members of the household.
In the case of a married couple, both spouses would need to claim any Social
Security benefits for which they are eligible before they could receive the BMB.
If both spouses have claimed and one is NRA or above and the other has not yet
attained NRA, only the half of the BMB for the spouse over NRA would be payable.
(3) The BMB amount for single beneficiaries would be equal to either: 1) the BMB
base ($604 in 2015) - 0.70 * current monthly OASI benefit (not including any BMB),
if positive; or 2) zero. (4) The BMB amount for married beneficiaries would be
equal to either: 1) the BMB base ($906 in 2015) - 0.70 * total household monthly
OASI benefits (not including any BMB), if positive; or 2) zero. (5) The BMB bases
for singles and couples would be updated annually for changes in the average wage
index (AWI). (6) Single filers with Adjusted Gross Income (AGI) over $30,000 and
joint filers with AGI (including taxable SS benefits) over $45,000 would be subject
to clawback of the BMB through the income tax system. Any BMB would be reduced by
one dollar for every dollar of income above the thresholds. (Thresholds, in 2015
dollars, would be indexed to chained CPI-U.) Clawbacks would be credited back to
the OASI Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
-0.20 | -0.24 | -6% | -5% | |
| B5.9 |
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 40 years of coverage
equal to 125 percent of the monthly Aged Federal poverty level (about $1,277
in 2019). For those with 20 or fewer years of coverage, phase up linearly
from 0 percent of the poverty level for 10 years of coverage to 100 percent
of the poverty level. For those having between 20 and 40 years of coverage,
phase up linearly from 100 percent of the poverty level at 20 years of coverage
to 125% of the poverty level for 40 or more years of coverage. (c) For newly
eligible workers in 2022 and 2023, index the applicable poverty level using
the CPI index, to the year prior to eligibility. Then, for newly eligible
workers in 2024 and later, index the PIA per year of coverage by wage growth
for successive cohorts. (d) Disabled workers have a somewhat similar minimum
benefit, with work requirements scaled based on the number of years of non-disabled
potential work.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
-0.16 | -0.25 | -5% | -6% | |
| B5.10 |
Reconfigure the special minimum benefit, phased in for retired and disabled
workers newly eligible from 2027 through 2036: (a) A year of work (YOW) coverage
is equal to earnings at or above $10,875 in 2020 (reflecting a full-time worker
earning the federal minimum wage), adjusted thereafter for wage growth.
(b) At implementation, set the minimum PIA at zero percent of AWI for those
with 10 or fewer YOWs to 15 percent of AWI for those with 15 YOWs, increasing
linearly so that it reaches 19 percent for 19 YOWs. Then the minimum PIA would
jump up to 25 percent of AWI for those with 20 YOWs, increasing linearly so that
it equals 35 percent of AWI for those with 35 or more YOWs. (c) Use the AWI for
two years prior to the year of initial eligibility in the minimum PIA calculation
with COLA increase after the year of initial eligibility. (d) Scale the YOW
requirements for disabled workers, based on the number of years of non-disabled
potential work.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
-0.29 | -0.50 | -9% | -11% | |
| B5.11 |
Beginning for those newly eligible in 2021, reconfigure the special minimum
benefit: (a) The number of years of work (YOWs) is determined as total quarters
of coverage divided by 4, ignoring any fraction. Childcare years are granted
to parents who have a child under 6, with a limit of 5 such years. (b) For
beneficiaries becoming newly eligible in 2021, set the initial special minimum
benefit for 30+ YOWs equal to 100 percent of the monthly HHS poverty level
for 2020. For beneficiaries becoming newly eligible after 2021, the initial
special minimum benefit is indexed by the AWI. 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 2019) |
-0.12 | -0.18 | -4% | -4% | |
| 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 2021 or who
reaches their 85th birthday after the beginning of 2021.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.12 | -0.17 | -4% | -4% | |
| 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 2021 or
who reaches their 85th birthday after the beginning of 2021. 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) |
-0.12 | -0.17 | -4% | -4% | |
| B6.3 |
Provide an increase in the benefit level of any beneficiary who is 85
or older at the beginning of 2022 or who reaches their 85th birthday
after the beginning of 2022. Increase the beneficiary's PIA based on
an amount equal to the average retired-worker PIA at the end of 2021,
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 2022 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 2010) |
-0.15 | -0.20 | -5% | -4% | |
| B6.4 |
Starting in 2021, 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. Auxiliary
beneficiaries receive benefit enhancement based on the PIA of the governing worker.
graph | table | pdf-graph | pdf-table | memo (Ribble) | memo (Fiscal Commission) |
-0.18 | -0.23 | -5% | -5% | |
| B6.5 |
Starting in 2023, 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. Auxiliary beneficiaries receive benefit
enhancement based on the PIA of the governing worker.
graph | table | pdf-graph | pdf-table | memo (Moore 2019) | memo (Moore 2013) |
-0.27 | -0.34 | -8% | -8% | |
| B6.6 |
Starting in 2027, provide a uniform PIA increase in the 24th year of benefit
eligibility. Phase in the PIA increase at 0.5 percent per year from the 15th
through the 24th years of eligibility. The full PIA increase is equal to 5
percent of the average retired worker PIA in December of the 14th year of benefit
eligibility. A similar additional PIA increase applies in the 43rd year of
benefit eligibility (age 104), phased in from the 34rd through the 43nd years
of eligibility. For those past the 15th year of eligibility in 2027 (over age
76 for retirees), phase in the PIA enhancement over 10 years starting in 2027.
Auxiliary beneficiaries receive benefit enhancement based on the PIA of the
governing worker.
graph | table | pdf-graph | pdf-table | memo (FY 2014 Budget) |
-0.22 | -0.31 | -7% | -7% | |
| B6.7 |
Starting in January 2027, provide an addition to monthly benefits for all
beneficiaries who have been eligible for at least 20 years, with the following
specifications: (1) Augment benefits (not the PIA) for those of qualifying
age and eligibility duration with a MAGI below about $27,000 if single and
$54,000 if married. MAGI is set to equal the IRMAA definition (AGI plus
tax-exempt interest income). Index these thresholds after 2027 by the increase
in the C-CPI-U; (2) The full additional amount is applicable for those born
1961 and later, once 24 years elapse from initial eligibility. The basic
additional amount is calculated as 5 percent of the PIA for a hypothetical
worker with earnings equal to the AWI each year; (3) For those born prior
to 1961, the full additional amount is multiplied by the number of years
they have been affected by the C-CPI-U, divided by 24; (4) Beneficiaries
will receive 20 percent of their additional amount in their 20th year after
initial eligibility, 40 percent in their 21st year after initial eligibility,...,
and 100 percent of their additional amount in their 24th and later years
after benefit eligibility; (5) Retired and disabled worker beneficiaries,
dually entitled spouse beneficiaries, and all survivor beneficiaries received
their addition as described above. Spousal beneficiaries (aged or with child
in care) and child beneficiaries of a living retired or disabled worker receive
50 percent of the additional amount described above. Other beneficiary types
(such as parents of deceased workers) will receive the percentage of the flat
benefit that equals the percentage of the insured worker's PIA that they receive;
(6) The AWI used is for the second year prior to the beneficiary's initial
eligibility year, with applicable COLAs applied up to the age when the addition
is received; and (7) The additional amount is added to the monthly benefit
after reductions for early claiming or increases for delayed claiming have
been applied.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
-0.06 | -0.08 | -2% | -2% | |
| B6.8 |
Starting in 2022, provide an additional monthly benefit equal to 1/12th
of 2 percent of the AWI for the second prior year. This additional benefit
would be available to those meeting any of the following four requirements:
(a) Social Security beneficiaries who have attained age 82; (b) Social
Security beneficiaries who have attained NRA and have both AIME at or below
the first PIA bend point ($960 for 2020 initial eligibility) and at least
11 "years of coverage" as used for Windfall Elimination Provision purposes
(earnings above $25.575 for 2020); (c) Individuals who have received Social
Security benefits and/or SSI payments for at least 240 distinct months after
attaining age 19; or (d) SSI recipients who have attained the Social Security
NRA. This additional benefit would be paid out of the applicable Social
Security OASI or DI Trust Fund for any month in which the individual is in
receipt of a Social Security benefit; it would be paid out of the General
Fund of the Treasury for any month in which the individual is in receipt
of an SSI monthly payment but not a Social Security monthly benefit.
graph | table | pdf-graph | pdf-table | memo (Wyden) |
-0.28 | -0.37 | -9% | -8% | |
| B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2021 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.62 | 0.84 | 19% | 19% | |
| 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 $27,821 in 2020). The credits are available
for all past years to newly eligible retired-worker and disabled-worker
beneficiaries starting in 2021. The 5 years are chosen to yield the largest
increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.24 | -0.33 | -7% | -7% | |
| B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning
of 2021 and for those newly eligible for benefits after the beginning of
2021.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.79 | -0.84 | -25% | -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 2025 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 2024, based on changes in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.42 | 0.57 | 13% | 13% | |
| B7.8 |
Replace the Windfall Elimination Provision (WEP) and Government Pension Offset
(GPO) with a revised reduction for most OASI benefits based on all earnings,
beginning with beneficiaries newly eligible in 2027.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.07 | 0.11 | 2% | 3% | |
| B7.9 |
Beginning for newly eligible retired workers and spouses in 2027, all
claimants who are married would receive a specified joint-and-survivor
annuity benefit (i.e., surviving spouses would receive 75 percent of
the decedents' benefits, in addition to their own) that would be payable
if both were still alive. Initial benefits would be actuarially adjusted
to keep the expected value of benefits equivalent to what would otherwise
be current law.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) memo (Bipartisan Policy Center June 2016) |
-0.00 | -0.25 | -0% | -6% | |
| B7.10 |
Replace the current-law WEP with a new calculation for most OASI and DI
benefits based on covered and non-covered earnings, phased in for beneficiaries
becoming newly eligible in 2027 through 2036. For this new approach, compute
a PIA based on all past earnings (covered and non-covered), and multiply
by the "non-covered earnings ratio." This ratio is equal to the current-law
concept of the average indexed monthly earnings computed without non-covered
earnings divided by a modified average indexed monthly earnings that includes
both covered and non-covered earnings in our records.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.05 | 0.09 | 2% | 2% | |
| B7.11 |
Beginning in January 2023, eliminate the retirement earnings test for
all beneficiaries under normal retirement age, including retired workers,
aged spouses, aged widow(er)s, young spouses with a child in care, young
surviving spouses with a child in care, and children.
graph | table | pdf-graph | pdf-table | memo (Johnson, Walorski) | memo (Johnson 2016) |
0.03 | 0.12 | 1% | 3% | |
| B7.12 |
Provide an option to split the 8-percent delayed retirement credit (DRC)
to offer a lump sum benefit at initial entitlement equal to 2 percent of
the 8 percent DRC earned, and a 6 percent DRC on subsequent monthly benefits,
effective for workers newly entitled to retired worker benefits in 2023
and later. Widows are held harmless from the lump-sum decision.
graph | table | pdf-graph | pdf-table | memo (Johnson, Smith) | memo (Johnson 2016) |
-0.01 | 0.00 | -0% | 0% | |
| B7.13 |
Eliminate the DI 5-month waiting period for disabled workers
and disabled surviving spouses, and eliminate the 24-month Medicare
(HI) waiting period for individuals who have become entitled
to Social Security disability benefits. Effective with 2021
applications.
graph | table | pdf-graph | pdf-table | memo (Sanders 2018) |
-0.12 | -0.14 | -4% | -3% | |
| Category: Provisions Affecting Retirement Age (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 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) |
0.41 | 0.69 | 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) |
0.50 | 0.69 | 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) |
0.62 | 1.67 | 19% | 37% | |
| 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 (Ribble) | memo (Chaffetz) |
1.23 | 2.39 | 38% | 53% | |
| C1.5 |
Starting in 2021, 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) |
0.68 | 1.25 | 21% | 28% | |
| C1.6 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase the NRA by 1 month every 2 years until the NRA reaches 69. Also increase
the age up to which the delayed retirement credit may be earned at the same
rate (from 70 to 72). No change to earliest eligibility age.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.59 | 1.31 | 18% | 29% | |
| C1.7 |
After the normal retirement age (NRA) reaches 67 for those attaining age 62 in 2022,
increase the NRA by 3 months per year starting for attaining age 62 in 2023 until it
reaches 69 for those attaining age 62 in 2030. Increase the age up to which delayed
retirement credits may be earned from 70 to 72 on the same schedule. Increase the
widow(er) NRA in the same manner. The earliest eligibility age (EEA) for worker's
and widow(er)'s benefit is unchanged.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.95 | 1.33 | 30% | 29% | |
| C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for
those age 62 starting in 2022 and ending in 2039 (EEA reaches 65 for
those age 62 in 2039).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.09 | -0.43 | -3% | -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 62 in 2021.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) | memo (Warshawsky) |
0.58 | 1.48 | 18% | 33% | |
| 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 2013).
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) |
0.46 | 1.17 | 14% | 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) |
0.84 | 1.84 | 26% | 41% | |
| C2.5 |
Increase the normal retirement age (NRA) 3 months per year starting for
those age 62 in 2021 until the NRA reaches 70 in 2034. 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 2022 through 2029. Keep EEA at 64
thereafter.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee) |
1.51 | 2.91 | 47% | 64% | |
| C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 in 2021-2022 to 68 and 63, respectively, and then
by 3 months per year in 2023-2026 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.90 | 1.11 | 28% | 25% | |
| C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 starting in 2021 by 3 months per year until EEA reaches
64 in 2028 and NRA reaches 69 in 2030.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.83 | 1.11 | 26% | 25% | |
| C2.8 |
Starting in 2023, 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 30 percent for those age 62 in 2023) phased in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.43 | 0.76 | 13% | 17% | |
| Category: Provisions Affecting Family Member Benefits (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| D1 |
Beginning in 2021, 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 (Sanders, DeFazio 2019) | memo (Lawson) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) | memo (Begich, Murray) | memo (Moore 2013) | 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 2021, until the percent reaches 33 in 2037.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
0.10 | 0.14 | 3% | 3% | |
| 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 2022 and those becoming eligible after 2022.
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 2022 and those becoming
eligible after 2022.
graph | table | pdf-graph | pdf-table | memo (Lawson) | memo (Begich, Murray) |
-0.11 | -0.11 | -3% | -3% | |
| D5 |
Limit the spousal benefit to that received by the spouse of the 75th
percentile career-average worker, beginning with retired workers newly
eligible in 2027. For future cohorts, this limit would be indexed for
inflation annually using chain weighted CPI-U. The provision affects
divorced spouses and young spouses (retired workers) but not spouses
of disabled workers.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.09 | 0.18 | 3% | 4% | |
| D6 |
For spouses and children of retired and disabled workers becoming newly
eligible beginning in 2027 and phased in for 2027 through 2036, limit
their auxiliary benefit to one-half of the PIA for a hypothetical worker
with earnings equal to the national average wage index (AWI) each year.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.06 | 0.09 | 2% | 2% | |
| D7 |
Beginning in January 2023, require full time school enrollment as a
condition of eligibility for child benefits at age 15 up to 18.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.00 | 0.01 | 0% | 0% | |
| D8 |
Beginning in 2021, continue benefits for children of disabled, retired,
or deceased workers until age 26 if the child is in high school, college
or vocational school.
graph | table | pdf-graph | pdf-table | memo (Moore 2019) |
-0.10 | -0.09 | -3% | -2% | |
| Category: Provisions Affecting Payroll Taxes (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.8 percent in
2021 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.23 | 3.36 | 101% | 74% | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.9 percent in
2033-2062, and to 19.4 percent in years 2063 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.86 | 6.75 | 120% | 149% | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2026-2045, until the rate reaches 14.4 percent in
2045 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance) |
1.47 | 1.99 | 46% | 44% | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2023-2028, until the rate reaches 13.0 percent for 2028 and later.
graph | table | pdf-graph | pdf-table | memo (Moore 2019) | memo (Moore 2013) |
0.54 | 0.60 | 17% | 13% | |
| E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2024-2047, until the rate reaches 14.8 percent in 2047. Then increase
the payroll tax rate an additional 0.1 percentage point in each year from 2086-2090,
until the rate reaches 15.3 percent for 2090 and later.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) | memo (Larson 2015) |
1.80 | 2.85 | 56% | 63% | |
| E1.10 |
Increase the payroll tax rate by 0.1 percentage point per year for 2022 through
2031 so that it equals 13.4 percent for 2031 and later. The increase would be split
evenly between the employer and employee share, and would be split between OASI
and DI in proportion to currently scheduled payroll tax rates.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.88 | 1.00 | 27% | 22% | |
| E2.1 |
Eliminate the taxable maximum in years 2021 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 | 2.48 | 73% | 55% | |
| E2.2 |
Eliminate the taxable maximum in years 2021 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) |
1.78 | 1.44 | 55% | 32% | |
| E2.3 |
Eliminate the taxable maximum in years 2021 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. 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 (National Academy of Social Insurance) |
2.12 | 2.12 | 66% | 47% | |
| E2.4 |
Eliminate the taxable maximum for years 2027 and later (phased in 2021-2027),
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 2020
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, Hirono 2019) | memo (Deutch, Hirono 2017) | memo (Deutch 2015) | memo (Deutch 2010) |
2.18 | 2.34 | 68% | 52% | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2021,
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, DeFazio 2019) | memo (Sanders, DeFazio 2017) | memo (Sanders 2016) | memo (Sanders 2015) | memo (Sanders 2013) | memo (DeFazio 2011) |
2.23 | 2.48 | 70% | 55% | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable
maximum starting in 2021. 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 | 19% | 14% | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum
for years 2023-2070, and a 3 percent rate for years 2071 and later. Do not provide
benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.45 | 0.63 | 14% | 14% | |
| E2.11 |
Eliminate the taxable maximum in years 2026 and later. Phase in elimination by taxing
all earnings above the current-law taxable maximum at: 2.48 percent in 2022, 4.96 percent
in 2023, and so on, up to 12.40 percent in 2026. 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 2020 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 (Sanchez) | memo (Schatz) | memo (Harkin 2013) |
2.08 | 2.14 | 65% | 47% | |
| E2.12 |
Eliminate the taxable maximum in years 2032 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in 2023,
2.48 percent in 2024, and so on, up to 12.40 percent in 2032. 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 2019) | memo (Moore 2013) |
1.90 | 2.12 | 59% | 47% | |
| E2.13 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000
starting in 2022, 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 2021 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, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) | memo (Larson 2015) | memo (Larson 2014) |
1.92 | 2.34 | 60% | 52% | |
| E2.14 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000
starting in 2022, and tax all earnings once the current-law taxable
maximum exceeds $250,000. 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 2021
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 (Lawson) |
2.14 | 2.34 | 67% | 52% | |
| E2.15 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000
starting in 2022, and tax all earnings once the current-law taxable
maximum exceeds $300,000. 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 2021
that were in excess of that year's current-law taxable maximum; and
(2) a formula factor of 3 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Crist) |
2.04 | 2.27 | 63% | 50% | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be
subject to the payroll tax (phased in 2021-2030). Provide benefit credit
for earnings up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.72 | 0.55 | 22% | 12% | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be
subject to the payroll tax (phased in 2021-2030). Do not provide benefit
credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.99 | 1.12 | 31% | 25% | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning
in 2021 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 2010) | memo (National Academy of Social Insurance) |
0.61 | 0.58 | 19% | 13% | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent
beginning in 2023 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) |
0.77 | 1.12 | 24% | 25% | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning
in 2022 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 | 0.72 | 20% | 16% | |
| E3.8 |
Beginning in 2028, apply 2 percent payroll tax rate on earnings over
the wage-indexed equivalent of $200,000 in 2017 (about $292,200 in 2028),
with the threshold wage-indexed after 2028. 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) |
0.18 | 0.13 | 6% | 3% | |
| E3.9 |
Beginning in 2028, apply 2 percent payroll tax rate on earnings over
the wage-indexed equivalent of $200,000 in 2017 (about $292,200 in 2028),
with the threshold wage-indexed after 2028. 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 | 8% | 7% | |
| E3.10 |
Beginning in 2028, apply 2 percent payroll tax rate on earnings over
the wage-indexed equivalent of $300,000 in 2017 (about $438,600 in 2028),
with the threshold wage-indexed after 2028. 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) |
0.13 | 0.09 | 4% | 2% | |
| E3.11 |
Beginning in 2028, apply 2 percent payroll tax rate on earnings over
the wage-indexed equivalent of $300,000 in 2017 (about $438,600 in 2028),
with the threshold wage-indexed after 2028. 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 | 6% | 5% | |
| E3.12 |
Beginning in 2028, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017 (about $584,700 in 2028), with
the threshold wage-indexed after 2028. 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) |
0.11 | 0.08 | 3% | 2% | |
| E3.13 |
Beginning in 2028, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017 (about $584,700 in 2028), with
the threshold wage-indexed after 2028. 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 | 5% | 4% | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2021. For the employee payroll tax (6.2 percent) and for benefit
credit purposes, beginning in 2021, 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) |
1.41 | 1.30 | 44% | 29% | |
| E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject
to the payroll tax (phased in 2021-2030). In addition, apply a tax rate of
6.2 percent for earnings above the revised taxable maximum (phased in from
2021-2030). Provide benefit credit for earnings taxed up to the revised
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.35 | 1.26 | 42% | 28% | |
| E3.16 |
Beginning in 2022, apply 4 percent payroll tax rate on earnings above
the wage-indexed equivalent of $400,000 in 2015 (about $495,900 in 2022),
with the threshold wage-indexed after 2022. 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, or
about $495,900 and $619,800 in 2022 (with thresholds wage-indexed after
2022); and (2) a formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
0.31 | 0.33 | 10% | 7% | |
| E3.17 |
Beginning in 2022, increase the taxable maximum by twice the rate of
increase in the national Average Wage Index, but never by less than 3
percent. Provide benefit credit for earnings up to the revised taxable
maximum levels.
graph | table | pdf-graph | pdf-table | memo (Murphy) |
0.99 | 1.31 | 31% | 29% | |
| E3.18 |
Increase the taxable maximum linearly over 4 years to $238,200 for 2025.
After 2025, index the taxable maximum to AWI plus 0.5 percentage point.
Apply benefit credit on additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.58 | 0.59 | 18% | 13% | |
| E3.19 |
Increase the taxable maximum such that 90 percent of earnings would be
subject to the payroll tax (phased in linearly from 2022-2027). Provide
benefit credit for additional earnings taxed, using a secondary PIA formula.
This secondary PIA formula involves: (1) an "AIME+" derived from additional
annual earnings taxed over the current-law taxable maximum; and (2) a
formula factor of 2.5 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.96 | 1.03 | 30% | 23% | |
| Category: Provisions Affecting Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| F1 |
Starting in 2021, cover newly hired State and local government employees.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) | memo (Bipartisan Policy Center 2010) | memo (Warshawsky) | memo (Social Security Advisory Board) |
0.16 | -0.17 | 5% | -4% | |
| F2 |
Starting in 2021, 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) |
-0.60 | -0.79 | -19% | -17% | |
| F3 |
Expand covered earnings to include employer and employee premiums for
employer-sponsored group health insurance (ESI). Starting in 2024, phase
out the OASDI payroll tax exclusion for ESI premiums. Set an exclusion
level at the 75th percentile of premium distribution in 2024, with amounts
above that subject to the payroll tax. Reduce the exclusion level each
year by 10 percent of the 2024 exclusion level until fully eliminated
in 2033.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
1.13 | 0.85 | 35% | 19% | |
| F4 |
Expand covered earnings to include contributions to voluntary salary reduction
plans (such as Cafeteria 125 plans and Flexible Spending Accounts). Starting in
2021, 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 2010) |
0.33 | 0.23 | 10% | 5% | |
| F5 |
Tax Reform for Business: Establish a value added tax (VAT) of 3.0
percent for 2022 and 6.5 percent for 2023 and later. Assume about 75% of
personal consumption expenditures is subject to the VAT.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
-0.01 | 0.17 | -0% | 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 2022. Proceeds go
to the OASI and DI Trust Funds.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio 2019) | memo (Sanders, DeFazio 2017) | memo (Sanders 2016) | memo (Sanders 2015) |
0.97 | 1.21 | 30% | 27% | |
| F7 |
For the estate tax, gift tax, and generation skipping transfer (GST) tax,
return the respective exemption thresholds and tax rates to 2009 levels
($3.5 million threshold for estate tax with a top 45% tax rate) for deaths
after 2020 and gifts made after 2020, with those levels not indexed in future
years. All proceeds from the estate tax, gift tax, and GST tax would go
to the OASI and DI Trust Funds.
graph | table | pdf-graph | pdf-table | memo (Van Hollen) |
0.61 | 0.84 | 19% | 19% | |
| Category: Provisions Affecting Trust Fund Investment in Equities (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| G1 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in
2021-2035), assuming an ultimate 5.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.53* | 0.00 | * | 0% | |
| G2 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in
2021-2035), assuming an ultimate 4.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.39* | 0.00 | * | 0% | |
| G3 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in
2021-2035), assuming an ultimate 2.3 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 OASI and DI Trust Fund reserves in equities (phased in
2021-2030), assuming an ultimate 5.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.22* | 0.00 | * | 0% | |
| G5 |
Invest 15 percent of the OASI and DI Trust Fund reserves in equities (phased in
2021-2030), assuming an ultimate 2.3 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 OASI and DI Trust Fund reserves in equities (phased in
2023-2032), assuming an ultimate 5.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.34* | 0.00 | * | 0% | |
| G7 |
Invest 25 percent of the OASI and DI Trust Fund reserves in equities (phased in
2023-2032), assuming an ultimate 2.3 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 current-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 (2020 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.21 percent of payroll and in annual balance for the 75th year is 4.51 percent of payroll. | ||||||
| H2 |
Starting in 2021, tax Social Security benefits in a manner similar to private
pension income. Phase out the lower-income thresholds during 2021-2040.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.18 | 0.15 | 6% | 3% | |
| H3 |
Starting in 2022, 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 2010) |
-0.08 | -0.13 | -3% | -3% | |
| H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for single
filers and $100,000 for joint filers starting in 2022. 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) |
-0.09 | -0.01 | -3% | -0% | |
| H5 |
Beginning in 2027, for single/head-of-household/married-filing-separate taxpayers
with MAGI of $250,000 or more and joint filers with MAGI of $500,000 or more, include
up to the remaining 15 percent of Social Security benefits in taxable income (increased
from up to 85 percent of benefits taxable under current law). In subsequent years,
update these thresholds for growth in wages (AWI). Revenue from this provision would
be credited to the Social Security trust funds. Current law taxation of up to 85
percent of Social Security benefits would remain unchanged.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.01 | 0.01 | 0% | 0% | |
| H6 |
Eliminate federal income taxation of OASDI benefits that is credited to the
OASI and DI Trust Funds for 2054 and later. Phase out OASDI taxation of benefits
by increasing relevant "income" thresholds from 2045 through 2053 as follows,
for single/joint tax filers: (a) 2045 = $32,500/$65,000; (b) 2046 = $40,000/$80,000;
(c) 2047 = $47,500/$95,000; (d) 2048 = $55,000/$110,000; (e) 2049 = $62,500/$125,000;
(f) 2050 = $70,000/$140,000; (g) 2051 = $77,500/$155,000; (h) 2052 = $85,000/$170,000;
and (i) 2053 = $92,500/$185,000. Taxation of benefits revenues for the Hospital
Insurance (HI) Trust Fund would be maintained at the same level as if the
current-law computation applied.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
-0.52 | -1.04 | -16% | -23% | |
| H7 |
Replace the current-law thresholds for federal income taxation of OASDI benefits
with a single set of thresholds at $50,000 for single filers and $100,000 for joint
filers for taxation of up to 85 percent of OASDI benefits, effective for tax year
2022. These thresholds would be fixed and not indexed to price inflation or average
wage increase. Reallocate a portion of revenue from taxation of OASDI benefits to
the HI Trust Fund such that the HI Trust Fund would be in the same position as if
the current-law computation (in the absence of this provision) applied. The net
amount of revenue from taxing OASDI benefits, after the allocation to HI, would
be allocated to the combined Social Security Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) |
-0.15 | -0.01 | -5% | -0% | |