Summary of Provisions That Would Change the Social Security Program
Estimates based on the intermediate assumptions of
the 2021 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 (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| A1 |
Starting December 2022, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.95 | 2.47 | 55% | 57% | |
| A2 |
Starting December 2022, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.02 | 1.30 | 29% | 30% | |
| A3 |
Starting December 2022, 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) |
0.62 | 0.79 | 18% | 18% | |
| A4 |
Starting December 2024, 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) |
0.48 | 0.62 | 14% | 14% | |
| A5 |
Starting December 2022, 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) |
-0.11 | -0.12 | -3% | -3% | |
| A6 |
Starting December 2023, 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 (Lawson 2021) | 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 2017) | 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) |
-0.42 | -0.56 | -12% | -13% | |
| A7 |
Starting December 2022, 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) |
1.84 | 2.32 | 52% | 54% | |
| A8 |
Starting December 2022, 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) |
0.54 | 0.68 | 15% | 16% | |
| A9 |
For single/head-of-household/married-filing-separate taxpayers with modified adjusted gross
income (MAGI) below $94,500 and for joint filers with MAGI below $189,000 for December 2023
($85,000 and $170,000 multiplied by estimated CPI-U for 2018-2023), 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 2023 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 2023.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.51 | 2.54 | 43% | 59% | |
| Category: Provisions Affecting Level of Monthly Benefits (PIA) (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI
benefits in 2028: 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) |
2.74 | 7.31 | 78% | 168% | |
| B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2028: 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) |
1.51 | 4.06 | 43% | 94% | |
| B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2028: 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) |
1.29 | 3.47 | 36% | 80% | |
| B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2028: 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) |
1.07 | 2.75 | 30% | 63% | |
| B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2028: 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) |
0.80 | 1.87 | 23% | 43% | |
| B1.6 (2025) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2025: 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) |
1.46 | 3.74 | 41% | 86% | |
| B1.6 (2030) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2030: 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 | 3.51 | 35% | 81% | |
| B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2029 through 2066: 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 | 2.48 | 29% | 57% | |
| B1.8 |
Progressive price indexing (50th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2026 through 2065: 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) |
0.98 | 2.23 | 28% | 51% | |
| B2.1 |
Beginning with those newly eligible for OASI benefits in 2031, multiply
the PIA factors by the ratio of life expectancy at 67 for 2026 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 | 1.68 | 16% | 39% | |
| B3.8 |
Beginning with those newly eligible for OASDI benefits in 2028, 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 2061: 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 | 2.34 | 29% | 54% | |
| B3.9 |
Beginning with those newly eligible for OASDI benefits in 2034, gradually reduce
the 15 percent PIA factor in each year so that it reaches 10 percent for those newly
eligible in 2063 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 2028, gradually increase
the first PIA bend point in each year so that it is 15 percent higher for those newly
eligible in 2042 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) |
-0.39 | -0.69 | -11% | -16% | |
| B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all beneficiaries
eligible as of January 2023 and for those newly eligible for benefits after 2022.
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) |
-0.25 | -0.26 | -7% | -6% | |
| B3.12 |
Use an annualized "mini-PIA" formula beginning with retired workers newly eligible
in 2028. 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 2028, 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 2032. 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) |
0.21 | 0.31 | 6% | 7% | |
| B3.13 |
For retired worker beneficiaries newly eligible in 2028 (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 $996
in 2021 to $1,266 in 2021. Phase this provision in over 10 years (2028-2037). The phase-in
would work on a weighted-average basis: 90% of CL formula + 10% of proposal formula
for 2028, 80% of CL formula + 20% of proposal formula for 2029, and so on.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.09 | 0.19 | 3% | 4% | |
| B3.14 |
Beginning with those newly eligible for OASDI benefits in 2023, reduce the 15
percent PIA factor by 2 percentage points per year so that it reaches 5 percent
for those newly eligible in 2027 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.37 | 0.53 | 10% | 12% | |
| B3.15 |
Increase the 90 percent PIA formula factor to 91 percent for beneficiaries
newly eligible in 2026, 92 percent for those newly eligible in 2027, ...,
reaching 95 percent for those newly eligible in 2030 and later.
graph | table | pdf-graph | pdf-table | memo (Sanchez) |
-0.29 | -0.43 | -8% | -10% | |
| B3.16 |
For retired worker and disabled worker beneficiaries becoming initially eligible
in January 2028 or later, phase in a new benefit formula (from 2028 to 2037). 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 2037.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.00 | 1.71 | 28% | 39% | |
| 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 2022-2026.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.27 | 0.37 | 8% | 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 2022-2030.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.45 | 0.63 | 13% | 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 2023-2031.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.60 | 0.87 | 17% | 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 2023 and later (without
regard for when the beneficiary became initially eligible).
graph | table | pdf-graph | pdf-table | memo (Murphy) |
-0.05 | -0.05 | -1% | -1% | |
| B4.5 |
For retired and disabled workers, reduce the maximum number of dropout years to
4 for workers newly eligible in 2023, to 3 for workers newly eligible in 2024,
and to 2 for workers newly eligible in 2025 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.37 | 0.50 | 10% | 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 2039, and is phased in for new eligibles in 2030
through 2038. 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 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 $1,329 in 2020). For those with under 30 years of
coverage, the PIA per year of coverage over 10 years is $1,329/20 = $66.45. (c) Index
the initial PIA per year of coverage by wage growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (Lawson 2021) | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Sanders, DeFazio 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Lawson 2017) | 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) |
-0.17 | -0.23 | -5% | -5% | |
| B5.3 |
Beginning for those newly eligible in 2022, 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 $1,329
in 2020). For those with under 30 years of coverage, the PIA per year of coverage over
10 years is $1,329/20 = $66.45. (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 | -0.33 | -7% | -8% | |
| B5.4 |
Beginning for those newly eligible in 2028, 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 $1,329 in 2020). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,329/20 = $66.45. (c) From 2020 to
the year of implementation, 2028, 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) |
-0.11 | -0.17 | -3% | -4% | |
| B5.5 |
Beginning for those newly eligible in 2023, 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
$1,376 in 2020). For those with under 30 years of coverage, the PIA per year of coverage
over 19 years is $1,376/11 = $125.10. (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 | -0.05 | -1% | -1% | |
| B5.6 |
Beginning for those newly eligible in 2022, 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 $1,073
in 2021). For those with under 30 years of coverage, the PIA per year of coverage over
10 years is $1,073/20 = $53.65. (c) From 2021 to the year of implementation, 2022, 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) |
-0.09 | -0.13 | -3% | -3% | |
| B5.7 |
Beginning for those newly eligible in 2024, 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) |
-0.02 | -0.01 | -1% | -0% | |
| B5.8 |
Beginning in 2026, 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) |
-0.21 | -0.24 | -6% | -6% | |
| B5.9 |
Beginning for those newly eligible in 2023, 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 $1,293 in 2020). 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 2023 and 2024, index the applicable poverty level
using the CPI index, to the year prior to eligibility. Then, for newly eligible workers
in 2025 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) |
-0.12 | -0.19 | -3% | -4% | |
| B5.10 |
Reconfigure the special minimum benefit, phased in for retired and disabled workers
newly eligible from 2028 through 2037: (a) A year of work (YOW) coverage is equal to
earnings at or above $10,875 in 2021 (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) |
-0.33 | -0.54 | -9% | -12% | |
| B5.11 |
Beginning for those newly eligible in 2022, 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 2022, set the initial special minimum benefit for 30+ YOWs equal to 100 percent of
the monthly HHS poverty level for 2021. For beneficiaries becoming newly eligible after
2022, 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 2022) | memo (Moore 2019) |
-0.11 | -0.15 | -3% | -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 2022 or who reaches their 85th birthday after
the beginning of 2022.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.13 | -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 2022 or who reaches their 85th
birthday after the beginning of 2022. 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 2023 or who reaches their 85th birthday after the beginning of 2023.
Increase the beneficiary's PIA based on an amount equal to the average retired-worker
PIA at the end of 2022, 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 2023 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 | -4% | -5% | |
| B6.4 |
Starting in 2022, 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 2024, 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 2022) | memo (Moore 2019) | memo (Moore 2013) |
-0.28 | -0.34 | -8% | -8% | |
| B6.6 |
Starting in 2028, 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 2028 (over age 76 for retirees), phase
in the PIA enhancement over 10 years starting in 2028. Auxiliary beneficiaries
receive benefit enhancement based on the PIA of the governing worker.
graph | table | pdf-graph | pdf-table | memo (FY 2014 Budget) |
-0.23 | -0.31 | -7% | -7% | |
| B6.7 |
Starting in January 2028, 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 $27,750 if single and $55,500 if married. MAGI is set to equal the IRMAA definition
(AGI plus tax-exempt interest income). Index these thresholds after 2028 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 | -0.07 | -2% | -2% | |
| B6.8 |
Starting in 2023, 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 ($996 for 2021 initial eligibility) and at least 11 "years of coverage"
as used for Windfall Elimination Provision purposes (earnings above $26,550 for 2021); (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) |
-0.29 | -0.37 | -8% | -8% | |
| B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2022 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.64 | 0.84 | 18% | 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 $29,532 in 2021). The credits are available for all past years to
newly eligible retired-worker and disabled-worker beneficiaries starting in 2022.
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 | -0.31 | -7% | -7% | |
| B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2022
and for those newly eligible for benefits after the beginning of 2022.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.81 | -0.83 | -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 2026 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 2026, based on changes in the SSA
average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.52 | 0.68 | 15% | 16% | |
| 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 2028.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.08 | 0.11 | 2% | 3% | |
| B7.9 |
Beginning for newly eligible retired workers and spouses in 2028, 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 | -0.27 | -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 2028 through 2037. 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 | 0.08 | 1% | 2% | |
| B7.11 |
Beginning in January 2024, 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 2024 and later. Widows are held harmless from the lump-sum
decision.
graph | table | pdf-graph | pdf-table | memo (Johnson, Smith) | memo (Johnson 2016) |
-0.00 | 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 2022 applications.
graph | table | pdf-graph | pdf-table | memo (Sanders 2018) |
-0.11 | -0.12 | -3% | -3% | |
| B7.14 |
Eliminate completely the Windfall Elimination Provision (WEP) and Government
Pension Offset (GPO), effective 2022.
graph | table | pdf-graph | pdf-table | memo (Brown) |
-0.12 | -0.12 | -3% | -3% | |
| Category: Provisions Affecting Retirement Age (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 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) |
0.42 | 0.67 | 12% | 16% | |
| 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) |
0.51 | 0.67 | 14% | 16% | |
| 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) |
0.65 | 1.65 | 18% | 38% | |
| 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) |
1.28 | 2.35 | 36% | 54% | |
| C1.5 |
Starting in 2022, 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) |
0.69 | 1.21 | 20% | 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) |
0.61 | 1.28 | 17% | 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) |
0.98 | 1.29 | 28% | 30% | |
| C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for those
age 62 starting in 2023 and ending in 2040 (EEA reaches 65 for those age 62
in 2040).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.10 | -0.43 | -3% | -10% | |
| 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 2022.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) | memo (Warshawsky) |
0.60 | 1.42 | 17% | 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) |
0.48 | 1.14 | 13% | 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) |
0.85 | 1.78 | 24% | 41% | |
| C2.5 |
Increase the normal retirement age (NRA) 3 months per year starting for those
age 62 in 2022 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) |
1.57 | 2.83 | 44% | 65% | |
| C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age (EEA)
for those age 62 in 2022-2023 to 68 and 63, respectively, and then by 3 months
per year in 2024-2027 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.89 | 1.06 | 25% | 24% | |
| C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age (EEA)
for those age 62 starting in 2022 by 3 months per year until EEA reaches 64 in
2029 and NRA reaches 69 in 2030.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.83 | 1.06 | 23% | 24% | |
| C2.8 |
Starting in 2024, 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 2024) phased in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.41 | 0.72 | 12% | 16% | |
| Category: Provisions Affecting Family Member Benefits (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| D1 |
Beginning in 2022, 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 (Lawson 2021) | memo (Sanders, DeFazio 2019) | memo (Lawson 2017) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) | memo (Begich, Murray) | memo (Moore 2013) | memo (National Academy of Social Insurance) |
-0.05 | -0.05 | -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 2022, until the percent reaches 33 in 2038.
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 2023 and those becoming eligible after 2022.
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
-0.02 | -0.01 | -0% | -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 2023 and those becoming eligible after 2022.
graph | table | pdf-graph | pdf-table | memo (Lawson 2021) | memo (Lawson 2017) | 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 2028. 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) |
0.08 | 0.15 | 2% | 3% | |
| D6 |
For spouses and children of retired and disabled workers becoming newly eligible
beginning in 2028 and phased in for 2028 through 2037, 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) |
0.08 | 0.12 | 2% | 3% | |
| D7 |
Beginning in January 2024, 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) |
0.01 | 0.01 | 0% | 0% | |
| D8 |
Beginning in 2022, 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 2022)| memo (Moore 2019) |
-0.09 | -0.09 | -2% | -2% | |
| Category: Provisions Affecting Payroll Taxes (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 16.1 percent in
2022 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.61 | 3.73 | 102% | 86% | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 16.4 percent in
2034-2063, and to 20.4 percent in years 2064 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
4.52 | 7.92 | 128% | 182% | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2027-2046, until the rate reaches 14.4 percent in 2046 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance) |
1.51 | 2.02 | 43% | 47% | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2024-2029, until the rate reaches 13.0 percent for 2029 and later.
graph | table | pdf-graph | pdf-table | memo (Moore 2022) | memo (Moore 2019) | memo (Moore 2013) |
0.55 | 0.61 | 16% | 14% | |
| E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2025-2048, until the rate reaches 14.8 percent in 2048 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) |
1.81 | 2.43 | 51% | 56% | |
| E1.10 |
Increase the payroll tax rate by 0.1 percentage point per year for 2023 through
2032 so that it equals 13.4 percent for 2032 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) |
0.90 | 1.02 | 26% | 23% | |
| E2.1 |
Eliminate the taxable maximum in years 2022 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) |
2.58 | 2.73 | 73% | 63% | |
| E2.2 |
Eliminate the taxable maximum in years 2022 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) |
2.00 | 1.71 | 57% | 39% | |
| E2.3 |
Eliminate the taxable maximum in years 2022 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) |
2.34 | 2.38 | 66% | 55% | |
| E2.4 |
Eliminate the taxable maximum for years 2028 and later (phased in 2022-2028), 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 2021 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) |
2.39 | 2.59 | 68% | 60% | |
| E2.5 |
Apply 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. 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) |
2.47 | 2.73 | 70% | 63% | |
| E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum
starting in 2022. Do not provide benefit credit for earnings above the current-law
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.66 | 0.70 | 19% | 16% | |
| E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum for years
2024-2071, and a 3 percent rate for years 2072 and later. Do not provide benefit credit for
earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.49 | 0.69 | 14% | 16% | |
| E2.11 |
Eliminate the taxable maximum in years 2027 and later. Phase in elimination by taxing all
earnings above the current-law taxable maximum at: 2.48 percent in 2023, 4.96 percent in
2024, and so on, up to 12.40 percent in 2027. 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 2022 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) |
2.28 | 2.39 | 65% | 55% | |
| E2.12 |
Eliminate the taxable maximum in years 2033 and later. Phase in elimination by taxing
all earnings above the current-law taxable maximum at: 1.24 percent in 2024, 2.48 percent
in 2025, and so on, up to 12.40 percent in 2033. 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 2022) | memo (Moore 2019) | memo (Moore 2013) |
2.09 | 2.38 | 59% | 55% | |
| E2.13 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 starting in
2023, 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 2022
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) |
2.14 | 2.60 | 61% | 60% | |
| E2.14 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 starting in 2023,
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 2022 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 2021) | memo (Lawson 2017) |
2.37 | 2.60 | 67% | 60% | |
| E2.15 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000 starting in 2023,
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 2022 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) |
2.26 | 2.53 | 64% | 58% | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2022-2031). Provide benefit credit for earnings
up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.77 | 0.62 | 22% | 14% | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2022-2031). Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
1.05 | 1.18 | 30% | 27% | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2022
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) |
0.65 | 0.66 | 18% | 15% | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2024 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) |
0.81 | 1.18 | 23% | 27% | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in 2023
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) |
0.67 | 0.79 | 19% | 18% | |
| E3.8 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017 (about $305,400 in 2029), with the threshold wage-indexed
after 2029. 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) |
0.20 | 0.16 | 6% | 4% | |
| E3.9 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017 (about $305,400 in 2029), with the threshold wage-indexed
after 2029. 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) |
0.28 | 0.33 | 8% | 8% | |
| E3.10 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017 (about $458,400 in 2029), with the threshold wage-indexed
after 2029. 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) |
0.15 | 0.12 | 4% | 3% | |
| E3.11 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017 (about $458,400 in 2029), with the threshold wage-indexed
after 2029. 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) |
0.21 | 0.25 | 6% | 6% | |
| E3.12 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017 (about $611,100 in 2029), with the threshold wage-indexed
after 2029. 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 | 0.10 | 3% | 2% | |
| E3.13 |
Beginning in 2029, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017 (about $611,100 in 2029), with the threshold wage-indexed
after 2029. 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) |
0.17 | 0.20 | 5% | 5% | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent) beginning in
2022. For the employee payroll tax (6.2 percent) and for benefit credit purposes, beginning
in 2022, 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) |
1.49 | 1.40 | 42% | 32% | |
| E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject to the payroll
tax (phased in 2022-2031). In addition, apply a tax rate of 6.2 percent for earnings above
the revised taxable maximum (phased in from 2022-2031). Provide benefit credit for earnings
taxed up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.44 | 1.36 | 41% | 31% | |
| E3.16 |
Beginning in 2023, apply 4 percent payroll tax rate on earnings above the wage-indexed
equivalent of $400,000 in 2015 (about $526,200 in 2023), with the threshold wage-indexed
after 2023. 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 $526,200
and $657,900 in 2023 (with thresholds wage-indexed after 2023); and (2) a formula factor
of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
0.35 | 0.38 | 10% | 9% | |
| E3.17 |
Beginning in 2023, 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) |
1.06 | 1.49 | 30% | 34% | |
| E3.18 |
Increase the taxable maximum linearly over 4 years to $248,400 for 2026. After 2026,
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) |
0.61 | 0.65 | 17% | 15% | |
| E3.19 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in linearly from 2023-2028). 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) |
1.02 | 1.09 | 29% | 25% | |
| Category: Provisions Affecting Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| F1 |
Starting in 2022, 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) |
0.14 | -0.16 | 4% | -4% | |
| F2 |
Starting in 2022, 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) |
-0.64 | -0.84 | -18% | -19% | |
| F3 |
Expand covered earnings to include employer and employee premiums for employer-sponsored
group health insurance (ESI). Starting in 2025, phase out the OASDI payroll tax exclusion
for ESI premiums. Set an exclusion level at the 75th percentile of premium distribution
in 2025, with amounts above that subject to the payroll tax. Reduce the exclusion level
each year by 10 percent of the 2025 exclusion level until fully eliminated in 2035.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
1.21 | 0.85 | 34% | 20% | |
| F4 |
Expand covered earnings to include contributions to voluntary salary reduction
plans (such as Cafeteria 125 plans and Flexible Spending Accounts). Starting in
2022, 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) |
0.37 | 0.25 | 11% | 6% | |
| F5 |
Tax Reform for Business: Establish a value added tax (VAT) of 3.0 percent
for 2023 and 6.5 percent for 2024 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 2023. 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) |
0.96 | 1.19 | 27% | 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
2021 and gifts made after 2021, 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) |
0.60 | 0.78 | 17% | 18% | |
| Category: Provisions Affecting Trust Fund Investment in Equities (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| G1 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in
2022-2036), assuming an ultimate 5.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.51* | 0.00 | * | 0% | |
| G2 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in
2022-2036), assuming an ultimate 4.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.37* | 0.00 | * | 0% | |
| G3 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities (phased in
2022-2036), 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
2022-2031), assuming an ultimate 5.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.21* | 0.00 | * | 0% | |
| G5 |
Invest 15 percent of the OASI and DI Trust Fund reserves in equities (phased in
2022-2031), 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
2024-2033), assuming an ultimate 5.8 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.32* | 0.00 | * | 0% | |
| G7 |
Invest 25 percent of the OASI and DI Trust Fund reserves in equities (phased in
2024-2033), 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 (2021 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.54 percent of payroll and in annual balance for the 75th year is 4.34 percent of payroll. | ||||||
| H2 |
Starting in 2022, tax Social Security benefits in a manner similar to private
pension income. Phase out the lower-income thresholds during 2022-2041.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.21 | 0.17 | 6% | 4% | |
| H3 |
Starting in 2023, 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) |
-0.04 | -0.09 | -1% | -2% | |
| H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for single filers
and $100,000 for joint filers starting in 2023. 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) |
-0.11 | -0.01 | -3% | -0% | |
| H5 |
Beginning in 2028, 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) |
-0.53 | -0.98 | -15% | -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 2023. 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) |
-0.17 | -0.01 | -5% | -0% | |