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Summary of Provisions That Would Change the Social Security Program
Solvency Provisions

Description of Proposed Provisions:
Provisions Affecting OASDI Contribution and Benefit Base

Estimates based on the intermediate assumptions of the 2008 Trustees Report

  Change from present law Results with this provision
Long-range
actuarial
balance		 Annual
balance in
75th year		 Long-range
actuarial
balance		 Annual
balance in
75th year
Present Law, Alternative II.
 -1.70 -4.20
E1 Beginning in 2009, make all earnings subject to the payroll tax (but retain the current-law taxable maximum for benefit calculations).
graph | table | pdf-graph | pdf-table 		2.19 2.67 0.50 -1.53
E2 Beginning in 2009, make all earnings subject to the payroll tax and credit them for benefit purposes.
graph | table | pdf-graph | pdf-table 		1.84 1.96 0.14 -2.24
E3 Determine the level of the contribution and benefit base such that 90 percent of the earnings would be subject to the payroll tax (phased in 2009-2018). All earnings subject to the payroll tax would be used in determining benefits.
graph | table | pdf-graph | pdf-table 		0.83 0.93 -0.87 -3.27
E4 Make 90% of the earnings subject to the payroll tax (phased in 2009-2018), but retain the current-law taxable maximum for benefit purposes. This estimate considers all self-employed earnings in computing the percentage of earnings subject to the payroll tax.
graph | table | pdf-graph | pdf-table | memo 		1.01 1.36 -0.69 -2.84
E5 Raise the taxable maximum amount (the contribution and benefit base) to include 90 percent of total OASDI covered earnings. Phase in this increase gradually between 2010 and 2015. Benefit computations would reflect all earnings up to the new taxable maximum.
graph | table | pdf-graph | pdf-table 		0.84 0.93 -0.86 -3.27
E6 Impose a 3 percent payroll tax on OASDI covered earnings above the current taxable maximum starting in 2009. Benefit computations would not reflect any earnings above the taxable maximum amount.
graph | table | pdf-graph | pdf-table 		0.64 0.78 -1.06 -3.42
E7 In 2009 through 2011, raise the OASDI contribution and benefit base from $102,000 to $110,000 (in 2008 AWI indexed dollars). For years after 2011, the contribution and benefit base would be increased based on changes in SSA's average wage index. Additional earnings subject to the OASDI payroll tax would be credited for benefit calculation purposes.
graph | table | pdf-graph | pdf-table | memo 		0.15 0.13 -1.55 -4.07
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Last reviewed or modified November 13, 2008