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## Summary of Provisions That Would Change the Social Security Program |

*Estimates based on the intermediate assumptions of
the 2008 and 2009 Trustees Report*

Description of proposed provisions | Change from present law | Results with this provision | ||||
---|---|---|---|---|---|---|

Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
|||

Category: Cost of Living Adjustment (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

A1 | Beginning December 2010,
reduce cost-of-living adjustment for OASDI benefits by 1
percentage point. graph | table | pdf-graph | pdf-table | memo |
1.55 | 2.19 | -0.45 | -2.15 | |

A2 | Beginning December 2010,
reduce cost-of-living adjustment for OASDI benefits by 0.5
percentage point. graph | table | pdf-graph | pdf-table | memo |
0.81 | 1.15 | -1.20 | -3.19 | |

A3 |
Starting with the December 2010 cost-of-living adjustment (COLA), compute
the COLA using a chained version of the consumer price index for wage and
salary workers (CPI-W). This new computation is estimated to result in an
annual COLA that is 0.3 percentage point less, on average. graph | table | pdf-graph | pdf-table | memo |
0.49 | 0.70 | -1.51 | -3.64 | |

A4 |
Starting with the December 2012 cost-of-living adjustment (COLA), compute
the COLA using a chained version of the consumer price index for wage and
salary workers (CPI-W). This new computation is estimated to result in an
annual COLA that is 0.3 percentage point less, on average. The new COLA would not
apply to DI benefits and would apply for all OASI benefits, except for those
who are converted from disabled worker to retired worker status.
graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.50 | -1.64 | -3.84 | |

A5 |
Beginning December 2010, add 1 percentage point to the annual cost-of-living
adjustment for OASDI monthly benefits for beneficiaries who have lived past
a "specified age", which reflects their age 65 life expectancy. The "specified
age" is based on the beneficiary's year of birth and is determined as the sum
of: (1) 65 and (2) the unisex cohort life expectancy at age 65 for the Social
Security area population with the same year of birth as the beneficiary.
graph | table | pdf-graph | pdf-table | memo |
-0.08 | -0.10 | -2.08 | -4.44 | |

Category: Provisions Affecting Level of Monthly Benefits (PIA) (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

B1.1 |
Beginning with those newly eligible for OASDI benefits in 2016 and
later, reduce PIA formula factors so that benefits grow by
inflation rather than by increases in real wages. graph | table | pdf-graph | pdf-table | memo |
2.28 | 7.16 | 0.27 | 2.82 | |

B1.2 | Progressive price indexing of PIA formula
factors beginning with individuals newly eligible for OASDI
benefits in 2016. Create new bend point at the 30th
percentile of earners. Maintain current-law benefits for earners
at the 30th percentile and below and reduce upper 2 formula
factors (32% and 15%) such that maximum worker benefit
grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
1.31 | 3.97 | -0.69 | -0.37 | |

B1.3 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2016. Create new bend point at the 40th
percentile of earners. Maintain current-law benefits for earners
at the 40th percentile and below and reduce upper 2 formula
factors (32% and 15%) such that maximum worker benefit
grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
1.10 | 3.32 | -0.90 | -1.02 | |

B1.4 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2016. Create new bend point at the 50th
percentile of earners. Maintain current-law benefits for earners
at the 50th percentile and below and reduce upper 2 formula
factors (32% and 15%) such that maximum worker benefit
grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
0.87 | 2.51 | -1.13 | -1.83 | |

B1.5 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2016. Create new bend point at the 60th
percentile of earners. Maintain current-law benefits for
earners at the 60th percentile and below and reduce upper
2 formula factors (32% and 15%) such that maximum worker benefit
grows by inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
0.61 | 1.57 | -1.39 | -2.77 | |

B1.6 (2013) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2013. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages.
Disability benefits are not affected by the proposal. Disabled
worker beneficiaries, upon attaining normal retirement age, would
be subject to a proportional reduction in benefits based on the
worker's years of disability. In addition, the reduction to the
upper 2 formula factors is suspended for any year in which
sustainable solvency over the next 75 years is expected. With this
provision taken alone, suspension is not expected within the next
75 years.graph | table | pdf-graph | pdf-table | memo |
1.31 | 3.64 | -0.69 | -0.70 | |

B1.6 (2016) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2016. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages.
Disability benefits are not affected by the proposal. Disabled
worker beneficiaries, upon attaining normal retirement age, would
be subject to a proportional reduction in benefits based on the
worker's years of disability. graph | table | pdf-graph | pdf-table | memo |
1.14 | 3.46 | -0.86 | -0.88 | |

B1.6 (2017) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2017. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average
wages. Disability benefits are not affected by the proposal.
Disabled worker beneficiaries, upon attaining normal retirement
age, would be subject to a proportional reduction in benefits
based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.10 | 3.42 | -0.90 | -0.92 | |

B1.6 (2018) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2018. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages.
Disability benefits are not affected by the proposal. Disabled
worker beneficiaries, upon attaining normal retirement age, would
be subject to a proportional reduction in benefits based on the
worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.04 | 3.36 | -0.96 | -0.98 | |

B2.1 (2019) |
For OASI beneficiaries becoming eligible for benefits in 2019 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2014 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, would be used as projected by SSA's Office
of the Chief Actuary. Disability benefits are not affected by the
proposal. Disabled worker beneficiaries, upon attaining normal
retirement age, would be subject to a proportional reduction in
benefits based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
0.56 | 1.93 | -1.44 | -2.41 | |

B2.1 (2022) |
For OASI beneficiaries becoming eligible for benefits in 2022 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2017 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, would be used as projected by SSA's Office
of the Chief Actuary. Disability benefits are not affected by the
proposal. Disabled worker beneficiaries, upon attaining normal
retirement age, would be subject to a proportional reduction in
benefits based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
0.49 | 1.81 | -1.51 | -2.53 | |

B3.1 |
For each year from 2010-2040, multiply the 32 and 15 percent
formula factors by 0.987, reducing the factors to 21 percent
and 10 percent respectively, for new eligibles in 2040 and later. graph | table | pdf-graph | pdf-table | memo |
1.51 | 2.94 | -0.49 | -1.40 | |

B3.2 |
Beginning with those newly eligible in 2017, multiply the 90 and 32
PIA factors each year by 0.9925 and 0.982, respectively. Stop
reductions in
2054. Beginning with those newly eligible in 2012, multiply the 15
factor by 0.982. Stop reduction of the 15 factor in 2049. DI will
have present law scheduled benefit and proportional reduction at
conversion to retired worker benefits at normal retirement age,
based on years of disability. graph | table | pdf-graph | pdf-table | memo |
2.03 | 5.31 | 0.03 | 0.96 | |

B3.3 |
For all individuals becoming eligible for OASDI benefits in 2010 and
later, use a modified primary insurance amount (PIA) formula.
The modified formula would increase the first bend point to $800 in
2009. Also, a new bend point would be placed between the reset
first bend point and the current-law second bend point. The
new bend point would be equal to the reset first bend point
plus 75 percent of the difference between the bend points.
The PIA formula factor between the new bend point and the upper
bend point would be lowered from 32% to 20%. The PIA formula
factor above the upper bend point would be lowered from 15% to
10%.
graph | table | pdf-graph | pdf-table | memo |
0.23 | 0.29 | -1.77 | -4.05 | |

B3.4 |
Multiply all PIA formula factors successively by 0.991 for new
benefit eligibility in each year 2013 through 2041. Disabled
workers and young survivors (surviving spouses with a
child-in-care and survivor children) would not be affected by
this provision. Upon conversion from disabled worker to retired
worker benefits, benefit levels would be proportionally reduced
based on the fraction of years the individual was not disabled
between ages 22 and 62.
graph | table | pdf-graph | pdf-table | memo |
1.45 | 3.11 | -0.56 | -1.23 | |

B3.5 |
Progressive indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2012, continuing through 2049, and
resuming in 2070. Create new bend point at the 30th percentile of earners.
Maintain current-law benefits for earners at the 30th percentile and below
and reduce upper 2 formula factors (32% and 15%) such that maximum worker
benefit is reduced by 1.1 percent per year as compared to current law, for
the years that progressive indexing applies. Disability benefits are not
affected by the proposal. Disabled worker beneficiaries, upon attaining
normal retirement age, would be subject to a proportional reduction in
benefits based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.25 | 2.90 | -0.76 | -1.44 | |

B3.6 |
Progressive indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2012 through 2061. Create new bend
point at the 30th percentile of earners. Maintain current-law benefits for
earners at the 30th percentile and below and reduce upper 2 formula factors
(32% and 15%) such that maximum worker benefit is reduced by 1.1 percent per
year as compared to current law, for the years that progressive indexing
applies. Disability benefits are not affected by the proposal. Disabled
worker beneficiaries, upon attaining normal retirement age, would be subject
graph | table | pdf-graph | pdf-table | memo |
1.34 | 3.33 | -0.66 | -1.01 | |

B3.7 |
Progressive indexing of PIA formula factors beginning with individuals
newly eligible for OASI benefits in 2012, continuing through 2021, and
then resuming in 2060. Create new bend point at the 30th percentile of
earners. Maintain current-law benefits for earners at the 30th percentile
and below and reduce upper 2 formula factors (32% and 15%) such that maximum
worker benefit is reduced by 1.1 percent per year as compared to current law,
for the years that progressive indexing applies. Disability benefits are
not affected by the proposal. Disabled worker beneficiaries, upon attaining
normal retirement age, would be subject to a proportional reduction in benefits
based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
0.63 | 1.59 | -1.38 | -2.76 | |

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 2010-2014. graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.43 | -1.71 | -3.91 | |

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 2010-2018. graph | table | pdf-graph | pdf-table | memo |
0.46 | 0.72 | -1.54 | -3.62 | |

B4.3 |
Eliminate dropout years for OASI and DI computation of primary
insurance amount (PIA) for individuals newly eligible for benefits
from 2011 to 2019. Specifically, for OASDI benefit computation,
reduce the maximum number of drop-out years from 5 for benefit
eligibility in 2010, with a decrease of 1 computation year in
2011, 2013, 2015, 2017, and 2019.
graph | table | pdf-graph | pdf-table | memo |
0.63 | 1.02 | -1.37 | -3.32 | |

B5.1 (2017) |
Increase the PIA to a level such that a worker with 30 years
of earnings at the minimum wage level would receive an adjusted
PIA equal to 120 percent of the Federal poverty level for an
aged individual. This provision would take full effect for
all newly eligible OASDI workers in 2026, and would be phased
in for new eligible in 2017 through 2025. The percentage
increase in PIA would be 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 would be 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 |
-0.04 | 0.00 | -2.04 | -4.34 | |

B5.1 (2018) |
Increase the PIA to a level such that a worker with 30 years of earnings
at the minimum wage level would receive an adjusted PIA equal to 120
percent of the Federal poverty level for an aged individual. This
provision would take full effect for all newly eligible OASDI workers in
2027, and would be phased in for new eligible in 2018 through 2026. The
percentage increase in PIA would be 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
would be 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 |
-0.04 | 0.00 | -2.04 | -4.34 | |

B5.2 |
Beginning in 2010, increase the special minimum benefit by making
the following changes: (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 $1,128 in 2009). The PIA per year of
coverage (after the first 10 years) would be $1,128/20 = $56.40. (c)
Index the initial PIA per year of coverage by wage growth for
successive cohorts, so that the special minimum keeps up with the
wage-indexed benefit formula.
graph | table | pdf-graph | pdf-table | memo |
-0.13 | -0.19 | -2.13 | -4.53 | |

B5.3 |
Beginning in 2010, increase the special minimum benefit by making
the following changes: (a) A year of coverage is defined to be
either a childcare year or a year in which 4 quarters of coverage
are earned. 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 $1,128 in 2009). The PIA per year of coverage
(after the first 10 years) would be $1,128/20 = $56.40. (c) Index
the initial PIA per year of coverage by wage growth for successive
cohorts, so that the special minimum keeps up with the wage-indexed
benefit formula.
graph | table | pdf-graph | pdf-table | memo |
-0.26 | -0.36 | -2.26 | -4.70 | |

B6.1 | Reduce benefits by
3 percent for those newly eligible for benefits in 2010 and later. graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.50 | -1.64 | -3.84 | |

B6.2 | Reduce benefits by
5 percent for those newly eligible for benefits in 2010 and later. graph | table | pdf-graph | pdf-table | memo |
0.61 | 0.84 | -1.39 | -3.50 | |

B6.3 |
Give parents earnings credits for up to five years if they have a
child under 6. The earnings credited for a childcare year would be
such that the resulting earnings assigned to the parents would equal
one half of the Social Security average-wage index -- about $21,021 in
2009. The credits would be available for all past years to newly
eligible retired-worker and disabled-worker beneficiaries in 2010
and later. The 5 most advantageous years would be used if more than
5 childcare credit years are possible; that is, the 5 years that
make the biggest difference in indexed earnings.
graph | table | pdf-graph | pdf-table | memo |
-0.24 | -0.35 | -2.24 | -4.69 | |

B6.4 |
Provide a 5 percent increase to the benefit level of any beneficiary
who is 85 or older at the beginning of 2010 or who reaches their
85th birthday after the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.13 | -2.09 | -4.48 | |

B6.5 |
Provide the same dollar amount increase to the benefit level of any
beneficiary who is 85 or older at the beginning of 2010 or who
reaches their 85th birthday after the beginning of 2010. The dollar
amount of increase equals 5 percent of the average retired worker
benefit in the prior year.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.14 | -2.09 | -4.48 | |

B6.6 |
Increase benefits by 20 percent for all beneficiaries as of the
beginning of 2010 and for those newly eligible for benefits after
the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-2.98 | -3.34 | -4.98 | -7.68 | |

B6.7 |
Increase benefits by 5 percent for all beneficiaries as of the
beginning of 2010 and for those newly eligible for benefits after
the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-0.75 | -0.83 | -2.75 | -5.17 | |

B6.8 |
Increase benefits by 2 percent for all beneficiaries as of the
beginning of 2010 and for those newly eligible for benefits after
the beginning of 2010.
graph | table | pdf-graph | pdf-table | memo |
-0.30 | -0.33 | -2.30 | -4.67 | |

Category: Provisions Affecting Retirement Age (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

C1.1 |
Shorten the hiatus in the normal retirement age (start increasing
to age 67 for those age 62 in 2010, rather than those age 62 in 2017).
graph | table | pdf-graph | pdf-table | memo |
0.09 | 0.00 | -1.91 | -4.34 | |

C1.2 |
Shorten the hiatus in the normal retirement age (start increasing
to age 67 for those age 62 in 2010, rather than those age 62 in 2017)
and then index the normal retirement age
(by 1 month every 2 years) until the NRA reaches age 68.
graph | table | pdf-graph | pdf-table | memo |
0.46 | 0.73 | -1.55 | -3.62 | |

C1.3 |
Shorten the hiatus in the normal retirement age (start increasing
to age 67 for those age 62 in 2010, rather than those age 62 in 2017)
and then index the normal retirement age (by 1 month
every 2 years) until the NRA reaches age 70. graph | table | pdf-graph | pdf-table | memo |
0.62 | 1.43 | -1.39 | -2.91 | |

C1.4 |
Shorten the hiatus in the normal retirement age (start increasing
to age 67 for those age 62 in 2010, rather than those age 62 in 2017)
and then increase the NRA 2 months per year until
the NRA reaches age 68. graph | table | pdf-graph | pdf-table | memo |
0.57 | 0.73 | -1.43 | -3.61 | |

C1.5 |
Shorten the hiatus in the normal retirement age (speed up the
increase to age 67). That is, increase the NRA by 2 months per year
for those attaining age 62 in 2012 through 2017, five years earlier
than in current law, which would increase the NRA 2 months per year
for those reaching age 62 in 2017 through 2022. graph | table | pdf-graph | pdf-table | memo |
0.06 | 0.00 | -1.94 | -4.34 | |

C1.6 |
Increase the normal retirement age (NRA) from 66 to 67 one year
earlier than current law, starting for those reaching age 62 in
2016 and ending for those reaching age 62 in 2021. Then, after
2021, index the NRA to maintain a constant ratio of expected
retirement years (life expectancy at NRA) to potential work
years (NRA minus 20).
graph | table | pdf-graph | pdf-table | memo |
0.41 | 1.23 | -1.59 | -3.11 | |

C1.7 |
Index benefits to longevity after the normal retirement age (NRA)
reaches age 67 under current law. Under current law, the NRA
reaches 67 for individuals who attain age 62 in 2022 and later.
Under this provision, the NRA would be further increased by
one month for those attaining age 62 in every other year after 2022.
graph | table | pdf-graph | pdf-table | memo |
0.40 | 1.20 | -1.60 | -3.14 | |

C1.8 |
Increase the normal retirement age (NRA) for those reaching age 62
in 2018 and later. For those reaching age 62 in 2018, the NRA would
be 66 years, 6 months. The NRA would increase 2 months per year for
those reaching age 62 in 2019, 2020, and 2021, reaching an NRA of 67
for those turning 62 in 2021.Then, after 2021, index the NRA to
maintain a constant ratio of expected retirement years (life expectancy
at NRA) to potential work years (NRA minus 20).
graph | table | pdf-graph | pdf-table | memo |
0.41 | 1.23 | -1.59 | -3.11 | |

C2.1 |
Gradually raise the earliest eligibility age (EEA)
for Social Security retirement benefits
from 62 to 65. The EEA would be increased by 2 months for
individuals reaching age 62 in every year, starting in 2011.
The EEA of 65 would apply for those reaching age 62 in 2028
and later (those reaching age 65 in 2031 and later). As under
current law, the PIA formula applicable for any individual
would depend on the year in which eligibility age is attained.
It should be noted that the elimination of retirement
eligibility between ages 62 and 65 would increase the number
of individuals who would apply for disabled worker benefits
at those ages.
graph | table | pdf-graph | pdf-table | memo |
-0.03 | -0.37 | -2.03 | -4.71 | |

C2.2 |
Shorten the hiatus in the NRA by 5 years, that is, start increasing
the NRA from 66 to 67 for individuals age 62 in 2012, rather
than in 2017. Beginning for those age 62 in 2012, increase
the EEA and NRA for retired worker benefits by 2 months per
year until the EEA reaches age 63 and the NRA reaches age 67
for those attaining age 62 in 2017. Thereafter, increase both
EEA and NRA by 1 month every 2 years. Finally, increase the
earliest eligibility age for disabled widow(er)s and aged
widow(er)s at the same rate as the increase in the EEA for
retired worker benefits.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) | memo (NRC/NAPA) |
0.56 | 1.23 | -1.45 | -3.11 | |

C2.3 |
Starting in 2012, convert all disabled worker beneficiaries to
retired worker status upon attainment of their EEA (rather than
their NRA). After conversion, apply the early retirement
reduction for retirement at EEA (currently 25%) times the ratio
of years after 2011 (or years after attaining age 21, if later)
and before attaining age 62, to 40. Medicare eligibility would
be extended to age 65 on the basis of disability. After 2011,
disability applications would not be accepted for benefit
entitlement that would start at ages over EEA.
graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.73 | -1.64 | -3.61 | |

Category: Provisions Affecting Family Member Benefits (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

D1 |
Beginning in 2010, 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 |
-0.07 | -0.07 | -2.07 | -4.41 | |

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 2010, until the percent
reaches 33. Thus, the spouse benefit would be based on 33 percent of
PIA for newly eligible spouses in 2026 and later.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.17 | -1.89 | -4.17 | |

Category: Provisions Affecting Payroll Tax Rates or Taxable Maximum (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

E1.1 | Raise payroll tax rates (for employees
and employers combined) by 2.2 percentage points in 2010 and later.
graph | table | pdf-graph | pdf-table | memo |
2.09 | 2.19 | 0.09 | -2.15 | |

E1.2 | Raise payroll tax rates (for employees
and employers combined) by 2.0 percentage points in 2022 (to 14.4%
combined) and by an additional 2.0 percentage points in 2052 (to
16.4% combined). graph | table | pdf-graph | pdf-table | memo |
2.06 | 3.92 | 0.06 | -0.42 | |

E1.3 |
Beginning in 2010, reduce the combined OASDI payroll tax rate
from 12.4 percent to 11.4 percent. graph | table | pdf-graph | pdf-table | memo |
-0.96 | -1.01 | -2.96 | -5.35 | |

E1.4 |
Raise the payroll tax rates gradually (for employees and employers
combined) by 0.1 percentage points in 2015; continue this increase
each year for 20 years. By 2034, the combined employee and employer
payroll tax rate would be 14.4 percent.
graph | table | pdf-graph | pdf-table | memo |
1.39 | 1.98 | -0.62 | -2.36 | |

E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent
in 2012, 12.9 percent in 2020, 13.1 in percent in 2030, 13.9 percent in
2040, 13.5 percent in 2050, and 13.3 percent in 2060.
graph | table | pdf-graph | pdf-table | memo |
0.73 | 0.91 | -1.28 | -3.43 | |

E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent
in 2012, 12.9 percent in 2020, 13.3 in percent in 2030, 13.8 percent in
2040, 14.4 percent in 2060, and 14.5 percent in 2075.
graph | table | pdf-graph | pdf-table | memo |
1.02 | 2.07 | -0.98 | -2.27 | |

E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2012,
13.0 percent in 2025, 13.3 in percent in 2040, 14.0 percent in 2060, 14.5 percent
in 2070, and 14.7 percent in 2080.
graph | table | pdf-graph | pdf-table | memo |
0.83 | 2.25 | -1.17 | -2.09 | |

E2.1 | Beginning in 2010, make all earnings
subject to the payroll tax (but retain the current-law taxable
maximum for benefit calculations). graph | table | pdf-graph | pdf-table | memo |
2.32 | 2.49 | 0.31 | -1.86 | |

E2.2 | Beginning in 2010, make all earnings
subject to the payroll tax and credit them for benefit purposes. graph | table | pdf-graph | pdf-table | memo |
1.89 | 1.65 | -0.11 | -2.69 | |

E2.3 |
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 2010-2019). All earnings subject to the payroll tax
would be used in determining benefits. graph | table | pdf-graph | pdf-table | memo |
0.75 | 0.62 | -1.25 | -3.72 | |

E2.4 |
Make 90 percent of the earnings subject to the payroll tax (phased in
2010-2019), 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 |
0.94 | 1.07 | -1.06 | -3.27 | |

E2.5 |
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 2011 and 2016. Benefit
computations would reflect all earnings up to the new taxable
maximum.
graph | table | pdf-graph | pdf-table | memo |
0.74 | 0.61 | -1.26 | -3.73 | |

E2.6 |
Impose a 3 percent payroll tax on OASDI covered earnings above
the current taxable maximum starting in 2010. Benefit
computations would not reflect any earnings above the taxable
maximum amount.
graph | table | pdf-graph | pdf-table | memo |
0.57 | 0.61 | -1.44 | -3.73 | |

E2.7 |
In 2010 through 2012, raise the OASDI contribution and benefit
base from $106,800 to $115,200 (in 2009 AWI indexed dollars).
For years after 2012, 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 |
0.11 | 0.08 | -1.89 | -4.26 | |

E2.8 |
Impose a 6 percent payroll tax on OASDI covered earnings above
the current taxable maximum starting in 2010. Benefit
computations would not reflect any earnings above the taxable
maximum amount.
graph | table | pdf-graph | pdf-table | memo |
1.12 | 1.20 | -0.88 | -3.14 | |

E2.9 |
Beginning in 2010, make all earnings subject to the OASDI payroll
tax and give benefit credit using an PIA formula that is extended to
provide less credit for those with AIMEs higher than the current-law
maximum AIME level. The high end of the benefit formula, applied to
2009, would be: 15 percent of AIME between $4,482 and $8,900
($106,800 divided by 12), plus 3 percent of AIME over $8,900.
graph | table | pdf-graph | pdf-table | memo |
2.17 | 2.19 | 0.16 | -2.15 | |

E2.10 |
Beginning in 2010, raise the taxable maximum each year by an
additional 2 percent over the current-law, wage-indexed amount until
total earnings subject to payroll taxes equals 90 percent of all
covered earnings. Credit the earnings for benefit purposes.
graph | table | pdf-graph | pdf-table | memo |
0.60 | 0.65 | -1.41 | -3.69 | |

E2.11 |
Make all earnings subject to the employer OASDI payroll tax
beginning in 2010. For the employee OASDI payroll tax and for
benefit calculation purposes, the taxable maximum would equal the
present-law taxable maximum for years 2009 and earlier. Beginning in
2010, the taxable maximum would be raised each year by an additional
2 percent over the current-law, wage-indexed amount until earnings
subject to payroll taxes equals 90 percent of all covered earnings.
graph | table | pdf-graph | pdf-table | memo |
1.41 | 1.39 | -0.60 | -2.95 | |

E2.12 |
Apply the following payroll tax rate above the current-law
taxable maximum, with no credit toward benefits: 2.0 percent in 2012
and 3.0 percent in 2060.
graph | table | pdf-graph | pdf-table | memo |
0.41 | 0.60 | -1.59 | -3.74 | |

E2.13 |
Increase the taxable maximum (contribution and benefit base) increases
by an additional 2 percent over normal indexing starting in 2012, until
90 percent of OASDI covered earnings is taxable (achieved in 2048).
The present-law taxable maximum is retained for benefit purposes; no
benefit credit is given for earnings above the present-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
0.69 | 1.06 | -1.31 | -3.28 | |

E2.14 |
Apply the following payroll tax rates above the current-law taxable
maximum, with no credit toward benefits: 2.0 percent in 2012, 3.0
percent in 2025, 3.5 percent in 2040, 4.5 percent in 2050, and 5.5
percent in 2060.
graph | table | pdf-graph | pdf-table | memo |
0.65 | 1.10 | -1.35 | -3.24 | |

E2.15 |
Apply 2 percent payroll tax rate on earnings over $200,000 in 2017,
with the $200,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.19 | 0.16 | -1.81 | -4.18 | |

E2.16 |
Apply 2 percent payroll tax rate on earnings over $200,000 in 2017,
with the $200,000 threshold wage-indexed after 2017. Give no
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.24 | 0.30 | -1.76 | -4.04 | |

E2.17 |
Apply 3 percent payroll tax rate on earnings over $200,000 in 2017,
with the $200,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.25 | -1.71 | -4.09 | |

E2.18 |
Apply 3 percent payroll tax rate on earnings over $200,000 in
2017, with the $200,000 threshold wage-indexed after 2017. Give
no benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.37 | 0.45 | -1.63 | -3.89 | |

E2.19 |
Apply 4 percent payroll tax rate on earnings over $200,000 in 2017,
with the $200,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.39 | 0.34 | -1.61 | -4.00 | |

E2.20 |
Apply 4 percent payroll tax rate on earnings over $200,000 in 2017,
with the $200,000 threshold wage-indexed after 2017. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.49 | 0.61 | -1.51 | -3.73 | |

E2.21 |
Apply 2 percent payroll tax rate on earnings over $300,000 in 2017,
with the $300,000 threshold wage-indexed after 2017. Give
proportional benefit credit for additional earnings in AIME for
benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.14 | 0.12 | -1.86 | -4.22 | |

E2.22 |
Apply 2 percent payroll tax rate on earnings over $300,000 in 2017,
with the $300,000 threshold wage-indexed after 2017. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.18 | 0.23 | -1.82 | -4.11 | |

E2.23 |
Apply 3 percent payroll tax rate on earnings over $300,000 in 2017,
with the $300,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.21 | 0.19 | -1.79 | -4.16 | |

E2.24 |
Apply 3 percent payroll tax rate on earnings over $300,000 in 2017,
with the $300,000 threshold wage-indexed after 2017. Give no
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.27 | 0.34 | -1.73 | -4.00 | |

E2.25 |
Apply 4 percent payroll tax rate on earnings over $300,000 in 2017,
with the $300,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.25 | -1.72 | -4.09 | |

E2.26 |
Apply 4 percent payroll tax rate on earnings over $300,000 in 2017,
with the $300,000 threshold wage-indexed after 2017. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.45 | -1.64 | -3.89 | |

E2.27 |
Apply 2 percent payroll tax rate on earnings over $400,000 in 2017,
with the $400,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.10 | -1.89 | -4.24 | |

E2.28 |
Apply 2 percent payroll tax rate on earnings over $400,000 in 2017,
with the $400,000 threshold wage-indexed after 2017. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.15 | 0.18 | -1.85 | -4.16 | |

E2.29 |
Apply 3 percent payroll tax rate on earnings over $400,000 in 2017,
with the $400,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.17 | 0.15 | -1.83 | -4.19 | |

E2.30 |
Apply 3 percent payroll tax rate on earnings over $400,000 in 2017,
with the $400,000 threshold wage-indexed after 2017. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.28 | -1.78 | -4.06 | |

E2.31 |
Apply 4 percent payroll tax rate on earnings over $400,000 in 2017,
with the $400,000 threshold wage-indexed after 2017. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.23 | 0.20 | -1.77 | -4.14 | |

E2.32 |
Apply 4 percent payroll tax rate on earnings over $400,000 in 2017,
with the $400,000 threshold wage-indexed after 2017. Give no benefit
credit for earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.30 | 0.37 | -1.71 | -3.97 | |

E2.33 |
Make 90% of the earnings subject to the payroll tax (phased in 2010-2019).
In addition, apply a tax rate of 6.2 percent for earnings above the
revised taxable maximum, phased in from 2010-2019. This additional tax
rate would be paid by employers on wages of their employees, and by
self-employed workers on their earnings. Benefit computations for
workers would only reflect earnings below the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
1.37 | 1.36 | -0.63 | -2.98 | |

Category: Provisions Affecting Coverage of Employment (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

F1 | Cover newly hired State and local
government employees beginning in 2010. graph | table | pdf-graph | pdf-table | memo |
0.17 | -0.17 | -1.83 | -4.51 | |

F2 |
Provide for OASDI payroll tax coverage of employer provided group
health insurance cost, starting in 2011. Specifically, any cost
toward such group health insurance borne by employees would cease
to be deductible, and the cost borne by employers would now be
allocated to employees as if it had been wages, for the purpose
of payroll tax (and later, benefit) calculations. Both employee
and employer OASDI payroll taxes would be affected by this proposal.
graph | table | pdf-graph | pdf-table | memo |
1.13 | 0.97 | -0.87 | -3.37 | |

F3 |
Beginning in 2010, exempt individuals with more than 180 quarters
of coverage from the OASDI payroll tax.
graph | table | pdf-graph | pdf-table | memo |
-0.26 | -0.38 | -2.26 | -4.72 | |

Category: Provisions Affecting Trust Fund Investment in Equities (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

G1 | Invest 40 percent of the Trust Funds in
equities (phased in 2010-2024), assuming
an ultimate 6.4 percent real rate of return on equities. graph | table | pdf-graph | pdf-table | memo |
0.67 | 0.00 | -1.34 | -4.34 | |

G2 | Invest 40 percent of the Trust Funds in
equities (phased in 2010-2024), assuming
an ultimate 5.4 percent real rate of return on equities. graph | table | pdf-graph | pdf-table | memo |
0.48 | 0.00 | -1.52 | -4.34 | |

G3 |
Invest 40 percent of the Trust Funds in equities (phased in
2010-2024), assuming an ultimate 2.9 percent real rate of return on
equities, the same as the assumed ultimate yield on the
special-issue Social Security trust fund bonds. graph | table | pdf-graph | pdf-table | memo |
0.00 | 0.00 | -2.00 | -4.34 | |

G4 |
Gradually invest 15 percent of OASDI trust fund assets in a broad
index of equity market securities (such as the Wilshire 5000),
assuming an ultimate 6.4 percent annual real rate of return on
equities.
Increase the portion in equities by 1.5 percent each year 2010
through 2019. Maintain the percentage at 15 percent thereafter.
graph | table | pdf-graph | pdf-table | memo |
0.27 | 0.00 | -1.73 | -4.34 | |

G5 |
Invest 15 percent of the Trust Funds in equities
(phased in 2010-2019), assuming an ultimate 2.9 percent annual
real rate of return on equities, the same as the assumed
ultimate yield on the special-issue Social Security trust
fund bonds.
graph | table | pdf-graph | pdf-table | memo |
0.00 | 0.00 | -2.00 | -4.34 | |

Category: Provisions Affecting Taxation of Benefits (2009 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-2.00 | -4.34 | ||||

H1 | Tax Social Security benefits in a
manner similar to private pension income beginning in 2010.
Phase out the lower-income thresholds during 2010-2019. graph | table | pdf-graph | pdf-table | memo |
0.28 | 0.16 | -1.72 | -4.18 | |

H2 |
Tax Social Security benefits in a manner similar to private pension
income beginning in 2010. Phase out the lower-income thresholds
during 2010-2029.
graph | table | pdf-graph | pdf-table | memo |
0.25 | 0.16 | -1.75 | -4.18 |

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