Estimates based on the intermediate assumptions of
the 2018 Trustees Report
Printer-friendly Version (PDF - coming soon)
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 (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
A1 |
Starting December 2019, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.81 | 2.39 | 64% | 55% | |
A2 |
Starting December 2019, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.94 | 1.25 | 33% | 29% | |
A3 |
Starting December 2019, 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) |
0.58 | 0.77 | 20% | 18% | |
A4 |
Starting December 2021, compute the COLA using a chained version of the
consumer price index for wage and salary workers (CPI-W). We estimate this
new computation will reduce the annual COLA by about 0.3 percentage point,
on average. 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) |
0.43 | 0.58 | 15% | 13% | |
A5 |
Starting December 2019, add 1 percentage point to the annual COLA for beneficiaries
who have lived past a "specified age". The "specified age" is the sum of: (1) 65 and
(2) the unisex cohort life expectancy at age 65.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
-0.10 | -0.11 | -3% | -3% | |
A6 |
Starting December 2020, 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 (Deutch, Hirono) | memo (Lawson) | memo (Larson 2017) | memo (Sanders, DeFazio) | memo (Sanchez) | memo (Sanders 2016) | memo (Schatz) | memo (Deutch 2015) | memo (DeFazio 2015) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch 2010) |
-0.39 | -0.54 | -14% | -12% | |
A7 |
Starting December 2019, 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) |
1.71 | 2.25 | 60% | 52% | |
A8 |
Starting December 2019, 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) |
0.49 | 0.64 | 17% | 15% | |
A9 |
For single/head-of-household/married-filing-separate taxpayers with modified
adjusted gross income (MAGI) below $89,000 and for joint filers with MAGI below
$178,000 for December 2020 ($85,000 and $170,000 multiplied by estimated CPI-U
for 2019), 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 2020 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 2020.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.35 | 2.47 | 47% | 57% |
Category: Provisions Affecting Level of Monthly Benefits (PIA) (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI
benefits in 2024: 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) |
2.65 | 7.68 | 94% | 171% | |
B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning
with individuals newly eligible for OASDI benefits in 2024: Create a
new bend point at the 30th percentile of the AIME distribution of newly
retired workers. Maintain current-law benefits for earners at the 30th
percentile and below. Reduce the 32 and 15 percent factors above the 30th
percentile such that the initial benefit for a worker with AIME equal to
the taxable maximum grows by inflation rather than the growth in the SSA
average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.46 | 4.26 | 52% | 95% | |
B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2024: 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) |
1.23 | 3.58 | 44% | 80% | |
B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2024: 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) |
1.00 | 2.72 | 35% | 61% | |
B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2024: 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) |
0.72 | 1.76 | 26% | 39% | |
B1.6 (2021) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2021: 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) |
1.47 | 3.96 | 52% | 88% | |
B1.6 (2026) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2026: 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) |
1.18 | 3.66 | 42% | 82% | |
B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2025 through 2062: Create a new bend
point at the 40th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 40th percentile and below.
Reduce the 32 and 15 percent factors above the 40th percentile such that the
initial benefit for a worker with AIME equal to the taxable maximum grows by
inflation rather than the growth in the SSA average wage index. Disabled workers
are: (a) not affected prior to normal retirement age; and (b) subject to a
proportional reduction in benefits, based on the worker's years of disability,
upon conversion to retired-worker beneficiary status. Young survivors (children
of deceased workers and surviving spouses with a child in care) are not affected.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee) |
0.98 | 2.56 | 35% | 57% | |
B1.8 |
Progressive price indexing (50th percentile) of PIA factors for individuals
newly eligible for OASI benefits in 2022 through 2061: 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) |
0.96 | 2.29 | 34% | 51% | |
B2.1 |
Beginning with those newly eligible for OASI benefits in 2027, multiply the
PIA factors by the ratio of life expectancy at 67 for 2022 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) |
0.52 | 1.68 | 18% | 37% | |
B3.8 |
Beginning with those newly eligible for OASDI benefits in 2024, 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 2057: a) the 32 percent PIA factor below the new bend
point reduces to 30 percent; b) the 32 percent PIA factor above the new
bend point reduces to 10 percent; and c) the 15 percent PIA factor reduces
to 5 percent.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.93 | 2.30 | 33% | 51% | |
B3.9 |
Beginning with those newly eligible for OASDI benefits in 2030, gradually
reduce the 15 percent PIA factor in each year so that it reaches 10 percent
for those newly eligible in 2059 and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.08 | 0.23 | 3% | 5% | |
B3.10 |
Beginning with those newly eligible for OASDI benefits in 2024, gradually
increase the first PIA bend point in each year so that it is 15 percent
higher for those newly eligible in 2038 and later.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio) | memo (Sanchez) | memo (Sanders 2016) | memo (Schatz) | memo (Sanders 2015) | memo (Harkin 2013) | memo (Harkin 2012) |
-0.37 | -0.71 | -13% | -16% | |
B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all
beneficiaries eligible as of January 2019 and for those newly eligible
for benefits after 2018.
graph | table | pdf-graph | pdf-table | memo (Larson 2017) | memo (Larson 2015) | memo (Larson 2014) |
-0.24 | -0.26 | -8% | -6% | |
B3.12 |
Use an annualized "mini-PIA" formula beginning with retired workers
newly eligible in 2024. 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 2024, 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 2028.
Disabled worker benefits are unchanged under this provision.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.25 | 0.40 | 9% | 9% | |
B3.13 |
For retired worker beneficiaries newly eligible in 2024 (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 $885 in 2017 to $1,125 in 2017.
Phase this provision in over 10 years (2024-2033). The phase-in would work
on a weighted-average basis: 90% of CL formula + 10% of proposal formula for
2024, 80% of CL formula + 20% of proposal formula for 2025, and so on.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.07 | 0.14 | 2% | 3% | |
B3.14 |
Beginning with those newly eligible for OASDI benefits in 2019, reduce
the 15 percent PIA factor by 2 percentage points per year so that it
reaches 5 percent for those newly eligible in 2023 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.32 | 0.47 | 11% | 10% | |
B3.15 |
Increase the 90 percent PIA formula factor to 91 percent for beneficiaries
newly eligible in 2022, 92 percent for those newly eligible in 2023, ...,
reaching 95 percent for those newly eligible in 2026 and later.
graph | table | pdf-graph | pdf-table | memo (Sanchez) |
-0.28 | -0.44 | -10% | -10% | |
B3.16 |
For retired worker and disabled worker beneficiaries becoming initially
eligible in January 2024 or later, phase in a new benefit formula (from
2024 to 2033). 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 2033.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.89 | 1.60 | 31% | 36% | |
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 2018-2022.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.27 | 0.38 | 10% | 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 2018-2026.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.44 | 0.64 | 15% | 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 2019-2027.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.60 | 0.92 | 21% | 21% | |
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 2019 and later (without
regard for when the beneficiary became initially eligible).
graph | table | pdf-graph | pdf-table | memo (Murphy) |
-0.05 | -0.05 | -2% | -1% | |
B4.5 |
For retired and disabled workers, reduce the maximum number of dropout
years to 4 for workers newly eligible in 2019, to 3 for workers newly
eligible in 2020, and to 2 for workers newly eligible in 2021 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.36 | 0.52 | 13% | 12% | |
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 2035, and is phased
in for new eligibles in 2026 through 2034. 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 2018, 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 $1,238 in 2016). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,238/20 = $61.90.
(c) Index the initial PIA per year of coverage by wage growth for
successive cohorts.
graph | table | pdf-graph | pdf-table | memo (Lawson) | memo (Larson 2017) | memo (Sanders, DeFazio) | memo (Sanders 2016) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (National Academy of Social Insurance) |
-0.15 | -0.22 | -5% | -5% | |
B5.3 |
Beginning for those newly eligible in 2018, 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 $1,238 in 2016). For those with under 30 years of coverage,
the PIA per year of coverage over 10 years is $1,238/20 = $61.90.
(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) |
-0.22 | -0.32 | -8% | -7% | |
B5.4 |
Beginning for those newly eligible in 2024, 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 $1,238 in
2016). For those with under 30 years of coverage, the PIA per year of coverage
over 10 years is $1,238/20 = $61.90. (c) From 2016 to the year of implementation,
2024, index the PIA per year of coverage using the chain-CPI index. Then, for
later years, index the PIA per year of coverage by wage growth for successive
cohorts. (d) Scale work requirements for disabled workers, based on the number
of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
-0.12 | -0.20 | -4% | -4% | |
B5.5 |
Beginning for those newly eligible in 2019, 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 $1,276 in 2016). For those with
under 30 years of coverage, the PIA per year of coverage over 19 years is
$1,276/11 = $116.00. (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) |
-0.05 | -0.08 | -2% | -2% | |
B5.6 |
Beginning for those newly eligible in 2018, 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 $1,005 in 2017). For those with
under 30 years of coverage, the PIA per year of coverage over 10 years is
$1,005/20 = $50.25. (c) From 2017 to the year of implementation, 2018, index
the PIA per year of coverage using the CPI index. Then, for later years,
index the PIA per year of coverage by wage growth for successive cohorts.
(d) Scale work requirements for disabled workers, based on the number of
years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
-0.10 | -0.16 | -4% | -3% | |
B5.7 |
Beginning for those newly eligible in 2020, 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) |
-0.02 | -0.00 | -1% | -0% | |
B5.8 |
Beginning in 2022, create a Basic Minimum Benefit (BMB) within Social Security
(i.e., the cost of the BMB would be charged as a cost to the OASI Trust Fund),
with the following specifications: (1) Eligibility for the BMB would be limited
to OASI beneficiaries who have attained normal retirement age (NRA) or above.
OASI beneficiaries under NRA would not be eligible for the BMB. (2) The BMB would
be calculated on a household basis and split equally between members of the household.
In the case of a married couple, both spouses would need to claim any Social Security
benefits for which they are eligible before they could receive the BMB. If both
spouses have claimed and one is NRA or above and the other has not yet attained
NRA, only the half of the BMB for the spouse over NRA would be payable. (3) The
BMB amount for single beneficiaries would be equal to either: 1) the BMB base
($604 in 2015) - 0.70 * current monthly OASI benefit (not including any BMB), if
positive; or 2) zero. (4) The BMB amount for married beneficiaries would be equal
to either: 1) the BMB base ($906 in 2015) - 0.70 * total household monthly OASI
benefits (not including any BMB), if positive; or 2) zero. (5) The BMB bases for
singles and couples would be updated annually for changes in the average wage index
(AWI). (6) Single filers with Adjusted Gross Income (AGI) over $30,000 and joint
filers with AGI (including taxable SS benefits) over $45,000 would be subject to
clawback of the BMB through the income tax system. Any BMB would be reduced by one
dollar for every dollar of income above the thresholds. (Thresholds, in 2015 dollars,
would be indexed to chained CPI-U.) Clawbacks would be credited back to the OASI Trust
Fund.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
-0.20 | -0.24 | -7% | -5% | |
B5.9 |
Beginning for those newly eligible in 2019, 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 $1,200
in 2016). 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 2019 and 2020, index the applicable poverty level using the CPI
index, to the year prior to eligibility. Then, for newly eligible workers in
2021 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. Disabled workers have a somewhat similar minimum benefit amount.
graph | table | pdf-graph | pdf-table | memo (Ribble) |
-0.14 | -0.24 | -5% | -5% | |
B5.10 |
Reconfigure the special minimum benefit, phased in for retired and disabled
workers newly eligible from 2024 through 2033: (a) A year of work (YOW) coverage
is equal to earnings at or above $10,875 in 2017 (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) |
-0.22 | -0.40 | -8% | -9% | |
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 2018 or who reaches
their 85th birthday after the beginning of 2018.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.11 | -0.16 | -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 2018 or who reaches
their 85th birthday after the beginning of 2018. The dollar amount of increase
equals 5 percent of the average retired-worker MBA in the prior year.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.11 | -0.16 | -4% | -3% | |
B6.3 |
Provide an increase in the benefit level of any beneficiary who is 85 or
older at the beginning of 2019 or who reaches their 85th birthday after
the beginning of 2019. Increase the beneficiary's PIA based on an amount
equal to the average retired-worker PIA at the end of 2018, 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 2019 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) |
-0.14 | -0.19 | -5% | -4% | |
B6.4 |
Starting in 2018, provide a 5 percent uniform benefit increase 24 years
after initial benefit eligibility. Phase in the benefit increase at 1
percent per year from the 20th through 24th years after eligibility. For
disabled workers, the eligibility age is the initial entitlement year to
the benefit. The benefit increase is equal to 5 percent of the PIA of a
worker assumed to have career-average earnings equal to SSA's average wage
index.
graph | table | pdf-graph | pdf-table | memo (Ribble) | memo (Fiscal Commission) |
-0.16 | -0.21 | -5% | -5% | |
B6.5 |
Starting in 2020, provide a 5 percent uniform PIA increase 20 years after
benefit eligibility. Phase in the PIA increase at 1 percent per year from
the 16th through 20th years after eligibility. The full PIA increase is
equal to 5 percent of the PIA of a worker assumed to have career-average
earnings equal to the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Moore) |
-0.24 | -0.31 | -8% | -7% | |
B6.6 |
Starting in 2024, provide a uniform PIA increase 23 years after benefit
eligibility. Phase in the PIA increase at 0.5 percent per year from the
14th through the 23rd years after eligibility. The full PIA increase is
equal to 5 percent of the average retired worker PIA in December of the
12th year after benefit eligibility. A similar additional PIA increase
applies 42 years after benefit eligibility (age 104), phased in from the
33rd through the 42nd years after eligibility. For those past the 14th
year of eligibility in 2024 (over age 76 for retirees), phase in the PIA
enhancement over 10 years starting in 2024. Auxiliary beneficiaries receive
benefit enhancement based on the PIA of the governing worker.
graph | table | pdf-graph | pdf-table | memo (FY 2014 Budget) |
-0.21 | -0.30 | -8% | -7% | |
B6.7 |
Starting in January 2024, 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 $25,600 if single and
$51,200 if married. MAGI is set to equal the IRMAA definition (AGI plus
tax-exempt interest income). Index these thresholds after 2024 by the increase
in the C-CPI-U; (2) The full additional amount is applicable for those born
1958 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 1958, 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) |
-0.07 | -0.08 | -2% | -2% | |
B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2018 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.61 | 0.84 | 22% | 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 $24,682 in 2016). The credits
are available for all past years to newly eligible retired-worker
and disabled-worker beneficiaries starting in 2018. The 5 years are
chosen to yield the largest increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.22 | -0.32 | -8% | -7% | |
B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of
2018 and for those newly eligible for benefits after the beginning of 2018.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.78 | -0.84 | -27% | -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 2022 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
2022, based on changes in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.34 | 0.47 | 12% | 10% | |
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 2024.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.06 | 0.09 | 2% | 2% | |
B7.9 |
Beginning for newly eligible retired workers and spouses in 2024, 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) |
0.02 | -0.21 | 1% | -5% | |
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 2024 through 2033. 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) |
0.03 | 0.06 | 1% | 1% | |
B7.11 |
Beginning in January 2020, 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) |
0.02 | 0.13 | 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 2020 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% |
Category: Provisions Affecting Retirement Age (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 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) |
0.37 | 0.69 | 13% | 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) |
0.46 | 0.69 | 16% | 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) |
0.55 | 1.55 | 19% | 36% | |
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) |
1.11 | 2.17 | 39% | 50% | |
C1.5 |
Starting in 2019, allow workers to choose whether to have their payroll tax
rate reduced by 2 percentage points. For each calendar year that a worker chooses
to have their payroll tax reduced, their normal retirement age (NRA) increases
1 month. We assume 2/3 of workers each year will choose this payroll reduction.
The General Fund of the Treasury reimburses the OASI and DI Trust Funds for
the reduction in payroll tax revenue.
graph | table | pdf-graph | pdf-table | memo (Landry) |
0.66 | 1.23 | 23% | 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) |
0.53 | 1.32 | 19% | 31% | |
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) |
0.88 | 1.32 | 31% | 31% | |
C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for
those age 62 starting in 2020 and ending in 2037 (EEA reaches 65 for
those age 62 in 2037).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.07 | -0.42 | -2% | -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 EEA in 2019.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) | memo (Warshawsky) |
0.51 | 1.25 | 18% | 29% | |
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) |
0.42 | 1.06 | 15% | 25% | |
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) |
0.75 | 1.78 | 27% | 41% | |
C2.5 |
Increase the normal retirement age (NRA) 3 months per year starting for
those age 62 in 2019 until the NRA reaches 70 in 2033. Thereafter, index
the NRA to maintain a constant ratio of expected retirement years (life
expectancy at NRA) to potential work years (NRA minus 20). We assume the
NRA will increase 1 month every 2 years. Also, increase the earliest eligibility
age (EEA) from 62 to 64 at the same time the NRA increases from 67 to 69;
that is, for those attaining age 62 in 2021 through 2028. Keep EEA at 64
thereafter.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee) |
1.37 | 2.65 | 48% | 61% | |
C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 in 2020-2021 to 68 and 63, respectively, and then
by 3 months per year in 2022-2025 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.89 | 1.11 | 31% | 26% | |
C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age (EEA)
for those age 62 starting in 2019 by 3 months per year until EEA reaches 64 in
2026 and NRA reaches 69 in 2029.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.81 | 1.11 | 28% | 26% | |
C2.8 |
Starting in 2021, convert all disabled-worker beneficiaries to retired-worker
status upon attainment of their earliest eligibility age (EEA) rather than their
normal retirement age (NRA). After conversion, apply the early retirement reduction
for retirement at EEA (currently about 29.2 percent for those age 62 in 2021)
phased in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.43 | 0.80 | 15% | 18% |
Category: Provisions Affecting Family Member Benefits (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
D1 |
Beginning in 2019, 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) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) | memo (Begich, Murray) | memo (Moore) | memo (National Academy of Social Insurance) |
-0.06 | -0.06 | -2% | -1% | |
D2 |
The current spouse benefit is based on 50 percent of the PIA of the other
spouse. Reduce this percent each year by 1 percentage point beginning with
newly eligible spouses in 2019, until the percent reaches 33 in 2035.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
0.10 | 0.15 | 4% | 4% | |
D3 |
Allow divorced aged spouses and divorced surviving spouses married 5 to 9
years to get benefits based on the former spouse's account. Divorced aged
and surviving spouses would receive 50% of the applicable current-law PIA
percentage if married 5 years, 60% of the applicable PIA percentage if
married 6 years, ..., 90% of the applicable PIA percentage if married 9
years. This benefit would be available to divorced spouses on the rolls at
the beginning of 2020 and those becoming eligible after 2020.
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
-0.02 | -0.01 | -1% | -0% | |
D4 |
Establish an alternative benefit for a surviving spouse. For the surviving
spouse, the alternative benefit would equal 75 percent of the sum of the
survivor's own worker benefit and the deceased worker's PIA (including any
actuarial reductions or delayed retirement credits). If the deceased worker
died before becoming entitled, use the age 62 actuarial reduction if deceased
before age 62, or the applicable actuarial reduction/DRC for entitlement at
the age of death if deceased after 62. The alternative benefit would not
exceed the PIA of a hypothetical earner who earns the SSA average wage index
(AWI) every year, and who becomes eligible for retired-worker benefits in the
same year in which the deceased worker became entitled to worker benefits or
died (if before entitlement). The alternative benefit would be paid only if
more than the current-law benefit. This benefit would be available to surviving
spouses on the rolls at the beginning of 2020 and those becoming eligible after
2020.
graph | table | pdf-graph | pdf-table | memo (Lawson) | memo (Begich, Murray) |
-0.12 | -0.12 | -4% | -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 2025. For future cohorts, this limit would be indexed for
inflation annually using chain weighted CPI-U. The provision affects
divorced spouses and young spouses (retired workers) but not spouses
of disabled workers.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.09 | 0.19 | 3% | 4% | |
D6 |
For spouses and children of retired and disabled workers becoming newly
eligible beginning in 2025 and phased in for 2025 through 2034, 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) |
0.07 | 0.10 | 2% | 2% | |
D7 |
Beginning in January 2021, require full time school enrollment as a
condition of eligibility for child benefits at age 15 up to 18.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.00 | 0.00 | 0% | 0% |
Category: Provisions Affecting Payroll Taxes (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.4 percent in
2018 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.85 | 2.97 | 101% | 66% | |
E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.5 percent in
2030-2059, and to 18.6 percent in years 2060 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.33 | 5.99 | 118% | 134% | |
E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2023-2042, until the rate reaches 14.4 percent in 2042 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance) |
1.45 | 1.99 | 51% | 44% | |
E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2020-2025, until the rate reaches 13.0 percent for 2025 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.54 | 0.60 | 19% | 13% | |
E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2021-2044, until the rate reaches 14.8 percent in 2044. Then
increase the payroll tax rate an additional 0.1 percentage point in each year
from 2083-2087, until the rate reaches 15.3 percent for 2087 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2017) | memo (Larson 2015) |
1.76 | 2.85 | 62% | 64% | |
E1.10 |
Increase the payroll tax rate by 0.1 percentage point per year for 2019 through
2028 so that it equals 13.4 percent for 2028 and later. The increase would be
split evenly between the employer and employee share, and would be split between
OASI and DI in proportion to currently scheduled payroll tax rates.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.88 | 1.00 | 31% | 22% | |
E2.1 |
Eliminate the taxable maximum in years 2018 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) |
2.35 | 2.46 | 83% | 55% | |
E2.2 |
Eliminate the taxable maximum in years 2018 and later, and apply full 12.4 percent
payroll tax rate to all earnings. Provide benefit credit for earnings above the
current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.89 | 1.60 | 67% | 36% | |
E2.3 |
Eliminate the taxable maximum in years 2018 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) |
2.15 | 2.15 | 76% | 48% | |
E2.4 |
Eliminate the taxable maximum for years 2024 and later (phased in 2018-2024),
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
2017 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) | memo (Deutch 2015) | memo (Deutch 2010) |
2.18 | 2.35 | 77% | 52% | |
E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2018,
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) | memo (Sanders 2016) | memo (Sanders 2015) | memo (Sanders 2013) | memo (DeFazio 2011) |
2.19 | 2.46 | 77% | 55% | |
E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum
starting in 2018. Do not provide benefit credit for earnings above the current-law
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.61 | 0.64 | 21% | 14% | |
E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable
maximum for years 2020-2067, and a 3 percent rate for years 2068 and later.
Do not provide benefit credit for earnings above the current-law taxable
maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.44 | 0.63 | 16% | 14% | |
E2.11 |
Eliminate the taxable maximum in years 2023 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 2.48 percent in
2019, 4.96 percent in 2020, and so on, up to 12.40 percent in 2023. 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 2017 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) |
2.09 | 2.16 | 74% | 48% | |
E2.12 |
Eliminate the taxable maximum in years 2029 and later. Phase in elimination
by taxing all earnings above the current-law taxable maximum at: 1.24 percent
in 2020, 2.48 percent in 2021, and so on, up to 12.40 percent in 2029. Provide
benefit credit for earnings above the current-law taxable maximum. Create a
new bend point at the current-law taxable maximum with a 3 percent formula
factor applying above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Moore) |
1.92 | 2.15 | 68% | 48% | |
E2.13 |
Apply OASDI payroll tax rate on earnings above $400,000 starting in 2019, 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 2018
that were in excess of that year's current-law taxable maximum; and (2) a formula
factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Larson 2015) | memo (Larson 2014) |
1.88 | 2.34 | 66% | 52% | |
E2.14 |
Apply OASDI payroll tax rate on earnings above $250,000 starting in 2019, 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 2018
that were in excess of that year's current-law taxable maximum; and (2) a formula
factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Lawson) |
2.11 | 2.34 | 75% | 52% | |
E2.15 |
Apply OASDI payroll tax rate on earnings above $300,000 starting in 2019,
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 2018 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) |
2.00 | 2.28 | 71% | 51% | |
E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2018-2027). Provide benefit credit for earnings
up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.77 | 0.64 | 27% | 14% | |
E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2018-2027). Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.10 | 35% | 25% | |
E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2018
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) |
0.63 | 0.66 | 22% | 15% | |
E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning
in 2020 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) |
0.75 | 1.10 | 26% | 25% | |
E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in
2019 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) |
0.64 | 0.77 | 23% | 17% | |
E3.8 |
Beginning in 2025, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017 (about $274,500 in 2025), with
the threshold wage-indexed after 2025. 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 | 7% | 4% | |
E3.9 |
Beginning in 2025, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017 (about $274,500 in 2025), with
the threshold wage-indexed after 2025. Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.25 | 0.30 | 9% | 7% | |
E3.10 |
Beginning in 2025, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017 (about $411,600 in 2025), with
the threshold wage-indexed after 2025. Provide proportional benefit credit
for additional earnings taxed, based on the payroll tax rate applied to the
additional earnings divided by the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.14 | 0.12 | 5% | 3% | |
E3.11 |
Beginning in 2025, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017 (about $411,600 in 2025), with
the threshold wage-indexed after 2025. Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.19 | 0.22 | 7% | 5% | |
E3.12 |
Beginning in 2025, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017 (about $548,700 in 2025), with
the threshold wage-indexed after 2025. Provide proportional benefit credit
for additional earnings taxed, based on the payroll tax rate applied to the
additional earnings divided by the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.12 | 0.09 | 4% | 2% | |
E3.13 |
Beginning in 2025, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017 (about $548,700 in 2025), with
the threshold wage-indexed after 2025. Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.15 | 0.18 | 5% | 4% | |
E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2018. For the employee payroll tax (6.2 percent) and for benefit
credit purposes, beginning in 2018, 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) |
1.43 | 1.38 | 51% | 31% | |
E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject to
the payroll tax (phased in 2018-2027). In addition, apply a tax rate of 6.2 percent
for earnings above the revised taxable maximum (phased in from 2018-2027). Provide
benefit credit for earnings taxed up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.39 | 1.35 | 49% | 30% | |
E3.16 |
Beginning in 2019, apply 4 percent payroll tax rate on earnings above the wage-indexed
equivalent of $400,000 in 2015 (about $457,200 in 2019), with the threshold wage-indexed
after 2019. 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
$457,200 and $571,500 in 2019 (with thresholds wage-indexed after 2019); and (2) a formula
factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Larson 2017) | memo (Begich, Murray) |
0.30 | 0.33 | 11% | 7% | |
E3.17 |
Beginning in 2019, 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 | 1.47 | 37% | 33% | |
E3.18 |
Increase the taxable maximum linearly over 4 years to $212,700 for 2022. After 2022,
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) |
0.57 | 0.64 | 20% | 14% | |
E3.19 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in linearly from 2019-2024). Provide benefit credit for additional
earnings taxed, using a secondary PIA formula. This secondary PIA formula involves: (1)
an "AIME+" derived from additional annual earnings taxed over the current-law taxable
maximum; and (2) a formula factor of 2.5 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Ribble) |
0.97 | 1.06 | 34% | 24% |
Category: Provisions Affecting Coverage of Employment (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
F1 |
Starting in 2018, 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) |
0.17 | -0.18 | 6% | -4% | |
F2 |
Starting in 2018, 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) |
-0.52 | -0.71 | -18% | -16% | |
F3 |
Expand covered earnings to include employer and employee premiums for
employer-sponsored group health insurance (ESI). Starting in 2021, phase
out the OASDI payroll tax exclusion for ESI premiums. Set an exclusion
level at the 75th percentile of premium distribution in 2021, with amounts
above that subject to the payroll tax. Reduce the exclusion level each year
by 10 percent of the 2021 exclusion level until fully eliminated in 2031.
Eliminate the excise tax on ESI premiums starting in 2021.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.94 | 0.66 | 33% | 15% | |
F4 |
Expand covered earnings to include contributions to voluntary salary
reduction plans (such as Cafeteria 125 plans and Flexible Spending
Accounts). Starting in 2018, 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) |
0.28 | 0.17 | 10% | 4% | |
F5 |
Tax Reform for Business: Establish a value added tax of 3.0 percent for
2019 and 6.5 percent for 2020 and later. Starting in 2019, reduce the corporate
income tax rate from 35 to 27 percent.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
-0.02 | 0.17 | -1% | 4% | |
F6 |
Apply a 6.2 percent tax on investment income as defined in the Affordable Care
Act (ACA), with unindexed thresholds as in the ACA ($200,000 for single filer,
$250,000 for married filing jointly), starting in 2019. Proceeds go to the OASDI
Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio) | memo (Sanders 2016) | memo (Sanders 2015) |
0.94 | 1.16 | 33% | 26% |
Category: Provisions Affecting Trust Fund Investment in Equities (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
G1 |
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
2019-2033), assuming an ultimate 6.2 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 OASDI Trust Fund reserves in equities (phased in
2019-2033), assuming an ultimate 5.2 percent annual real rate of return on
equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.38 | 0.00 | * | 0% | |
G3 |
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
2019-2033), assuming an ultimate 2.7 percent annual real rate of return on
equities. Thus, the ultimate rate of return on equities is the same as that
assumed for Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.00* | 0.00 | * | 0% | |
G4 |
Invest 15 percent of the OASDI Trust Fund reserves in equities (phased in
2019-2028), assuming an ultimate 6.2 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 OASDI Trust Fund reserves in equities (phased in
2019-2028), assuming an ultimate 2.7 percent annual real rate of return on
equities. Thus, the ultimate rate of return on equities is the same as that
assumed for Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.00* | 0.00 | * | 0% | |
G6 |
Invest 25 percent of the OASDI Trust Fund reserves in equities (phased in
2021-2030), assuming an ultimate 6.2 percent annual real rate of return on
equities.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.33* | 0.00 | * | 0% | |
G7 |
Invest 25 percent of the OASDI Trust Fund reserves in equities (phased in
2021-2030), assuming an ultimate 2.7 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 (2018 Trustees Report intermediate assumptions) | ||||||
Current law shortfall in long-range actuarial balance is 2.84 percent of payroll and in annual balance for the 75th year is 4.32 percent of payroll. | ||||||
H2 |
Starting in 2019, tax Social Security benefits in a manner similar to
private pension income. Phase out the lower-income thresholds during
2019-2038.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.19 | 0.15 | 7% | 4% | |
H3 |
Starting in 2020, 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) |
-0.05 | -0.10 | -2% | -2% | |
H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for single
filers and $100,000 for joint filers starting in 2020. 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) |
-0.10 | -0.01 | -4% | -0% | |
H5 |
Beginning in 2025, 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) |
-0.45 | -0.99 | -16% | -23% | |
H7 |
Replace the current-law thresholds for federal income taxation of OASDI benefits
with a single set of thresholds at $50,000 for single filers and $100,000 for
joint filers for taxation of up to 85 percent of OASDI benefits, effective for
tax year 2020. 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 2017) |
-0.16 | -0.01 | -6% | -0% |