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Summary of Provisions That Would Change the Social Security Program |
Estimates based on the intermediate assumptions of the 2016 Trustees Report
Printer-friendly Version (PDF) |
Description of proposed provisions | Change from present 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 (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
A1 |
Starting December 2017, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.75 | 2.31 | 66% | 53% | |
A2 |
Starting December 2017, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.91 | 1.21 | 34% | 28% | |
A3 |
Starting December 2017, 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 (FY 2014 Budget) | memo (Chaffetz) | memo (Becerra) | memo (Fiscal Commission) | memo (Bipartisan Policy Center 2010) | memo (Social Security Advisory Board) |
0.55 | 0.74 | 21% | 17% | |
A4 |
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. 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) |
0.41 | 0.55 | 15% | 13% | |
A5 |
Starting December 2017, 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) |
-0.09 | -0.11 | -3% | -2% | |
A6 |
Starting December 2018, 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 (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) |
-0.38 | -0.52 | -14% | -12% | |
A7 |
Starting December 2017, 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) |
1.64 | 2.18 | 62% | 50% | |
Category: Provisions Affecting Level of Monthly Benefits (PIA) (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI
benefits in 2023: 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) |
2.77 | 7.79 | 104% | 179% | |
B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2023: 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) |
1.50 | 4.25 | 56% | 98% | |
B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2023: 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) |
1.25 | 3.53 | 47% | 81% | |
B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2023: 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 | 2.64 | 38% | 61% | |
B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2023: 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) |
0.71 | 1.68 | 27% | 39% | |
B1.6 (2020) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2020: 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) |
1.51 | 3.96 | 57% | 91% | |
B1.6 (2025) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI benefits in 2025: Create a new bend point
at the 30th percentile of the AIME distribution of newly retired workers. Maintain
current-law benefits for earners at the 30th percentile and below. Reduce the 32
and 15 percent factors above the 30th percentile such that the initial benefit for
a worker with AIME equal to the taxable maximum grows by inflation rather than the
growth in the SSA average wage index. Disabled workers are: (a) not affected prior
to normal retirement age; and (b) subject to a proportional reduction in benefits,
based on the worker's years of disability, upon conversion to retired-worker
beneficiary status.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) |
1.19 | 3.63 | 45% | 84% | |
B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals newly
eligible for OASI benefits in 2024 through 2061: 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) |
0.99 | 2.55 | 37% | 59% | |
B1.8 |
Progressive price indexing (50th percentile) of PIA factors for individuals newly
eligible for OASI benefits in 2021 through 2060: 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) |
0.97 | 2.27 | 36% | 52% | |
B2.1 |
Beginning with those newly eligible for OASI benefits in 2026, multiply the PIA factors by
the ratio of life expectancy at 67 for 2021 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) |
0.53 | 1.68 | 20% | 39% | |
B3.1 |
Beginning with those newly eligible for OASDI benefits in 2017, multiply the 32 and 15
percent PIA factors each year by 0.987. Stop reductions after 2047, when the factors
reach 21 percent and 10 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.53 | 2.92 | 57% | 67% | |
B3.2 |
Beginning with those newly eligible for OASI benefits in 2024, multiply the 90 and 32
percent PIA factors each year by 0.9925 and 0.982, respectively. Stop reductions after
2061. Beginning with those newly eligible for OASI benefits in 2019, multiply the 15
factor by 0.982. Stop reduction of the 15 factor after 2056. 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. Child beneficiaries and spouses with a child in care
under the OASI program are not affected by this proposal.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
2.04 | 5.20 | 77% | 120% | |
B3.3 |
Beginning with those newly eligible for OASDI benefits in 2017, use a modified primary
insurance amount (PIA) formula. The modified formula: (1) increases the first bend
point to the equivalent of $800 in 2009; (2) places a new bend point 75 percent of the
way between the reset first bend point and the current-law second bend point; (3) lowers
the PIA factor between the new bend point and the upper bend point from 32 percent to 20
percent; and (4) lowers the factor above the upper bend point from 15 percent to 10 percent.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.20 | 0.27 | 8% | 6% | |
B3.4 |
Beginning with those newly eligible for OASDI benefits in 2020, multiply all PIA factors
each year by 0.991. Stop reductions after 2048. 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 (Warshawsky) |
1.51 | 3.11 | 57% | 72% | |
B3.5 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly eligible
for OASI benefits in 2019, continuing through 2056, and resuming in 2077: 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 is reduced
by 1.21 percent per year as compared to current law (for the years that progressive indexing applies).
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 (NRC/NAPA) |
1.31 | 3.06 | 49% | 70% | |
B3.6 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly
eligible for OASI benefits in 2019, continuing through 2068: 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 is reduced by 1.21 percent per year as compared to current
law (for the years that progressive indexing applies). 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 (NRC/NAPA) |
1.40 | 3.51 | 53% | 81% | |
B3.7 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly
eligible for OASI benefits in 2019, continuing through 2028, and resuming in 2067:
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 is reduced by 1.21 percent per year as compared
to current law (for the years that progressive indexing applies). 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 (NRC/NAPA) |
0.61 | 1.58 | 23% | 36% | |
B3.8 |
Beginning with those newly eligible for OASDI benefits in 2023, 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 2056: 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) |
0.91 | 2.23 | 34% | 51% | |
B3.9 |
Beginning with those newly eligible for OASDI benefits in 2029, gradually reduce the 15
percent PIA factor in each year so that it reaches 10 percent for those newly eligible
in 2058 and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.08 | 0.22 | 3% | 5% | |
B3.10 |
Beginning with those newly eligible for OASDI benefits in 2023, gradually increase the
first PIA bend point in each year so that it is 15 percent higher for those newly
eligible in 2037 and later.
graph | table | pdf-graph | pdf-table | memo (Sanders 2016) | memo (Schatz) | memo (Sanders 2015) | memo (Harkin 2013) | memo (Harkin 2012) |
-0.37 | -0.71 | -14% | -16% | |
B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all beneficiaries
eligible as of January 2018 and for those newly eligible for benefits after 2018.
graph | table | pdf-graph | pdf-table | memo (Larson 2015) | memo (Larson 2014) |
-0.24 | -0.26 | -9% | -6% | |
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 2017-2021.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.28 | 0.39 | 10% | 9% | |
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 2017-2025.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.44 | 0.65 | 17% | 15% | |
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 2018-2026.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.60 | 0.92 | 22% | 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 2018 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% | |
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 2034, and is phased in
for new eligibles in 2025 through 2033. 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 | -1% | 0% | |
B5.2 |
Beginning for those newly eligible in 2017, 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 $1,226 in
2015). For those with under 30 years of coverage, the PIA per year of coverage
over 10 years is $1,226/20 = $61.30. (c) Index the initial PIA per year of
coverage by wage growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (Sanders 2016) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (National Academy of Social Insurance) |
-0.14 | -0.21 | -5% | -5% | |
B5.3 |
Beginning for those newly eligible in 2017, 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 $1,226 in 2015). For those with
under 30 years of coverage, the PIA per year of coverage over 10 years is
$1,226/20 = $61.30. (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 | -0.31 | -8% | -7% | |
B5.4 |
Beginning for those newly eligible in 2023, reconfigure the special minimum
benefit: (a) A year of coverage is defined as a year in which 4 quarters of
coverage are earned. (b) At implementation, set the PIA for 30 years of
coverage equal to 125 percent of the monthly poverty level (about $1,226 in
2015). For those with under 30 years of coverage, the PIA per year of coverage
over 10 years is $1,226/20 = $61.30. (c) From 2015 to the year of implementation,
2023, 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% | -5% | |
B5.5 |
Beginning for those newly eligible in 2018, 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 $1,260 in 2015). For those with under
30 years of coverage, the PIA per year of coverage over 19 years is $1,260/11 =
$114.50. (c) Index the initial PIA per year of coverage by wage growth for
successive cohorts. (d) Scale work requirements for disabled workers, based on
the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
-0.06 | -0.09 | -2% | -2% | |
B5.6 |
Beginning for those newly eligible in 2017, 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 $990 in 2016). For those with
under 30 years of coverage, the PIA per year of coverage over 10 years is
$990/20 = $49.50. (c) From 2016 to the year of implementation, 2017, 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 | -0.15 | -4% | -3% | |
B5.7 |
Beginning for those newly eligible in 2019, 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% | |
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 2017 or who reaches
their 85th birthday after the beginning of 2017.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.11 | -0.15 | -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 2017 or who reaches
their 85th birthday after the beginning of 2017. 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 | -0.15 | -4% | -4% | |
B6.3 |
Provide an increase in the benefit level of any beneficiary who is 85 or
older at the beginning of 2018 or who reaches their 85th birthday after
the beginning of 2018. Increase the beneficiary's PIA based on an amount
equal to the average retired-worker PIA at the end of 2017, 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 2018 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) |
-0.13 | -0.19 | -5% | -4% | |
B6.4 |
Starting in 2017, 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 (Fiscal Commission) |
-0.15 | -0.21 | -6% | -5% | |
B6.5 |
Starting in 2019, 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 | -9% | -7% | |
B6.6 |
Starting in 2023, 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 2023 (over age 76 for retirees), phase in the PIA
enhancement over 10 years starting in 2023. 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% | |
B7.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in 2017 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.37 | 0.50 | 14% | 12% | |
B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2017 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.61 | 0.84 | 23% | 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 $23,865 in 2015). The credits are available for all past years
to newly eligible retired-worker and disabled-worker beneficiaries starting in
2017. The 5 years are chosen to yield the largest increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.23 | -0.32 | -9% | -7% | |
B7.4 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of
2017 and for those newly eligible for benefits after the beginning of 2017.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.31 | -0.33 | -12% | -8% | |
B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of
2017 and for those newly eligible for benefits after the beginning of 2017.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.77 | -0.83 | -29% | -19% | |
B7.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of
2017 and for those newly eligible for benefits after the beginning of 2017.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-3.07 | -3.33 | -116% | -77% | |
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 2021 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 2021, based on changes in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.31 | 0.43 | 12% | 10% | |
Category: Provisions Affecting Retirement Age (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 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) |
0.36 | 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) |
0.45 | 0.69 | 17% | 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) |
0.52 | 1.53 | 20% | 35% | |
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 (Chaffetz) |
1.06 | 2.18 | 40% | 50% | |
C1.5 |
Starting in 2017, 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) |
0.67 | 1.25 | 25% | 29% | |
C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for
those age 62 starting in 2018 and ending in 2035 (EEA reaches 65 for
those age 62 in 2035).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.07 | -0.42 | -3% | -10% | |
C2.2 |
After the normal retirement age (NRA) reaches 67 for those age 62 in
2022, index the NRA to maintain a constant ratio of expected retirement
years (life expectancy at NRA) to potential work years (NRA minus 20).
We assume the NRA will increase 1 month every 2 years. Also, raise the
earliest eligibility age (EEA) for retired-workers, aged widow(er)s, and
disabled widow(er)s by the same amount as the NRA starting for those
attaining EEA in 2017.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) | memo (Warshawsky) |
0.51 | 1.41 | 19% | 32% | |
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) |
0.40 | 1.14 | 15% | 26% | |
C2.4 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022,
increase both the NRA and the earliest eligibility age (EEA) by 36/47 of a
month per year until the NRA and EEA reach 70 and 65 respectively. For each
year, the computed NRA and EEA round down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis) |
0.74 | 1.92 | 28% | 44% | |
C2.5 |
Increase the normal retirement age (NRA) 3 months per year starting for
those age 62 in 2017 until the NRA reaches 70 in 2032. 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) |
1.43 | 2.71 | 54% | 62% | |
C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 in 2020-21 to 68 and 63, respectively, and then by
3 months per year in 2022-25 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.89 | 1.15 | 33% | 26% | |
C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 starting in 2017 by 3 months per year until EEA
reaches 64 in 2024 and NRA reaches 69 in 2028.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.85 | 1.15 | 32% | 26% | |
C2.8 |
Starting in 2019, 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 27.5 percent for those age 62
in 2019) phased in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.44 | 0.82 | 16% | 19% | |
Category: Provisions Affecting Family Member Benefits (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
D1 |
Beginning in 2017, 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 (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 2017, until the percent reaches 33 in 2033.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
0.12 | 0.18 | 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 2018 and those becoming eligible after 2018.
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 2018 and those becoming eligible
after 2018.
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
-0.12 | -0.12 | -4% | -3% | |
Category: Provisions Affecting Payroll Taxes (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.2 percent in 2017 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.67 | 2.77 | 100% | 64% | |
E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.2 percent in
2029-2058, and to 18.0 percent in years 2059 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.03 | 5.42 | 114% | 125% | |
E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in
2017 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -36% | -23% | |
E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2022-2041, until the rate reaches 14.4 percent in
2041 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance) |
1.45 | 1.98 | 55% | 46% | |
E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2019,
12.9 percent in 2027, 13.1 in percent in 2037, 13.9 percent in 2047, 13.5 percent
in 2057, and 13.3 percent in 2067 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.76 | 0.91 | 29% | 21% | |
E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2019,
12.9 percent in 2027, 13.3 in percent in 2037, 13.8 percent in 2047, 14.4 percent
in 2067, and 14.5 percent in 2082 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.08 | 2.07 | 41% | 48% | |
E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2019,
13.0 percent in 2032, 13.3 in percent in 2047, 14.0 percent in 2067, 14.5 percent
in 2077, and 14.7 percent in 2087 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.88 | 2.24 | 33% | 52% | |
E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2019-2024, until the rate reaches 13.0 percent for
2024 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.54 | 0.60 | 20% | 14% | |
E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2020-2043, until the rate reaches 14.8 percent in 2043.
Then increase the payroll tax rate an additional 0.1 percentage point in
each year from 2082-2086, until the rate reaches 15.3 percent for 2086
and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2015) |
1.77 | 2.85 | 67% | 66% | |
E2.1 |
Eliminate the taxable maximum in years 2017 and later, and apply full 12.4
percent payroll tax rate to all earnings. Do not provide benefit credit for
earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (DeFazio 2015) | memo (Social Security Advisory Board) |
2.36 | 2.45 | 89% | 56% | |
E2.2 |
Eliminate the taxable maximum in years 2017 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) |
1.90 | 1.61 | 72% | 37% | |
E2.3 |
Eliminate the taxable maximum in years 2017 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, adding a bend point at the current-law
taxable maximum and applying a formula factor of 3 percent for AIME above this
new bend point.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
2.16 | 2.15 | 81% | 49% | |
E2.4 |
Eliminate the taxable maximum for years 2023 and later (phased in 2017-2022),
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 2016
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 2015) | memo (Deutch 2010) |
2.19 | 2.34 | 82% | 54% | |
E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting
in 2017, 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 2016) | memo (Sanders 2015) | memo (Sanders 2013) | memo (DeFazio 2011) |
2.19 | 2.45 | 82% | 56% | |
E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable
maximum starting in 2017. Do not provide benefit credit for earnings above
the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.61 | 0.63 | 23% | 15% | |
E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable
maximum starting in 2017. Do not provide benefit credit for earnings above
the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Wexler) |
1.19 | 1.24 | 45% | 29% | |
E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable
maximum for years 2019-2066, and a 3 percent rate for years 2067 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 | 17% | 14% | |
E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum:
2.0 percent in 2019, 3.0 percent in 2032, 3.5 percent in 2047, 4.5 percent in
2057, and 5.5 percent in 2067 and later. Do not provide benefit credit for
earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.72 | 1.13 | 27% | 26% | |
E2.10 |
Eliminate the taxable maximum in years 2027 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 1.24 percent in
2018, 2.48 percent in 2019, and so on, up to 12.40 percent in 2027. Provide
benefit credit for earnings above the current-law taxable maximum, adding a bend
point at the current-law taxable maximum and applying a formula factor of 5 percent
for AIME above this new bend point.
graph | table | pdf-graph | pdf-table | memo (Harkin 2012) |
1.92 | 2.05 | 72% | 47% | |
E2.11 |
Eliminate the taxable maximum in years 2022 and later. Phase in elimination by
taxing all earnings above the current-law taxable maximum at: 2.48 percent in 2018,
4.96 percent in 2019, and so on, up to 12.40 percent in 2022. 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 (Schatz) | memo (Harkin 2013) |
2.10 | 2.16 | 79% | 50% | |
E2.12 |
Eliminate the taxable maximum in years 2028 and later. Phase in elimination by taxing
all earnings above the current-law taxable maximum at: 1.24 percent in 2019, 2.48
percent in 2020, and so on, up to 12.40 percent in 2028. 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) |
1.93 | 2.15 | 73% | 49% | |
E2.13 |
Apply OASDI payroll tax rate on earnings above $400,000 starting in 2018,
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 2017 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 | 2.33 | 71% | 54% | |
E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2017-2026). 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 | 29% | 15% | |
E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2017-2026). Do not provide benefit credit for
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.98 | 1.10 | 37% | 25% | |
E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2018-2023). Provide benefit credit for earnings
up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.78 | 0.64 | 29% | 15% | |
E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed
dollars), phased in 2017-2019. Provide benefit credit for earnings up to the
revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.11 | 0.08 | 4% | 2% | |
E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning
in 2017 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 | 0.67 | 24% | 15% | |
E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning
in 2019 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) |
0.74 | 1.10 | 28% | 25% | |
E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in
2018 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 | 24% | 18% | |
E3.8 |
Beginning in 2024, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2024. 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) |
0.19 | 0.16 | 7% | 4% | |
E3.9 |
Beginning in 2024, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $200,000 in 2017, with the threshold wage-indexed
after 2024. 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 | 0.29 | 9% | 7% | |
E3.10 |
Beginning in 2024, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $300,000 in 2017, with the threshold wage-indexed
after 2024. 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 2024, apply 2 percent payroll tax rate on earnings over
the wage-indexed equivalent of $300,000 in 2017, with the threshold
wage-indexed after 2024. 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 2024, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2024. Provide proportional benefit credit for additional earnings taxed,
based on the payroll tax rate applied to the additional earnings divided by the
full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.12 | 0.10 | 4% | 2% | |
E3.13 |
Beginning in 2024, apply 2 percent payroll tax rate on earnings over the
wage-indexed equivalent of $400,000 in 2017, with the threshold wage-indexed
after 2024. 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 | 6% | 4% | |
E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent)
beginning in 2017. For the employee payroll tax (6.2 percent) and for benefit
credit purposes, beginning in 2017, 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) |
1.44 | 1.38 | 54% | 32% | |
E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject
to the payroll tax (phased in 2017-2026). In addition, apply a tax rate of
6.2 percent for earnings above the revised taxable maximum (phased in from
2017-2026). Provide benefit credit for earnings taxed up to the revised
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging) |
1.40 | 1.35 | 53% | 31% | |
E3.16 |
Beginning in 2018, apply 4 percent payroll tax rate on earnings above the
wage-indexed equivalent of $400,000 in 2015, with the threshold wage-indexed
after 2018. 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 (with thresholds wage-indexed after 2018); and (2) a
formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Begich, Murray) |
0.32 | 0.34 | 12% | 8% | |
E3.17 |
Beginning in 2018, 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) |
1.05 | 1.48 | 40% | 34% | |
Category: Provisions Affecting Coverage of Employment (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
F1 |
Starting in 2017, 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) |
0.15 | -0.15 | 6% | -3% | |
F2 |
Starting in 2017, 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) |
-0.48 | -0.65 | -18% | -15% | |
F3 |
Expand covered earnings to include employer and employee premiums for
employer-sponsored group health insurance (ESI). Starting in 2020,
phase out the OASDI payroll tax exclusion for ESI premiums. Set an
exclusion level at the 75th percentile of premium distribution in 2020,
with amounts above that subject to the payroll tax. Reduce the exclusion
level each year by 10 percent of the 2020 exclusion level until fully
eliminated in 2030. Eliminate the excise tax on ESI premiums scheduled
to begin in 2020.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.87 | 0.61 | 33% | 14% | |
F4 |
Expand covered earnings to include contributions to voluntary salary
reduction plans (such as Cafeteria 125 plans and Flexible Spending
Accounts). Starting in 2017, 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) |
0.26 | 0.16 | 10% | 4% | |
F5 |
Tax Reform for Business: Establish a value added tax of 3.0 percent
for 2018 and 6.5 percent for 2019 and later. Starting in 2018, 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 2018. Proceeds go to the OASDI
Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Sanders 2016) | memo (Sanders 2015) |
0.93 | 1.15 | 35% | 26% | |
Category: Provisions Affecting Trust Fund Investment in Equities (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
G1 |
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased
in 2017-2031), assuming an ultimate 6.2 percent annual real rate of
return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.53* | 0.00 | * | 0% | |
G2 |
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
2017-2031), assuming an ultimate 5.2 percent annual real rate of return
on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.39* | 0.00 | * | 0% | |
G3 |
Invest 40 percent of the OASDI Trust Fund reserves in equities (phased in
2017-2031), 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
2017-2026), assuming an ultimate 6.2 percent annual real rate of return
on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.22* | 0.00 | * | 0% | |
G5 |
Invest 15 percent of the OASDI Trust Fund reserves in equities (phased in
2017-2026), 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
2019-2028), assuming an ultimate 6.2 percent annual real rate of return on
equities.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.34* | 0.00 | * | 0% | |
G7 |
Invest 25 percent of the 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 (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 present-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 (2016 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.66 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll. | ||||||
H1 |
Starting in 2017, tax Social Security benefits in a manner similar to
private pension income. Phase out the lower-income thresholds during
2017-2026.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.21 | 0.15 | 8% | 3% | |
H2 |
Starting in 2017, tax Social Security benefits in a manner similar to private
pension income. Phase out the lower-income thresholds during 2017-2036.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.19 | 0.15 | 7% | 3% | |
H3 |
Starting in 2018, 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) |
-0.02 | -0.06 | -1% | -1% | |
H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for single
filers and $100,000 for joint filers starting in 2018. 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) |
-0.12 | -0.01 | -4% | 0% |
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