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

*Estimates based on the intermediate assumptions of
the 2010 Trustees Report*

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

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

Category: Cost of Living Adjustment (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

A1 | Beginning in December 2011,
reduce the annual COLA by 1 percentage point. graph | table | pdf-graph | pdf-table | memo |
1.58 | 2.19 | -0.34 | -1.93 | |

A2 | Beginning in December 2011,
reduce the annual COLA by 0.5 percentage point. graph | table | pdf-graph | pdf-table | memo |
0.82 | 1.15 | -1.10 | -2.97 | |

A3 (2011) |
Starting with the December 2011 cost-of-living adjustment (COLA),
compute the COLA using a chained version of the consumer price
index for wage and salary workers (CPI-W). This new computation
is estimated to result in an annual COLA that is 0.3 percentage
point less, on average. graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) | memo (Fiscal Commision) |
0.50 | 0.70 | -1.42 | -3.42 | |

A3 (2012) |
Starting with the December 2012 cost-of-living adjustment (COLA), compute
the COLA using a chained version of the consumer price index for wage and
salary workers (CPI-W). This new computation is estimated to result in an
annual COLA that is 0.3 percentage point less, on average. graph | table | pdf-graph | pdf-table | memo |
0.49 | 0.70 | -1.43 | -3.42 | |

A4 |
Starting with the December 2013 cost-of-living adjustment (COLA),
compute the COLA using a chained version of the consumer price
index for wage and salary workers (CPI-W). This new computation
is estimated to result in an annual COLA that is 0.3 percentage
point less, on average. The new COLA would not apply to DI benefits
and would apply for all OASI benefits, except for those who are
converted from disabled worker to retired worker status.
graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.50 | -1.56 | -3.62 | |

A5 |
Beginning December 2011, add 1 percentage point to the annual
cost-of-living adjustment for OASDI monthly benefits for
beneficiaries who have lived past a "specified age", which
reflects their age 65 life expectancy. The "specified age"
is based on the beneficiary's year of birth and is determined
as the sum of: (1) 65 and (2) the unisex cohort life expectancy
at age 65 for the Social Security area population with the same
year of birth as the beneficiary.
graph | table | pdf-graph | pdf-table | memo |
-0.08 | -0.11 | -2.00 | -4.23 | |

A6 |
Starting with the December 2012 cost-of-living adjustment (COLA),
compute the COLA based on changes in the Consumer Price Index for
the Elderly (CPI-E). Use of this CPI series is estimated to result
in an annual COLA that is 0.2 percentage point higher, on average,
than using the consumer price index for urban wage and clerical
workers (CPI-W).
graph | table | pdf-graph | pdf-table | memo |
-0.34 | -0.49 | -2.26 | -4.61 | |

Category: Provisions Affecting Level of Monthly Benefits (PIA) (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

B1.1 |
Beginning with those newly eligible for OASDI benefits in 2017 and later,
reduce PIA formula factors so that benefits grow by inflation rather than
by increases in real wages. graph | table | pdf-graph | pdf-table | memo |
2.51 | 7.50 | 0.59 | 3.38 | |

B1.2 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2017. Create new bend point at the 30th
percentile of earners. Maintain current-law benefits for earners
at the 30th percentile and below and reduce upper 2 formula
factors (32% and 15%) such that maximum worker benefit grows by
inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
1.43 | 4.11 | -0.49 | -0.01 | |

B1.3 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2017. Create new bend point at the 40th
percentile of earners. Maintain current-law benefits for earners
at the 40th percentile and below and reduce upper 2 formula factors
(32% and 15%) such that maximum worker benefit grows by inflation
rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
1.19 | 3.40 | -0.73 | -0.72 | |

B1.4 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2017. Create new bend point at the 50th
percentile of earners. Maintain current-law benefits for earners
at the 50th percentile and below and reduce upper 2 formula
factors (32% and 15%) such that maximum worker benefit grows by
inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
0.93 | 2.49 | -0.99 | -1.63 | |

B1.5 | Progressive price indexing of PIA
formula factors beginning with individuals newly eligible for
OASDI benefits in 2017. Create new bend point at the 60th
percentile of earners. Maintain current-law benefits for earners
at the 60th percentile and below and reduce upper 2 formula
factors (32% and 15%) such that maximum worker benefit grows by
inflation rather than the growth in average wages. graph | table | pdf-graph | pdf-table | memo |
0.64 | 1.53 | -1.28 | -2.59 | |

B1.6 (2014) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2014. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages.
Disability benefits are not affected by the proposal. Disabled worker
beneficiaries, upon attaining normal retirement age, would be subject
to a proportional reduction in benefits based on the worker's years
of disability. In addition, the reduction to the upper 2 formula
factors is suspended for any year in which sustainable solvency over
the next 75 years is expected. With this provision taken alone,
suspension is not expected within the next 75 years. graph | table | pdf-graph | pdf-table | memo |
1.48 | 3.85 | -0.44 | -0.27 | |

B1.6 (2019) |
Progressive price indexing of PIA formula factors beginning with
individuals newly eligible for OASI benefits in 2019. Create new
bend point at the 30th percentile of earners. Maintain current-law
benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker
benefit grows by inflation rather than the growth in average wages.
Disability benefits are not affected by the proposal. Disabled worker
beneficiaries, upon attaining normal retirement age, would be subject
to a proportional reduction in benefits based on the worker's years
of disability.
graph | table | pdf-graph | pdf-table | memo |
1.13 | 3.47 | -0.79 | -0.65 | |

B1.7 |
Progressive price indexing of PIA formula factors for individuals newly
eligible for OASI benefits in 2018 through 2055. Create new bend point at
the 40th percentile of career-average earnings for new retirees. Maintain
current-law benefit credit for career-average earnings up to the 40th
percentile. Reduce PIA formula factors (32% and 15%) that apply above the
new bend point such that the maximum worker benefit grows with price inflation
from one generation to the next rather than with growth in the average wage.
Disability (DI) benefits are not affected by the proposal. Disabled worker
beneficiaries, upon attaining normal retirement age, would be subject to a
proportional reduction in benefits based on the worker's years of disability.
Hold harmless from this provision young survivors (children of deceased workers
and surviving spouses with a child in care).
graph | table | pdf-graph | pdf-table | memo |
0.91 | 2.35 | -1.01 | -1.77 | |

B2.1 (2020) |
For OASI beneficiaries becoming eligible for benefits in 2020 and
later, multiply the PIA factors by the ratio of life expectancy at
67 for 2015 to the life expectancy at age 67 for the 4th year prior
to the year of benefit eligibility. Unisex life expectancies, based
on period life tables, would be used as projected by SSA's Office of
the Chief Actuary. Disability benefits are not affected by the proposal.
Disabled worker beneficiaries, upon attaining normal retirement age,
would be subject to a proportional reduction in benefits based on the
worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
0.55 | 1.87 | -1.37 | -2.24 | |

B2.1 (2023) |
For OASI beneficiaries becoming eligible for benefits in 2023 and later,
multiply the PIA factors by the ratio of life expectancy at 67 for 2018
to the life expectancy at age 67 for the 4th year prior to the year of
initial benefit eligibility. Unisex life expectancies, based on period
life tables as computed by SSA's Office of the Chief Actuary, would be
used in determining the ratio. Disability benefits are not affected by
the proposal. Disabled worker beneficiaries, upon attaining normal
retirement age, would be subject to a proportional reduction in benefits
based on the proportion of years at ages 22 through 61 not disabled.
graph | table | pdf-graph | pdf-table | memo |
0.48 | 1.75 | -1.44 | -2.37 | |

B3.1 |
For each year from 2011-2041, multiply the 32 and 15 percent formula
factors by 0.987, reducing the factors to 21 percent and 10 percent
respectively, for new eligibles in 2041 and later. graph | table | pdf-graph | pdf-table | memo |
1.49 | 2.88 | -0.43 | -1.24 | |

B3.2 |
Beginning with those newly eligible in 2018, multiply the 90 and 32 PIA
factors each year by 0.9925 and 0.982, respectively. Stop reductions in
2055. Beginning with those newly eligible in 2013, multiply the 15 factor
by 0.982. Stop reduction of the 15 factor in 2050. Disabled workers will have present
law scheduled benefit and proportional reduction at conversion to retired
worker benefits at normal retirement age, based on years of disability. graph | table | pdf-graph | pdf-table | memo |
2.02 | 5.22 | 0.10 | 1.10 | |

B3.3 |
For all individuals becoming eligible for OASDI benefits in 2011 and
later, use a modified primary insurance amount (PIA) formula. The
modified formula would increase the first bend point to the equivalent
of $800 in 2009. Also, a new bend point would be placed between the
reset first bend point and the current-law second bend point. The new
bend point would be equal to the reset first bend point plus 75 percent
of the difference between the bend points. The PIA formula factor
between the new bend point and the upper bend point would be lowered
from 32% to 20%. The PIA formula factor above the upper bend point would
be lowered from 15% to 10%.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.30 | -1.70 | -3.82 | |

B3.4 |
Multiply all PIA formula factors successively by 0.991 for new benefit
eligibility in each year 2014 through 2042. Disabled workers and young
survivors (surviving spouses with a child-in-care and survivor children)
would not be affected by this provision. Upon conversion from disabled
worker to retired worker benefits, benefit levels would be proportionally
reduced based on the fraction of years the individual was not disabled
between ages 22 and 62.
graph | table | pdf-graph | pdf-table | memo |
1.44 | 3.06 | -0.48 | -1.06 | |

B3.5 |
Progressive indexing of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2013, continuing through 2050, and resuming in
2071. Create new bend point at the 30th percentile of earners. Maintain
current-law benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker benefit is
reduced by 1.2 percent per year as compared to current law, for the years that
progressive indexing applies. Disability benefits are not affected by the
proposal. Disabled worker beneficiaries, upon attaining normal retirement age,
would be subject to a proportional reduction in benefits based on the worker's
years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.27 | 2.97 | -0.65 | -1.15 | |

B3.6 |
Progressive indexing of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2013 through 2062. Create new bend point at the
30th percentile of earners. Maintain current-law benefits for earners at the
30th percentile and below and reduce upper 2 formula factors (32% and 15%) such
that maximum worker benefit is reduced by 1.2 percent per year as compared to
current law, for the years that progressive indexing applies. Disability benefits
are not affected by the proposal. Disabled worker beneficiaries, upon attaining
normal retirement age, would be subject to a proportional reduction in benefits
based on the worker's years of disability.
graph | table | pdf-graph | pdf-table | memo |
1.32 | 3.21 | -0.60 | -0.91 | |

B3.7 |
Progressive indexing of PIA formula factors beginning with individuals newly
eligible for OASI benefits in 2013, continuing through 2022, and then resuming
in 2061. Create new bend point at the 30th percentile of earners. Maintain
current-law benefits for earners at the 30th percentile and below and reduce
upper 2 formula factors (32% and 15%) such that maximum worker benefit is
reduced by 1.2 percent per year as compared to current law, for the years that
progressive indexing applies. Disability benefits are not affected by the proposal.
Disabled worker beneficiaries, upon attaining normal retirement age, would be
subject to a proportional reduction in benefits based on the worker's years of
disability.
graph | table | pdf-graph | pdf-table | memo |
0.59 | 1.51 | -1.33 | -2.61 | |

B3.8 |
Create a new bend point at the 50th percentile of new retired and disabled
worker entitlements. Beginning for those newly eligible in 2017, do the
following: a) reduce the 32 percent PIA formula factor below the new bend
point to 30 percent by 2050; b) reduce the 32 percent PIA factor above the new bend
point to 10 percent by 2050; and c) reduce the 15 percent factor to 5 percent by 2050.
graph | table | pdf-graph | pdf-table | memo |
0.86 | 2.12 | -1.06 | -2.00 | |

B3.9 |
Reduce the upper 15-percent PIA formula factor to 10 percent over a 30-year
period from 2023 through 2052. Affects OASI and DI benefit computations.
graph | table | pdf-graph | pdf-table | memo |
0.07 | 0.20 | -1.85 | -3.91 | |

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 2011-2015.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.42 | -1.63 | -3.70 | |

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 2011-2019.
graph | table | pdf-graph | pdf-table | memo |
0.46 | 0.71 | -1.46 | -3.41 | |

B4.3 |
Eliminate dropout years for OASI and DI computation of primary insurance
amount (PIA) for individuals newly eligible for benefits from 2012 to 2020.
Specifically, for OASDI benefit computation, reduce the maximum number of
drop-out years from 5 for benefit eligibility in 2011, with a decrease of
1 computation year in 2012, 2014, 2016, 2018, and 2020.
graph | table | pdf-graph | pdf-table | memo |
0.62 | 1.00 | -1.30 | -3.12 | |

B5.1 |
Increase the PIA to a level such that a worker with 30 years of
earnings at the minimum wage level would receive an adjusted PIA
equal to 120 percent of the Federal poverty level for an aged
individual. This provision would take full effect for all newly
eligible OASDI workers in 2028, and would be phased in for new
eligible in 2019 through 2027. The percentage increase in PIA
would be lowered proportionately for those with fewer than 30
years of earnings, down to no enhancement for workers with 20 or
fewer years of earnings. (Year-of-work requirements are "scaled"
for disabled workers based on their years of potential work from
age 22 to benefit eligibility). The benefit enhancement percentage
would be reduced proportionately for workers with higher average
indexed monthly earnings (AIME), down to no enhancement for those
with AIME at least twice that of a 35-year steady minimum wage earner.
graph | table | pdf-graph | pdf-table | memo |
-0.02 | 0.00 | -1.94 | -4.12 | |

B5.2 |
Beginning in 2011, increase the special minimum benefit by making
the following changes: (a) A year of coverage is defined as a year
in which 4 quarters of coverage are earned. (b) At implementation,
set the PIA for 30 years of coverage equal to 125 percent of the
monthly poverty level (about $1,128 in 2009). The PIA per year of
coverage (after the first 10 years) would be $1,128/20 = $56.40.
(c) Index the initial PIA per year of coverage by wage growth for
successive cohorts, so that the special minimum keeps up with the
wage-indexed benefit formula.
graph | table | pdf-graph | pdf-table | memo |
-0.22 | -0.31 | -2.14 | -4.43 | |

B5.3 |
Beginning in 2011, increase the special minimum benefit by making the
following changes: (a) A year of coverage is defined to be either a
childcare year or a year in which 4 quarters of coverage are earned.
Childcare years are granted to parents who have a child under 5, with
a limit of 8 such years. (b) At implementation, set the PIA for 30
years of coverage equal to 125 percent of the monthly poverty level
(about $1,128 in 2009). The PIA per year of coverage (after the first
10 years) would be $1,128/20 = $56.40. (c) Index the initial PIA per
year of coverage by wage growth for successive cohorts, so that the
special minimum keeps up with the wage-indexed benefit formula.
graph | table | pdf-graph | pdf-table | memo |
-0.31 | -0.44 | -2.23 | -4.55 | |

B5.4 |
Beginning for those newly eligible for benefits in 2017, increase the
special minimum benefit by making the following changes. (a) A year
of coverage is defined as a year in which 4 quarters of coverage are
earned. (b) Set the PIA for 30 years of coverage equal to 125 percent
of the monthly poverty level (about $1,128 in 2009). The PIA per year
of coverage (after the first 10 years) would be $1,128/20 = $56.40.
(c) Increase the PIA per year of coverage from 2009 to the year of
implementation, 2017, using the chain-CPI index; then index the initial
PIA per year of coverage by wage growth for successive cohorts, so that
the special minimum keeps up with the wage-indexed benefit formula. Scale
work requirements for disabled workers based on the years of potential
work (not disabled).
graph | table | pdf-graph | pdf-table | memo |
-0.15 | -0.26 | -2.07 | -4.38 | |

B5.5 |
Reconfigure the special minimum benefit to ensure that an individual with
at least 30 creditable years of earnings (equal to at least 20% of the "old
law taxable maximum") would receive a PIA of 133 percent of the Aged Federal
poverty level, with the formula phased linearly from zero for workers with 19
creditable years to 133 percent of poverty for those with 30 creditable years.
Up to 8 years with own child under the age of 6 could be used as creditable
years, if not otherwise counted as a creditable year. Scale the creditable year
requirements and number of child-care years for disabled workers and workers
dying under age 62 based on the proportion of years from 22 through 61 alive
and not disabled. This provision is effective for individuals newly eligible
for benefits in 2012 and later. Wage-index the poverty level from 2009 up to 2
years prior to benefit eligibility.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.14 | -2.01 | -4.26 | |

B6.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in 2011
and later. graph | table | pdf-graph | pdf-table | memo |
0.36 | 0.49 | -1.56 | -3.62 | |

B6.2 |
Reduce benefits by 5 percent for those newly eligible for benefits
in 2011 and later. graph | table | pdf-graph | pdf-table | memo |
0.60 | 0.82 | -1.32 | -3.30 | |

B6.3 |
Give parents earnings credits for up to five years if they have a child
under 6. The earnings credited for a childcare year would be such that
the resulting earnings assigned to the parents would equal one half of
the Social Security average-wage index -- about $21,542 in 2010. The
credits would be available for all past years to newly eligible
retired-worker and disabled-worker beneficiaries in 2011 and later. The
5 most advantageous years would be used if more than 5 childcare credit
years are possible; that is, the 5 years that make the biggest difference
in indexed earnings.
graph | table | pdf-graph | pdf-table | memo |
-0.28 | -0.41 | -2.20 | -4.52 | |

B6.4 |
Provide a 5 percent increase to the benefit level of any beneficiary who is
85 or older at the beginning of 2011 or who reaches their 85th birthday after
the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-0.09 | -0.14 | -2.01 | -4.26 | |

B6.5 |
Provide the same dollar amount increase to the benefit level of any beneficiary
who is 85 or older at the beginning of 2011 or who reaches their 85th birthday
after the beginning of 2011. The dollar amount of increase equals 5 percent of
the average retired worker benefit in the prior year.
graph | table | pdf-graph | pdf-table | memo |
-0.10 | -0.14 | -2.02 | -4.26 | |

B6.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of 2011
and for those newly eligible for benefits after the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-2.96 | -3.29 | -4.88 | -7.41 | |

B6.7 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2011
and for those newly eligible for benefits after the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-0.74 | -0.82 | -2.66 | -4.94 | |

B6.8 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of 2011
and for those newly eligible for benefits after the beginning of 2011.
graph | table | pdf-graph | pdf-table | memo |
-0.30 | -0.33 | -2.22 | -4.45 | |

B6.9 |
Starting in 2011, provide a 5% uniform benefit increase, beginning 20 years after
eligibility. The benefit increase would be phased in at 1% per year from the 20th
through 24th years after initial benefit eligibility. For disabled workers the
eligibility age would be the initial entitlement year to the benefit. The benefit
increase is equal to 5% 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 |
-0.15 | -0.23 | -2.07 | -4.35 | |

B6.10 |
Provide an increase in the benefit level of any beneficiary who is 85 or older at
the beginning of 2012 or who reaches their 85th birthday after the beginning of
2012. The beneficiary’s PIA would be increased based on an amount equal to the
average retired worker PIA at the end of 2011, or at the end of the year age 80 if
later. The beneficiary’s PIA would be increased by 5 percent of this amount for
those older than 85 at the beginning of 2012 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 |
-0.13 | -0.18 | -2.05 | -4.30 | |

Category: Provisions Affecting Retirement Age (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

C1.1 |
Shorten the hiatus in the normal retirement age (start increasing to age
67 for those age 62 in 2011, rather than those age 62 in 2017).
graph | table | pdf-graph | pdf-table | memo |
0.08 | 0.00 | -1.84 | -4.12 | |

C1.2 |
Shorten the hiatus in the normal retirement age (start increasing to age
67 for those age 62 in 2011, rather than those age 62 in 2017) and then
index the normal retirement age (by 1 month every 2 years) until the NRA
reaches age 68.
graph | table | pdf-graph | pdf-table | memo |
0.44 | 0.74 | -1.48 | -3.38 | |

C1.3 |
Shorten the hiatus in the normal retirement age (start increasing to
age 67 for those age 62 in 2011, rather than those age 62 in 2017)
and then index the normal retirement age (by 1 month every 2 years)
until the NRA reaches age 70.
graph | table | pdf-graph | pdf-table | memo |
0.62 | 1.72 | -1.30 | -2.40 | |

C1.4 |
Shorten the hiatus in the normal retirement age (start increasing to
age 67 for those age 62 in 2011, rather than those age 62 in 2017)
and then increase the NRA 2 months per year until the NRA reaches age 68.
graph | table | pdf-graph | pdf-table | memo |
0.55 | 0.74 | -1.37 | -3.38 | |

C1.5 |
Shorten the hiatus in the normal retirement age (speed up the increase to
age 67). That is, increase the NRA by 2 months per year for those attaining
age 62 in 2012 through 2017, five years earlier than in current law, which
would increase the NRA 2 months per year for those reaching age 62 in 2017
through 2022.
graph | table | pdf-graph | pdf-table | memo |
0.06 | 0.00 | -1.86 | -4.12 | |

C1.6 |
Increase the normal retirement age (NRA) from 66 to 67 one year
earlier than current law, starting for those reaching age 62 in
2016 and ending for those reaching age 62 in 2021. Then, after
2021, index the NRA to maintain a constant ratio of expected
retirement years (life expectancy at NRA) to potential work years
(NRA minus 20).
graph | table | pdf-graph | pdf-table | memo |
0.44 | 1.54 | -1.48 | -2.58 | |

C1.7 |
Index benefits to longevity after the normal retirement age (NRA)
reaches age 67 under current law. Under current law, the NRA
reaches 67 for individuals who attain age 62 in 2022 and later.
Under this provision, the NRA would be further increased by
one month for those attaining age 62 in every other year after 2022.
graph | table | pdf-graph | pdf-table | memo |
0.41 | 1.52 | -1.51 | -2.60 | |

C1.8 |
Increase the normal retirement age (NRA) for those reaching age 62
in 2018 and later. For those reaching age 62 in 2018, the NRA would
be 66 years, 6 months. The NRA would increase 2 months per year for
those reaching age 62 in 2019, 2020, and 2021, reaching an NRA of 67
for those turning 62 in 2021.Then, after 2021, index the NRA to
maintain a constant ratio of expected retirement years (life expectancy
at NRA) to potential work years (NRA minus 20).
graph | table | pdf-graph | pdf-table | memo |
0.44 | 1.54 | -1.48 | -2.58 | |

C2.1 |
Gradually raise the earliest eligibility age (EEA) for Social Security
retirement benefits from 62 to 65. The EEA would be increased by 2 months
for individuals reaching age 62 in every year, starting in 2012. The EEA
of 65 would apply for those reaching age 62 in 2029 and later (those
reaching age 65 in 2032 and later). As under current law, the PIA formula
applicable for any individual would depend on the year in which eligibility
age is attained. It should be noted that the elimination of retirement
eligibility between ages 62 and 65 would increase the number of individuals
who would apply for disabled worker benefits at those ages.
graph | table | pdf-graph | pdf-table | memo |
-0.07 | -0.40 | -1.99 | -4.52 | |

C2.2 |
Shorten the hiatus in the NRA by 5 years, that is, start increasing the
NRA from 66 to 67 for individuals age 62 in 2012, rather than in 2017.
Beginning for those age 62 in 2012, increase the EEA and NRA for retired
worker benefits by 2 months per year until the EEA reaches age 63 and the
NRA reaches age 67 for those attaining age 62 in 2017. Thereafter, increase
both EEA and NRA by 1 month every 2 years. Finally, increase the earliest
eligibility age for disabled widow(er)s and aged widow(er)s at the same
rate as the increase in the EEA for retired worker benefits.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) | memo (NRC/NAPA) |
0.54 | 1.40 | -1.38 | -2.72 | |

C2.3 |
Starting in 2013, convert all disabled worker beneficiaries to retired
worker status upon attainment of their EEA (rather than their NRA). After
conversion, apply the early retirement reduction for retirement at EEA
(currently 25%) times the ratio of years after 2012 (or years after
attaining age 21, if later) and before attaining age 62, to 40. Medicare
eligibility would be extended to age 65 on the basis of disability. After
2012, disability applications would not be accepted for benefit entitlement
that would start at ages over EEA.
graph | table | pdf-graph | pdf-table | memo |
0.38 | 0.75 | -1.54 | -3.37 | |

C2.4 |
After the normal retirement age (NRA) reaches age 67, index NRA to maintain
a constant ratio of life expectancy at NRA to potential work years (NRA-20)
and maintain the earliest eligibility age (EEA) at 5 years less than the
normal retirement age in the future. Also, include a "hardship exemption"
with no EEA/NRA change if a worker has 25 years of earnings of at least the
level needed for 4 quarters of coverage, and average indexed monthly earnings
(AIME) less than 250% of the individual aged Federal poverty level (wage-indexed
from 2009). The hardship exemption is phased out for those with AIME above 400%
of the poverty level.
graph | table | pdf-graph | pdf-table | memo |
0.34 | 1.22 | -1.58 | -2.90 | |

C2.5 |
Increase both the earliest eligibility age (EEA) and the normal retirement age (NRA)
at a rate of 36/47 of a month per year starting for those reaching age 62 in 2023,
until reaching an EEA of 65 and an NRA of 70 for those reaching age 62 in 2069. For
each year, the computed EEA and NRA would be rounded down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo |
0.62 | 1.99 | -1.30 | -2.13 | |

C2.6 |
Increase the normal retirement age (NRA) 3 months per year starting in 2017 until
reaching 70 for those attaining age 62 in 2032. Then increase the NRA 1 month every
2 years thereafter. Note that the NRA would increase from 66 to 67 faster than under
current law. Increase the earliest eligibility age (EEA) from 62 to 64 at the same
time the NRA would increase from 67 to 69; that is, for those attaining age 62 in 2021
through 2028. Keep EEA at 64 thereafter. Keep years in which delayed retirement credits
can be earned at 4 years after attaining NRA.
graph | table | pdf-graph | pdf-table | memo |
1.36 | 2.90 | -0.56 | -1.22 | |

C2.7 |
For those attaining age 62 in 2020 and 2021, increase the earliest eligibility age (EEA)
to 63 and increase the normal retirement age (NRA) to 68. Then, increase the EEA and NRA
by 3 months per year starting with those reaching age 62 in 2022 and stopping with those
reaching age 62 in 2025. The EEA would then remain at 64 and the NRA at 69 for workers
and spouses attaining 62 in 2025 and later.
graph | table | pdf-graph | pdf-table | memo |
0.82 | 1.25 | -1.10 | -2.87 | |

Category: Provisions Affecting Family Member Benefits (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

D1 |
Beginning in 2011, continue benefits for children of disabled
or deceased workers until age 22 if the child is in high school,
college or vocational school.
graph | table | pdf-graph | pdf-table memo |
-0.07 | -0.07 | -1.99 | -4.18 | |

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 2011, until the
percent reaches 33. Thus, the spouse benefit would be based on
33 percent of PIA for newly eligible spouses in 2027 and later.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.18 | -1.80 | -3.94 | |

Category: Provisions Affecting Payroll Tax Rates or Taxable Maximum (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

E1.1 |
Raise payroll tax rates (for employees and employers combined) by 2.1
percentage points in 2011 and later.
graph | table | pdf-graph | pdf-table | memo |
2.00 | 2.09 | 0.08 | -2.03 | |

E1.2 |
Raise payroll tax rates (for employees and employers combined) by 1.9
percentage points in 2023-52 (to 14.3% combined) and by an additional
1.9 percentage points in 2053 (to 16.2% combined).
graph | table | pdf-graph | pdf-table | memo |
1.99 | 3.72 | 0.07 | -0.40 | |

E1.3 |
Beginning in 2011, reduce the combined OASDI payroll tax rate from 12.4
percent to 11.4 percent.
graph | table | pdf-graph | pdf-table | memo |
-0.96 | -1.01 | -2.88 | -5.12 | |

E1.4 |
Raise the payroll tax rates gradually (for employees and employers combined)
by 0.1 percentage points in 2016; continue this increase each year for 20
years. By 2035, the combined employee and employer payroll tax rate would be
14.4 percent.
graph | table | pdf-graph | pdf-table | memo |
1.40 | 1.98 | -0.52 | -2.13 | |

E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in
2013, 12.9 percent in 2021, 13.1 in percent in 2031, 13.9 percent in 2041,
13.5 percent in 2051, and 13.3 percent in 2061.
graph | table | pdf-graph | pdf-table | memo |
0.73 | 0.90 | -1.19 | -3.21 | |

E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in
2013, 12.9 percent in 2021, 13.3 in percent in 2031, 13.8 percent in 2041,
14.4 percent in 2061, and 14.5 percent in 2076.
graph | table | pdf-graph | pdf-table | memo |
1.03 | 2.07 | -0.89 | -2.05 | |

E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in
2013, 13.0 percent in 2026, 13.3 percent in 2041, 14.0 percent in 2061,
14.5 percent in 2071, and 14.7 percent in 2081.
graph | table | pdf-graph | pdf-table | memo |
0.84 | 2.25 | -1.08 | -1.87 | |

E2.1 |
Beginning in 2011, make all earnings subject to the payroll tax
(but retain the current-law taxable maximum for benefit calculations).
graph | table | pdf-graph | pdf-table | memo |
2.33 | 2.48 | 0.41 | -1.64 | |

E2.2 |
Beginning in 2011, make all earnings subject to the payroll tax and
credit them for benefit purposes.
graph | table | pdf-graph | pdf-table | memo |
1.90 | 1.65 | -0.02 | -2.47 | |

E2.3 |
Determine the level of the contribution and benefit base such that
90 percent of the earnings would be subject to the payroll tax
(phased in 2011-2020). All earnings subject to the payroll tax would
be used in determining benefits.
graph | table | pdf-graph | pdf-table | memo |
0.76 | 0.64 | -1.16 | -3.48 | |

E2.4 |
Make 90% of the earnings subject to the payroll tax (phased in 2011-2020),
but retain the current-law taxable maximum for benefit purposes. This
estimate considers all self-employed earnings in computing the percentage
of earnings subject to the payroll tax.
graph | table | pdf-graph | pdf-table | memo |
0.96 | 1.10 | -0.96 | -3.02 | |

E2.5 |
Raise the taxable maximum amount (the contribution and benefit base) to
include 90 percent of total OASDI covered earnings. Phase in this increase
gradually between 2012 and 2017. Benefit computations would reflect all
earnings up to the new taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
0.77 | 0.64 | -1.15 | -3.48 | |

E2.6 |
Impose a 3 percent payroll tax on OASDI covered earnings above the current
taxable maximum starting in 2011. Benefit computations would not reflect
any earnings above the taxable maximum amount.
graph | table | pdf-graph | pdf-table | memo |
0.57 | 0.60 | -1.35 | -3.51 | |

E2.7 |
In 2011 through 2013, raise the OASDI contribution and benefit base from
$106,800 to $115,200 (in 2009 AWI indexed dollars). For years after 2013,
the contribution and benefit base would be increased based on changes in
SSA's average wage index. Additional earnings subject to the OASDI payroll
tax would be credited for benefit calculation purposes.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.09 | -1.80 | -4.03 | |

E2.8 |
Impose a 6 percent payroll tax on OASDI covered earnings above the current
taxable maximum starting in 2011. Benefit computations would not reflect
any earnings above the taxable maximum amount.
graph | table | pdf-graph | pdf-table | memo |
1.13 | 1.21 | -0.79 | -2.91 | |

E2.9 |
Beginning in 2011, make all earnings subject to the OASDI payroll tax
and give benefit credit using an PIA formula that is extended to provide
less credit for those with AIMEs higher than the current-law maximum AIME
level. The high end of the benefit formula, applied to 2009, would be:
15 percent of AIME between $4,483 and $8,900 ($106,800 divided by 12),
plus 3 percent of AIME over $8,900.
graph | table | pdf-graph | pdf-table | memo |
2.18 | 2.18 | 0.26 | -1.94 | |

E2.10 (2011) |
Beginning in 2011, raise the taxable maximum each year by an additional
2 percent over the current-law, wage-indexed amount until total earnings
subject to payroll taxes equals 90 percent of all covered earnings. Credit
the earnings for benefit purposes.
graph | table | pdf-graph | pdf-table | memo |
0.61 | 0.67 | -1.31 | -3.45 | |

E2.10 (2012) |
Increase contribution and benefit base ("taxable maximum") by an additional
2 percent per year beginning in 2012 until taxable earnings are equal to 90
percent of covered earnings. Additional taxable earnings would be credited
for the purpose of computing benefits.
graph | table | pdf-graph | pdf-table | memo |
0.60 | 0.68 | -1.32 | -3.44 | |

E2.11 |
Make all earnings subject to the employer OASDI payroll tax beginning in
2011. For the employee OASDI payroll tax and for benefit calculation
purposes, the taxable maximum would equal the present-law taxable maximum
for years 2010 and earlier. Beginning in 2011, the taxable maximum would
be raised each year by an additional 2 percent over the current-law,
wage-indexed amount until earnings subject to payroll taxes equals 90
percent of all covered earnings.
graph | table | pdf-graph | pdf-table | memo |
1.42 | 1.39 | -0.50 | -2.72 | |

E2.12 |
Apply the following payroll tax rate above the current-law taxable
maximum, with no credit toward benefits: 2.0 percent in 2013 and
3.0 percent in 2061.
graph | table | pdf-graph | pdf-table | memo |
0.41 | 0.60 | -1.51 | -3.52 | |

E2.13 |
Increase the taxable maximum (contribution and benefit base)
by an additional 2 percent over normal indexing starting in 2013, until
90 percent of OASDI covered earnings is taxable (achieved in 2050). The
present-law taxable maximum is retained for benefit purposes; no benefit
credit is given for earnings above the present-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
0.71 | 1.09 | -1.21 | -3.03 | |

E2.14 |
Apply the following payroll tax rates above the current-law taxable
maximum, with no credit toward benefits: 2.0 percent in 2013, 3.0
percent in 2026, 3.5 percent in 2041, 4.5 percent in 2051, and 5.5
percent in 2061.
graph | table | pdf-graph | pdf-table | memo |
0.66 | 1.10 | -1.26 | -3.02 | |

E2.15 |
Apply 2 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.19 | 0.16 | -1.73 | -3.95 | |

E2.16 |
Apply 2 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.25 | 0.30 | -1.67 | -3.82 | |

E2.17 |
Apply 3 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.25 | -1.63 | -3.87 | |

E2.18 |
Apply 3 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.37 | 0.45 | -1.55 | -3.67 | |

E2.19 |
Apply 4 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.39 | 0.34 | -1.53 | -3.78 | |

E2.20 |
Apply 4 percent payroll tax rate on earnings over $200,000 in 2018,
with the $200,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.49 | 0.60 | -1.43 | -3.52 | |

E2.21 |
Apply 2 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.14 | 0.12 | -1.78 | -4.00 | |

E2.22 |
Apply 2 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.18 | 0.22 | -1.74 | -3.89 | |

E2.23 |
Apply 3 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.19 | -1.70 | -3.93 | |

E2.24 |
Apply 3 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.27 | 0.34 | -1.65 | -3.78 | |

E2.25 |
Apply 4 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.29 | 0.25 | -1.63 | -3.87 | |

E2.26 |
Apply 4 percent payroll tax rate on earnings over $300,000 in 2018,
with the $300,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.37 | 0.45 | -1.55 | -3.67 | |

E2.27 |
Apply 2 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.12 | 0.10 | -1.80 | -4.02 | |

E2.28 |
Apply 2 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.15 | 0.18 | -1.77 | -3.94 | |

E2.29 |
Apply 3 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.18 | 0.15 | -1.74 | -3.97 | |

E2.30 |
Apply 3 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.27 | -1.70 | -3.84 | |

E2.31 |
Apply 4 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give proportional
benefit credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.24 | 0.20 | -1.68 | -3.92 | |

E2.32 |
Apply 4 percent payroll tax rate on earnings over $400,000 in 2018,
with the $400,000 threshold wage-indexed after 2018. Give no benefit
credit for additional earnings in AIME for benefit computation.
graph | table | pdf-graph | pdf-table | memo |
0.30 | 0.37 | -1.62 | -3.75 | |

E2.33 |
Make 90% of the earnings subject to the payroll tax (phased in 2011-2020).
In addition, apply a tax rate of 6.2 percent for earnings above the revised
taxable maximum, phased in from 2011-2020. This additional tax rate would be
paid by employers on wages of their employees, and by self-employed workers
on their earnings. Benefit computations for workers would only reflect
earnings below the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo |
1.38 | 1.36 | -0.54 | -2.76 | |

E2.34 |
Increase contribution and benefit base ("taxable maximum") by an additional 2
percent per year beginning in 2012 until taxable earnings are equal to 90
percent of covered earnings (estimated to occur in 2049). Additional taxable
earnings would be credited for the purpose of computing benefits. Create a new
bend point equal to the current-law taxable maximum and provide a 5 percent PIA
formula factor for AIME above the new bend point.
graph | table | pdf-graph | pdf-table | memo |
0.67 | 0.90 | -1.25 | -3.21 | |

E2.35 |
Eliminate the contribution and benefit base entirely beginning for 2017 and
later; phase in the inclusion of earnings above the current contribution and
benefit base for years 2011 through 2016. Assess the full Social Security
payroll tax rate of 12.4 percent on the additional earnings. The primary
insurance amount (PIA) would be determined in two components. The first
component would be based on the average indexed monthly earnings (AIME),
restricted to earnings at the level of the current-law contribution and benefit
base ($106,800 for 2010) for each year. The second component of the PIA would be
computed using the "AIME+", which would be equal to the sum of the indexed earnings
in excess of the current-law contribution and benefit base for the 35 years included
in the AIME, divided by 420. The second component of PIA would be equal to 3 percent
of AIME+ up to $11,933 ((equals $250,000-$106,800)/12) and 0.25 percent for AIME+ above
this level for beneficiaries newly eligible in 2011. For beneficiaries newly eligible
for benefits after 2011, the "bend point" of $11,933 would be indexed by the national
average wage index (AWI) in the same manner as for the bend points in the first component
of the PIA.
graph | table | pdf-graph | pdf-table | memo |
2.16 | 2.37 | 0.24 | -1.75 | |

E2.36 |
Apply 12.4 payroll tax rate on earnings above $250,000 starting in 2012. The
$250,000 threshold does not increase in future years; when the current-law
contribution and benefit base exceeds $250,000, apply 12.4 percent tax rate to
earnings above the base. Earnings subject to tax above the threshold would not
be credited for the purpose of computing benefits.
graph | table | pdf-graph | pdf-table | memo |
2.07 | 2.47 | 0.15 | -1.64 | |

Category: Provisions Affecting Coverage of Employment (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

F1 (2011) | Cover newly hired State and local
government employees beginning in 2011. graph | table | pdf-graph | pdf-table | memo |
0.17 | -0.16 | -1.75 | -4.28 | |

F1 (2020) | Cover newly hired State and local
government employees beginning in 2020. graph | table | pdf-graph | pdf-table | memo |
0.16 | -0.12 | -1.76 | -4.24 | |

F1 (2021) | Cover newly hired State and
local government employees beginning in 2021. graph | table | pdf-graph | pdf-table | memo |
0.16 | -0.11 | -1.76 | -4.23 | |

F2 |
Provide for OASDI payroll tax coverage of employer provided group
health insurance cost, starting in 2012. Specifically, any cost
toward such group health insurance borne by employees would cease
to be deductible, and the cost borne by employers would now be
allocated to employees as if it had been wages, for the purpose
of payroll tax (and later, benefit) calculations. Both employee
and employer OASDI payroll taxes would be affected by this proposal.
graph | table | pdf-graph | pdf-table | memo |
0.96 | 0.77 | -0.96 | -3.35 | |

F3 |
Phase out the income and payroll tax exclusion for employer-sponsored
group health insurance (ESI) beginning in 2018. Set the exclusion at
the 75th percentile of premium distribution in 2018, with amounts above
that subject to tax. Reduce the exclusion level by 10 percent annually,
with exclusion fully eliminated in 2028. Eliminate the excise tax on ESI.
graph | table | pdf-graph | pdf-table | memo |
0.93 | 1.06 | -0.99 | -3.06 | |

F4 |
Beginning in 2011, exempt individuals with more than 180 quarters
of coverage from the OASDI payroll tax.
graph | table | pdf-graph | pdf-table | memo |
-0.22 | -0.31 | -2.14 | -4.43 | |

F5 |
Tax all voluntary salary reduction plan contributions (such as
Cafeteria 125 plans and FSAs) like 401(k)s for OASDI payroll
tax purposes, effective 2012.
graph | table | pdf-graph | pdf-table | memo |
0.22 | 0.13 | -1.70 | -3.99 | |

F6 |
Tax Reform for Business: Establish a value added tax (VAT) of 3.0
percent for 2012 and 6.5 percent for 2013 and later. Lower the
corporate income tax rate from 35 to 27 percent starting 2012.
graph | table | pdf-graph | pdf-table | memo |
-0.03 | 0.16 | -1.95 | -3.95 | |

Category: Provisions Affecting Trust Fund Investment in Equities (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

G1 | Invest 40 percent of the Trust Funds in
equities (phased in 2011-2025), assuming an ultimate 6.4 percent real
rate of return on equities. graph | table | pdf-graph | pdf-table | memo |
0.62 | 0.00 | -1.30 | -4.12 | |

G2 | Invest 40 percent of the Trust Funds in
equities (phased in 2011-2025), assuming an ultimate 5.4 percent real
rate of return on equities. graph | table | pdf-graph | pdf-table | memo |
0.45 | 0.00 | -1.47 | -4.12 | |

G3 |
Invest 40 percent of the Trust Funds in equities (phased in 2011-2025),
assuming an ultimate 2.9 percent real rate of return on equities, the
same as the assumed ultimate yield on the special-issue Social Security
trust fund bonds. graph | table | pdf-graph | pdf-table | memo |
0.00 | 0.00 | -1.92 | -4.12 | |

G4 |
Gradually invest 15 percent of OASDI trust fund assets in a broad index
of equity market securities (such as the Wilshire 5000), assuming an
ultimate 6.4 percent annual real rate of return on equities. Increase
the portion in equities by 1.5 percent each year 2011 through 2020.
Maintain the percentage at 15 percent thereafter.
graph | table | pdf-graph | pdf-table | memo |
0.25 | 0.00 | -1.67 | -4.12 | |

G5 |
Invest 15 percent of the Trust Funds in equities (phased in 2011-2020),
assuming an ultimate 2.9 percent annual real rate of return on equities,
the same as the assumed ultimate yield on the special-issue Social
Security trust fund bonds.
graph | table | pdf-graph | pdf-table | memo |
0.00 | 0.00 | -1.92 | -4.12 | |

Category: Provisions Affecting Taxation of Benefits (2010 Trustees Report intermediate assumptions) | ||||||

Present Law, Alternative II. |
-1.92 | -4.12 | ||||

H1 | Tax Social Security benefits in a
manner similar to private pension income beginning in 2011.
Phase out the lower-income thresholds during 2011-2020. graph | table | pdf-graph | pdf-table | memo |
0.28 | 0.18 | -1.64 | -3.94 | |

H2 | Tax Social Security benefits in a
manner similar to private pension income beginning in 2011.
Phase out the lower-income thresholds during 2011-2030.
graph | table | pdf-graph | pdf-table | memo |
0.26 | 0.18 | -1.66 | -3.94 | |

H3 | Tax Reform for Individuals:
For personal income tax, establish in 2012 a 2-bracket approach
with marginal rates of 15 and 27 percent separated at $51,000
(CPI indexed) for 2012 and later, with a non-refundable credit
for low-income tax filers age 65 and older. Capital gains would
be treated as regular income. All Social Security benefits would
be taxed starting 2012 at the applicable marginal rate (15 or 27)
less a non-refundable credit of 7.5 percent. Revenue to OASDHI
would be based on the net marginal rates of 7.5 and 19.5 percent,
with 40 percent of revenue dedicated to HI.
graph | table | pdf-graph | pdf-table | memo |
-0.01 | -0.06 | -1.93 | -4.17 |

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