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Summary of Provisions That Would Change the Social Security Program |
Estimates based on the intermediate assumptions of the 2014 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 (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 percent of payroll and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
A1 |
Starting December 2015, reduce the annual COLA by 1 percentage point. graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.76 | 2.38 | 61% | 49% | |
A2 |
Starting December 2015, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.91 | 1.25 | 32% | 26% | |
A3 |
Starting December 2015, 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) | memo (Social Security Advisory Board) |
0.56 | 0.76 | 19% | 16% | |
A4 |
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. 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 | 0.56 | 14% | 11% | |
A5 |
Starting December 2015, 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 2016, 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 | Larson | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra) | memo (Deutch) |
-0.38 | -0.54 | -13% | -11% | |
A7 |
Starting December 2015, 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) |
1.65 | 2.25 | 57% | 46% | |
Category: Provisions Affecting Level of Monthly Benefits (PIA) (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI
benefits in 2021: Reduce PIA 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) |
2.56 | 7.64 | 89% | 156% | |
B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASDI benefits in 2021: Create a new bend point at
the 30th percentile of the AIME distribution of newly retired workers. Maintain
current-law benefits for earners at the 30th percentile and below. Reduce the 32 and
15 percent factors above the 30th percentile such that the initial benefit for
a worker with AIME equal to the taxable maximum grows by inflation rather than the
growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.41 | 4.23 | 49% | 86% | |
B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2021: 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) |
1.18 | 3.55 | 41% | 73% | |
B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with individuals
newly eligible for OASDI benefits in 2021: 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) |
0.95 | 2.70 | 33% | 55% | |
B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2021: 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) |
0.67 | 1.70 | 23% | 35% | |
B1.6 (2018) |
Progressive price indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASI benefits in 2018: 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 | 4.02 | 52% | 82% | |
B1.6 (2023) |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASI 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 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) |
1.11 | 3.60 | 39% | 73% | |
B1.7 |
Progressive price indexing (40th percentile) of PIA factors for individuals newly eligible
for OASI benefits in 2022 through 2059: 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) |
0.93 | 2.50 | 32% | 51% | |
B1.8 |
Progressive price indexing (50th percentile) of PIA factors for individuals newly eligible
for OASI benefits in 2019 through 2058: 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) |
0.95 | 2.28 | 33% | 46% | |
B2.1 |
Beginning with those newly eligible for OASI benefits in 2024, multiply the PIA factors by the
ratio of life expectancy at 67 for 2019 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) | memo (Bennett) |
0.52 | 1.74 | 18% | 36% | |
B3.1 |
Beginning with those newly eligible for OASDI benefits in 2015, multiply the 32 and 15
percent PIA factors each year by 0.987. Stop reductions after 2045, when the factors
reach 21 percent and 10 percent, respectively.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
1.53 | 3.04 | 53% | 62% | |
B3.2 |
Beginning with those newly eligible for OASI benefits in 2022, multiply the 90 and 32
percent PIA factors each year by 0.9925 and 0.982, respectively. Stop reductions after 2059.
Beginning with those newly eligible for OASI benefits in 2017, multiply the 15 factor by
0.982. Stop reduction of the 15 factor after 2054. 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) |
2.00 | 5.40 | 69% | 110% | |
B3.3 |
Beginning with those newly eligible for OASDI benefits in 2015, 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) |
0.22 | 0.30 | 8% | 6% | |
B3.4 |
Beginning with those newly eligible for OASDI benefits in 2018, multiply all PIA
factors each year by 0.991. Stop reductions after 2046. 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) |
1.49 | 3.22 | 52% | 66% | |
B3.5 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASI benefits in 2017, continuing through 2054, and resuming in 2075:
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 1.13 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) |
1.24 | 3.04 | 43% | 62% | |
B3.6 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals
newly eligible for OASI benefits in 2017, continuing through 2066: 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 1.13 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) |
1.32 | 3.50 | 46% | 71% | |
B3.7 |
Progressive indexing (30th percentile) of PIA factors beginning with individuals newly
eligible for OASI benefits in 2017, continuing through 2026, and resuming in 2065: 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 1.13 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) |
0.58 | 1.56 | 20% | 32% | |
B3.8 |
Beginning with those newly eligible for OASDI benefits in 2021, 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 2054: 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 factor reduces to 5 percent.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) |
0.89 | 2.32 | 31% | 47% | |
B3.9 |
Beginning with those newly eligible for OASDI benefits in 2027, gradually reduce the 15 percent
PIA factor in each year so that it reaches 10 percent for those newly eligible in 2056
and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
0.08 | 0.23 | 3% | 5% | |
B3.10 |
Beginning with those newly eligible for OASDI benefits in 2021,
gradually increase the first PIA bend point in each year so that it
is 15 percent higher for those newly eligible in 2035 and later.
graph | table | pdf-graph | pdf-table | memo (Harkin 2013) | memo (Harkin 2012) |
-0.37 | -0.72 | -13% | -15% | |
B3.11 |
Increase the first PIA factor from 90 percent to 93 percent
for all beneficiaries eligible as of January 2016 and for those
newly eligible for benefits after 2016.
graph | table | pdf-graph | pdf-table | memo (Larson) | |
-0.24 | -0.27 | -8% | -5% | |
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 2015-2019.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.29 | 0.41 | 10% | 8% | |
B4.2 |
Increase the number of years used to calculate benefits for retirees and survivors (but not for
disabled workers) from 35 to 40, phased in over the years 2015-2023.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (Social Security Advisory Board) |
0.46 | 0.69 | 16% | 14% | |
B4.3 |
For the OASI and DI computation of the PIA, gradually reduce the maximum number of drop-out years
from 5 to 0, phased in over the years 2016-2024.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.62 | 0.97 | 22% | 20% | |
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 2032, and
is phased in for new eligibles in 2023 through 2031. 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) |
-0.02 | 0.00 | -1% | 0% | |
B5.2 |
Beginning for those newly eligible in 2015, 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 $1,197 in 2013). For those with under 30 years
of coverage, the PIA per year of coverage over 10 years is $1,197/20
= $59.85. (c) Index the initial PIA per year of coverage by wage
growth for successive cohorts.
graph | table | pdf-graph | pdf-table | Larson | memo (National Academy of Social Insurance) |
-0.20 | -0.29 | -7% | -6% | |
B5.3 |
Beginning for those newly eligible in 2015, 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 $1,197 in 2013). For those with under 30 years of coverage, the PIA per year of
coverage over 10 years is $1,197/20 = $59.85. (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) |
-0.27 | -0.39 | -9% | -8% | |
B5.4 |
Beginning for those newly eligible in 2021, 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 $1,197 in 2013).
For those with under 30 years of coverage, the PIA per year of coverage over 10 years is $1,197/20 = $59.85.
(c) From 2013 to the year of implementation, 2021, 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) |
-0.13 | -0.23 | -5% | -5% | |
B5.5 |
Beginning for those newly eligible in 2016, 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 $1,238 in 2013). For those with under 30 years
of coverage, the PIA per year of coverage over 19 years is $1,238/11 = $112.60. (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) |
-0.09 | -0.14 | -3% | -3% | |
B5.6 |
Beginning for those newly eligible in 2015, 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 $972.50 in 2014). For those with under 30 years of coverage, the PIA per year of
coverage over 10 years is $972.50/20 = $48.60. (c) From 2014 to the year of implementation, 2015,
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) |
-0.13 | -0.20 | -5% | -4% | |
B5.7 |
Beginning for those newly eligible in 2017, increase the special
minimum benefit to 100 of poverty by: (a) The number of years of
work (YOWs) is determined as total quarters of coverage divided by
4, ignoring any fraction. Up to 5 additional years with a child
under 6. (b) 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 2015 or who reaches their 85th birthday after the beginning of 2015.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) | memo (National Academy of Social Insurance) |
-0.11 | -0.16 | -4% | -3% | |
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 2015 or who reaches their 85th birthday after the beginning
of 2015. The dollar amount of increase equals 5 percent of the average retired-worker MBA in the
prior year.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.11 | -0.16 | -4% | -3% | |
B6.3 |
Provide an increase in the benefit level of any beneficiary who is
85 or older at the beginning of 2016 or who reaches their 85th
birthday after the beginning of 2016. Increase the beneficiary's PIA
based on an amount equal to the average retired-worker PIA at the
end of 2015, 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 2016 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) |
-0.14 | -0.19 | -5% | -4% | |
B6.4 |
Starting in 2015, 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 | -0.22 | -5% | -4% | |
B6.5 |
Starting in 2017, 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 | -0.32 | -8% | -6% | |
B6.6 |
Starting in 2021, 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 (phased in from the 33rd through the 42nd years after
eligibility). Auxiliary beneficiaries receive benefit enhancement
based on PIA of governing worker.
graph | table | pdf-graph | pdf-table | memo(FY 2014 Budget) |
-0.21 | -0.31 | -7% | -6% | |
B7.1 |
Reduce benefits by 3 percent for those newly eligible for benefits in 2015 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.37 | 0.52 | 13% | 11% | |
B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2015 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.62 | 0.86 | 22% | 18% | |
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 $22,564 in
2013). The credits are available for all past years to newly eligible retired-worker and
disabled-worker beneficiaries starting in 2015. The 5 years are chosen to yield the largest
increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.26 | -0.36 | -9% | -7% | |
B7.4 |
Increase benefits by 2 percent for all beneficiaries as of the beginning of 2015 and for
those newly eligible for benefits after the beginning of 2015.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.31 | -0.34 | -11% | -7% | |
B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2015 and for
those newly eligible for benefits after the beginning of 2015.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-0.78 | -0.86 | -27% | -18% | |
B7.6 |
Increase benefits by 20 percent for all beneficiaries as of the beginning of 2015 and for
those newly eligible for benefits after the beginning of 2015.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
-3.13 | -3.44 | -109% | -70% | |
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 2020 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 2020, based on changes in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz) |
0.25 | 0.37 | 9% | 7% | |
Category: Provisions Affecting Retirement Age (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 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) |
0.33 | 0.73 | 12% | 15% | |
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) |
0.43 | 0.73 | 15% | 15% | |
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) |
0.48 | 1.61 | 17% | 33% | |
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) |
1.00 | 2.28 | 35% | 47% | |
C1.5 |
Starting in 2015, 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) |
0.69 | 1.44 | 24% | 29% | |
C2.1 |
Increase the earliest eligibility age (EEA) by two months per year for those age
62 starting in 2016 and ending in 2033 (EEA reaches 65 for those age 62 in 2033).
graph | table | pdf-graph | pdf-table | memo (AARP) |
-0.07 | -0.43 | -2% | -9% | |
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) |
0.48 | 1.52 | 17% | 31% | |
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) |
0.38 | 1.23 | 13% | 25% | |
C2.4 |
After the normal retirement age (NRA) reaches 67 for those age 62 in 2022, increase
both the NRA and the earliest eligibility age (EEA) by 36/47 of a month per year
until the NRA and EEA reach 65 and 70 respectively. For each year, the computed EEA
and NRA rounds down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis) |
0.68 | 1.91 | 23% | 39% | |
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) |
1.39 | 2.93 | 48% | 60% | |
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 | 1.26 | 31% | 26% | |
C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age (EEA) for
those age 62 starting in 2016 by 3 months per year until EEA reaches 64 in 2023 and
NRA reaches 69 in 2027.
graph | table | pdf-graph | pdf-table | memo (Hutchison) |
0.85 | 1.26 | 29% | 26% | |
C2.8 |
Starting in 2017, 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 26 percent for those age 62 in 2017) phased in over 40
years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.43 | 0.87 | 15% | 18% | |
Category: Provisions Affecting Family Member Benefits (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
D1 |
Beginning in 2015, 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) |
-0.07 | -0.07 | -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 2015, until the percent
reaches 33 in 2031.
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 2016
and those becoming eligible after 2016.
graph | table | pdf-graph | pdf-table | memo(Begich, Murray) |
-0.02 | -0.02 | -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 2016 and those
becoming eligible after 2016.
graph | table | pdf-graph | pdf-table | memo(Begich, Murray) |
-0.11 | -0.12 | -4% | -2% | |
Category: Provisions Affecting Payroll Taxes (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 15.5
percent in 2015 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
2.94 | 3.07 | 102% | 63% | |
E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.5 percent in 2027-2056,
and to 18.6 percent in years 2057 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
3.24 | 6.00 | 112% | 122% | |
E1.3 |
Reduce the payroll tax rate (currently 12.4 percent) to 11.4 percent in 2015 and later.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
-0.97 | -1.01 | -34% | -21% | |
E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1
percentage point each year from 2020-2039, until the rate reaches
14.4 percent in 2039 and later.
graph | table | pdf-graph | pdf-table | Larson | memo (National Academy of Social Insurance) |
1.42 | 1.99 | 49% | 41% | |
E1.5 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2017, 12.9 percent
in 2025, 13.1 in percent in 2035, 13.9 percent in 2045, 13.5 percent in 2055, and 13.3 percent
in 2065 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.74 | 0.91 | 26% | 19% | |
E1.6 |
Increase the payroll tax rate (currently 12.4 percent) to 12.6 percent in 2017, 12.9 percent
in 2025, 13.3 in percent in 2035, 13.8 percent in 2045, 14.4 percent in 2065, and 14.5 percent
in 2080 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
1.04 | 2.07 | 36% | 42% | |
E1.7 |
Increase the payroll tax rate (currently 12.4 percent) to 12.7 percent in 2017, 13.0 percent
in 2030, 13.3 in percent in 2045, 14.0 percent in 2065, 14.5 percent in 2075, and 14.7
percent in 2085 and later.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.85 | 2.25 | 29% | 46% | |
E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point each
year from 2017-2022, until the rate reaches 13.0 percent for 2022 and later.
graph | table | pdf-graph | pdf-table | memo (Moore) |
0.53 | 0.60 | 19% | 12% | |
E2.1 |
Eliminate the taxable maximum in years 2015 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 (Social Security Advisory Board) |
2.35 | 2.47 | 82% | 50% | |
E2.2 |
Eliminate the taxable maximum in years 2015 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) |
1.91 | 1.60 | 66% | 33% | |
E2.3 |
Eliminate the taxable maximum in years 2015 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) |
2.15 | 2.16 | 75% | 44% | |
E2.4 |
Eliminate the taxable maximum for years 2021 and later (phased in
2015-2020), 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 2014 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) |
2.18 | 2.35 | 76% | 48% | |
E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2015, 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) | memo (DeFazio) |
2.16 | 2.47 | 75% | 50% | |
E2.6 |
Apply a 3 percent payroll tax on earnings above the current-law taxable maximum starting in 2015.
Do not provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.61 | 0.64 | 21% | 13% | |
E2.7 |
Apply a 6 percent payroll tax on earnings above the current-law taxable maximum starting in 2015.
Do not provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Wexler) |
1.19 | 1.25 | 41% | 26% | |
E2.8 |
Apply a 2 percent payroll tax on earnings above the current-law taxable maximum for years 2017-2064,
and a 3 percent rate for years 2065 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 | 15% | 13% | |
E2.9 |
Apply the following payroll tax rates above the current-law taxable maximum: 2.0 percent in
2017, 3.0 percent in 2030, 3.5 percent in 2045, 4.5 percent in 2055, and 5.5 percent in 2065
and later. Do not provide benefit credit for earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA) |
0.70 | 1.14 | 24% | 23% | |
E2.10 |
Eliminate the taxable maximum in years 2025 and later. Phase in elimination by taxing all
earnings above the current-law taxable maximum at: 1.24 percent in 2016, 2.48 percent in 2017,
and so on, up to 11.16 percent in 2024. 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) |
1.91 | 2.05 | 66% | 42% | |
E2.11 |
Eliminate the taxable maximum in years 2020 and later. Phase in elimination by taxing all
earnings above the current-law taxable maximum at: 2.48 percent in 2016, 4.96 percent in 2017,
and so on, up to 12.40 percent in 2020. 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
2014 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 (Harkin 2013) |
2.09 | 2.16 | 72% | 44% | |
E2.12 |
Eliminate the taxable maximum in years 2026 and later. Phase in elimination by taxing all
earnings above the current-law taxable maximum at: 1.24 percent in 2017, 2.48 percent in
2018, and so on, up to 11.16 percent in 2025. 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) |
1.91 | 2.15 | 66% | 44% | |
E2.13 |
Apply OASDI payroll tax rate on earnings above $400,000 starting in
2016, 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 2015 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) |
1.84 | 2.35 | 64% | 48% | |
E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in 2015-2024). Provide benefit credit for earnings up to the
revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.77 | 0.63 | 27% | 13% | |
E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in 2015-2024). Do not provide benefit credit for additional earnings
taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick) |
0.97 | 1.11 | 34% | 23% | |
E3.3 |
Increase the taxable maximum such that 90 percent of earnings would be subject to the
payroll tax (phased in 2016-2021). Provide benefit credit for earnings up to the revised
taxable maximum.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.78 | 0.63 | 27% | 13% | |
E3.4 |
Increase the taxable maximum from $106,800 to $115,200 (in 2009 AWI-indexed dollars),
phased in 2015-2017. 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 2015 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) | memo (National Academy of Social Insurance) |
0.62 | 0.66 | 21% | 14% | |
E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in 2017 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) |
0.72 | 1.10 | 25% | 22% | |
E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in 2016 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) |
0.62 | 0.77 | 22% | 16% | |
E3.8 |
Beginning in 2022, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017, with the threshold wage-indexed after 2022. Provide
proportional benefit credit for additional earnings taxed, based on the payroll tax
rate applied to the additional earnings divided by the full 12.4 percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.20 | 0.16 | 7% | 3% | |
E3.9 |
Beginning in 2022, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017, with the threshold wage-indexed after 2022. Do not
provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.25 | 0.30 | 9% | 6% | |
E3.10 |
Beginning in 2022, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017, with the threshold wage-indexed after 2022. 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) |
0.15 | 0.12 | 5% | 2% | |
E3.11 |
Beginning in 2022, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017, with the threshold wage-indexed after 2022. 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 | 0.23 | 7% | 5% | |
E3.12 |
Beginning in 2022, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017, with the threshold wage-indexed after 2022. 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 2022, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017, with the threshold wage-indexed after 2022. 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) |
0.16 | 0.19 | 5% | 4% | |
E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent) beginning in
2015. For the employee payroll tax (6.2 percent) and for benefit credit purposes,
beginning in 2015, increase the taxable maximum by an additional 2 percent per year until
taxable earnings equal 90 percent of covered earnings.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance) |
1.43 | 1.38 | 50% | 28% | |
E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject to the payroll tax
(phased in 2015-2024). In addition, apply a tax rate of 6.2 percent for earnings above the
revised taxable maximum (phased in from 2015-2024). 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 | 1.34 | 48% | 27% | |
E3.16 |
Beginning in 2016, apply 4 percent payroll tax rate on earnings
above the wage-indexed equivalent of $400,000 in 2015, with the
threshold wage-indexed after 2016. 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; and (2) a formula factor of 2 percent on this
newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo(Begich, Murray) |
0.32 | 0.35 | 11% | 7% | |
Category: Provisions Affecting Coverage of Employment (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
F1 |
Starting in 2015, cover newly hired State and local government employees.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission) | memo (Bipartisan Policy Center) | memo (Warshawsky) | memo (Social Security Advisory Board) |
0.15 | -0.17 | 5% | -4% | |
F2 |
Starting in 2015, 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) |
-0.32 | -0.50 | -11% | -10% | |
F3 |
Expand covered earnings to include employer and employee premiums
for employer-sponsored group health insurance (ESI). Starting in
2018, phase out the OASDI payroll tax exclusion for ESI premiums.
Set an exclusion level at the 75th percentile of premium
distribution in 2018, with amounts above that subject to the payroll
tax. Reduce the exclusion level each year by 10 percent of the 2018
exclusion level until fully eliminated in 2028. Eliminate the
excise tax on ESI premiums scheduled to begin in 2018.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
1.03 | 0.84 | 36% | 17% | |
F4 |
Expand covered earnings to include contributions to voluntary salary
reduction plans (such as Cafeteria 125 plans and Flexible Spending
Accounts). Starting in 2015, 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) |
0.20 | 0.12 | 7% | 2% | |
F5 |
Tax Reform for Business: Establish a value added tax of 3.0
percent for 2016 and 6.5 percent for 2017 and later. Starting in
2016, reduce the corporate income tax rate from 35 to 27 percent.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center) |
-0.02 | 0.19 | -1% | 4% | |
Category: Provisions Affecting Trust Fund Investment in Equities (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
G1 |
Invest 40 percent of the Trust Funds in equities (phased in
2015-2029), assuming an ultimate 6.4 percent real rate of return on
equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.59 | 0.00 | 21% | 0% | |
G2 |
Invest 40 percent of the Trust Funds in equities (phased in 2015-2029),
assuming an ultimate 5.4 percent real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.43 | 0.00 | 15% | 0% | |
G3 |
Invest 40 percent of the Trust Funds in equities (phased in 2015-2029),
assuming an ultimate 2.9 percent 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% | 0% | |
G4 |
Invest 15 percent of the Trust Fund in equities (phased in 2015-2024), assuming an
ultimate 6.4 percent annual real rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP) |
0.24 | 0.00 | 8% | 0% | |
G5 |
Invest 15 percent of the Trust Funds in equities (phased in 2015-2024), assuming an
ultimate 2.9 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% | 0% | |
G6 |
Invest up to 25 percent of OASDI Trust Fund reserves in equities
(phased in 2017-2026), assuming an ultimate 6.4 percent real rate of
return on equities.
graph | table | pdf-graph | pdf-table | memo (Larson) |
0.38 | 0.00 | 13% | 0% | |
G7 |
Invest up to 25 percent of OASDI Trust Fund reserves in equities
(phased in 2017-2026), assuming an ultimate 2.9 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) |
0.00 | 0.00 | 0% | 0% | |
Category: Provisions Affecting Taxation of Benefits (2014 Trustees Report intermediate assumptions) | ||||||
Present law shortfall in long-range actuarial balance is 2.88 and annual balance for the 75th year is 4.90 percent of payroll. | ||||||
H1 |
Starting in 2015, tax Social Security benefits in a manner similar
to private pension income. Phase out the lower-income thresholds
during 2015-2024.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board) |
0.21 | 0.15 | 7% | 3% | |
H2 |
Starting in 2015, tax Social Security benefits in a manner similar
to private pension income. Phase out the lower-income thresholds
during 2015-2034.
graph | table | pdf-graph | pdf-table | memo (Warshawsky) |
0.19 | 0.15 | 7% | 3% | |
H3 |
Tax Reform for Individuals:
Starting in 2016, 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) |
0.04 | 0.00 | 1% | 0% | |
H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for
single filers and $100,000 for joint filers starting in 2016.
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) |
-0.12 | -0.01 | -4% | 0% |
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