Let’s Get Specific: Social Security

Social Security is getting a lot of attention these days. However, much of the discussion is centered on what not to do: don’t cut benefits; don’t raise taxes.

The conversation needs to turn towards solutions to strengthen Social Security for future generations. The recent Social Security Trustees report makes it clear that the program is on an unsustainable course. Without changes, Social Security’s trust funds will be depleted by 2037. Reforms should be initiated now so that they can be phased in over time, mitigating their impact and providing future retirees time to plan accordingly.

In order to foster dialogue on the types of policy changes that will be required, CRFB has issued a new paper, Let’s Get Specific: Social Security. The paper is a part of CRFB’s new Let’s Get Specific series, which will offer specific ideas to help reduce the debt. The proposal is designed to start a real conversation on how to shore up Social Security’s long-term finances. Those who disagree with any of the recommendations are free to come up with their own plan that ensures the program’s long-term solvency.

The plan encourages more private savings and longer working lives while redirecting scarce resources to those most in need. Recommendations include slowly raising the retirement age to 68 and then indexing it to life expectancy; switching to an alternative measure of inflation to calculate cost-of-living adjustments; slowing benefit growth through progressive price indexing; increasing benefits for vulnerable populations; establishing add-on retirement accounts; and reforming the payroll tax to make it more progressive.

Summary of Social Security Plan



 75-Year       (% Payroll)

75th Year   (% Payroll)

Raise the early and normal retirement ages to 63 and 68, and index to longevity  n/a*  0.5%  1.2%
Use more accurate measure of inflation to calculate cost-of-living adjustments   $140  0.5%  0.7%
Slow the growth of benefits for middle- and high-income earners  $25*  1.2%  2.9%
Institute additional protections including 1) a strong minimum benefit, 2) a "super-COLA" for disabled workers, and 3) an old-age benefit "bump up"   -$15  -0.2%  -0.4%
Institute revenue neutral reform of the payroll tax to make it more progressive  n/a  n/a  n/a
Establish mandatory add-on retirement accounts   n/a  n/a  n/a
 Total  $150  2.0%  4.4%
 Shortfall    1.9%  4.1%
Note: Savings estimated and rounded, totals exclude interaction effects.      

*Savings for these options would accrue largely outside the 10-year budget window.


The plan achieves sustainable solvency and more than eliminates the program’s 75-year actuarial shortfall. It will ensure that Social Security remains an essential source of retirement security and a key part of our safety net.

This plan is not the only way to reform Social Security. Other reform options include taking into account more years worked in the benefit calculation; eliminating the payroll tax cap; and increasing the payroll tax rate. The point is to illustrate what it will take and initiate discussion on the best way to strengthen the program. The plan, as well as the other papers in the series, is not necessarily endorsed by all members of CRFB's board. 

It was released at a September 30 policy forum, “Getting Specific: How to Fix the Budget,” that brought together policymakers and experts to discuss specific ideas to confront our fiscal challenges. A paper on health care was also released and more papers will be forthcoming.