Social Security Trustees Report: 

A Deep-Dive Discussion with the Program’s Actuaries

American Academy of Actuaries Webinar

April 25, 2023

Steve Goss, Chief Actuary

Karen Glenn, Deputy Chief Actuary
What is the Legislative Mandate for the 

Annual Report?

1. Trust Fund operations of the past year and the next five 

years

2. Actuarial status of the trust funds

◦ This means the ability to meet the cost of scheduled benefits 

with scheduled revenue and trust fund reserves

◦ And the extent to which scheduled revenue would fall short 

under current law, indicating the size of legislative changes that 

will be needed

2
Primary Change This Year

1. “Since the assumptions for last year’s report were set, the Trustees have 

reassessed their expectations for the economy in light of recent 

developments, including updated data on inflation and output, and have 

revised down the levels of gross domestic product (GDP) and labor 

productivity by about 3 percent over the projection period.” 

2. These assumptions were set in December 2022 and include a period of slow 

growth in 2023

3. Assumptions for GDP and productivity were essentially the same in the 2020 

and 2022 Trustees Reports

4. This reassessment therefore reflects the experience since the 2020 report, 

where neither the pandemic nor the brief 2020 recession were reflected

3
Changes in Timing of Trust Fund Reserve 

Depletion in 2023 Report

1. OASDI reserve depletion is 2034 - one year earlier than last year’s report

a) Actuarial deficit increased by 0.19 percent of payroll versus expected increase of 0.05 percent from 

change in valuation period alone

b) The change in the level of GDP and productivity alone increases the actuarial deficit by 0.13 percent of 

payroll

c) Annual deficits are larger through 2097

2. OASI reserve depletion is 2033 - one year earlier than last year’s report

3. DI reserves do not become depleted over the 75-year long-range projection period - same as 

last year

a) Applications and benefit awards remained at historically low levels in 2022

b) Gradual increase in initial applications and incidence rates to their ultimate levels start 1 year later

c) DI actuarial deficit of 0.01 percent of payroll is replaced by a positive actuarial balance of 0.01 percent

4
Reasons for Change in Actuarial Balance

in 2023 Trustees Report

Actuarial Balance: Net Change of -0.19 percent of payroll

Valuation Period - Changes the actuarial balance by -0.05 percent of payroll

Legislation etc. – Changes the actuarial balance by 0.00 percent of payroll • One-year delay in resuming approval of new DACA applications

Demographic Data/Assumptions– Changes the actuarial balance by -0.03 percent of payroll • Recent birth data and slightly lower assumed near-term total fertility rates (- 0.01 percent) • Higher near-term mortality rates due to ongoing effects of COVID-19 (+0.02 percent) • New data for fertility, immigration, marriage/divorce, and population (- 0.04 percent)

Economic Data/Assumptions– Changes the actuarial balance by -0.04 percent of payroll

• Lower levels of GDP and labor productivity (- 0.13 percent)

• Slightly faster growth in OASDI covered wages (+0.03 percent) • Slightly higher near-term interest rates (+0.02 percent) • New data and other near-term economic assumptions (+0.03 percent)

Disability Data/Assumptions– Changes the actuarial balance by +0.01 percent of payroll

• New disability data and slightly lower near-term disability incidence rates (+0.01 percent)

Methods and Programmatic Assumptions -0.06 percent of payroll

• Methodological improvements, programmatic data and other improvements and updates

5
Solvency: OASI+DI 

Trust Fund Reserve 

Depletion in 2034 

(one year earlier than last year)

Reserve depletion date 

varied from 2029 to 2042 

in reports over the past 30 

years (1994-2023).

DI Trust Fund: reserves do 

not deplete, due largely to 

continued low recent and 

near-term disability 

applications and awards.

6

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Calendar Year

Social Security Trust Fund Ratios

Assets as a Percent of Annual Cost

Trustees Report Intermediate Projections

2023 TR DI

2022 TR DI

2023 TR OASI

2022 TR OASI

2023 TR OASDI

2022 TR OASDI

Historical Projected

Tax Rate

Reallocation
Year of Reserve 

Depletion in the 

1991-2023 

Reports

The year of projected 

combined OASI and DI Trust 

Fund reserve depletion has 

been in the range of 2029 to 

2041 in the last 33 annual 

reports...

and in the range of 2033 to 

2035 in the last 12 reports. 

7
OASDI Annual Cost 

and Non-Interest 

Income as Percent 

of Taxable Payroll

Persistent negative annual 

cash-flow balance starting in 

2010.

80 percent of scheduled 

benefits still payable at trust 

fund reserve depletion.

Annual deficit in 2097: 4.35 

percent of payroll: 0.09 

percent larger than last year.

8

0%

5%

10%

15%

20%

25%

2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar Year

OASDI Non-Interest Income, Cost and Expenditures 

as Percentages of Taxable Payroll

Cost: Scheduled and 

payable benefits

Cost: Scheduled but not 

fully payable benefits

Non-interest Income Expenditures: Payable benefits = income 

after trust fund depletion in 2034

Payable benefits as percent 

of scheduled benefits:

2023-33: 100%

2034: 80%

2097: 74%

Historical Projected
What Does This 

Mean for the 

Federal Debt?

(PB24 version)

President’s Budget and CBO 

both assume that current law 

will be changed in the future, 

requiring the General Fund to 

borrow from the public to 

cover any shortfalls after 

reserve depletion. 

Graph shows publicly held 

debt as a percent of GDP with 

this assumed change in law, 

and also the debt levels that 

would actually occur under 

current law and policy.

9
What Does This 

Mean for the 

Federal Debt?

(CBO version)

Note dramatically higher 

projections of debt, and 

different concavity, than in 

the President’s Budget 

version.

10
Changes in 

OASDI Annual 

Balance

Annual income rate minus 

annual cost rate.

Annual deficits are higher 

throughout the 75-year 

projection period.

The increased annual 

deficits are mainly due to 

changes in economic 

factors.

11

-6%

-4%

-2%

0%

2%

2020 2030 2040 2050 2060 2070 2080 2090 2100

Calendar Year

OASDI Annual Balances: 2022 and 2023 Trustees Reports

2022 Report

2023 Report
SUSTAINABILITY: 

Cost as percent 

of GDP

Rises from a 4.2 percent 

average in 1990-2008, 

to a peak of about 6.3 

percent for 2076, and 

then declines to 6.0 

percent by 2097.

12

0%

1%

2%

3%

4%

5%

6%

7%

8%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Calendar Year

OASDI Cost and Non-Interest Income as a Percentage of GDP

Historical Projected

Cost

Non-interest Income
Aging –

Change in Age 

Distribution

The primary reason for 

increasing cost relative 

to payroll and GDP. 

Mainly due to drop in 

birth rates.

13

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Aged Dependency Ratio 2023 TR

Population 65+/(20-64) 

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964

Historical Projected
Another Reason: 

Ratio of Taxable 

Earnings to All OASDI 

Covered Earnings

Declined since 1983 due to 

increasing concentration of 

earnings at the top of the 

distribution, particularly through 

2000.

Fluctuation in 2020 and 2021 is 

due to variation in the average 

wage, as in past recessions.

The ratio is projected to rise 

through 2024, then gradually 

converge to 82.5 percent by 

2032. Thereafter, it varies slightly 

due to changes in the share of 

covered earnings that is from 

self-employment income.

14

0.8

0.82

0.84

0.86

0.88

0.9

1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028 2032 2036 2040

Taxable Ratio 2023 TR

Historical Projected
Birth Rates—Both Period and Cohort

Note average period TFR falls from 3 to 2; expected to reach 2 in the long-term

15

Historical and Projected Total Fertility Rates by Birth Cohort
Mortality 

Experience: All 

Ages

Increased mortality in 

the near-term to reflect 

the effects of the 

COVID-19 pandemic.

16

700

750

800

850

900

950

1,000

1,050

1,100

1990 1995 2000 2005 2010 2015 2020 2025

Age-Sex-Adjusted Death Rates (per 100,000)

Total, All Ages

2014TR

2017TR

2021TR

2022TR

2023TR

Actual
Mortality 

Experience: Ages 

Under 65

Increased mortality in 

the near-term to reflect 

the effects of the 

COVID-19 pandemic.

17

200

250

300

350

400

1990 1995 2000 2005 2010 2015 2020 2025

Age-Sex-Adjusted Death Rates (per 100,000)

Ages Under 65

2014TR

2017TR

2021TR

2022TR

2023TR

Actual
Mortality 

Experience: Ages 

65 and Older

Increased mortality in 

the near-term to reflect 

the effects of the 

COVID-19 pandemic.

What will the net effect 

of the pandemic be on 

mortality in the future?

We assume offsetting 

effects for the residual 

population after the 

pandemic.

18

4,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

5,800

6,000

1990 1995 2000 2005 2010 2015 2020 2025

Age-Sex-Adjusted Death Rates (per 100,000)

Ages 65 and Older

2014TR

2017TR

2021TR

2022TR

2023TR

Actual
Ratio of Age-Sex 

Adjusted Death 

Rates to Same 

Quarter in 2019

Death rates for causes 

other than COVID have 

been about 5% higher in 

the pandemic period 

through 2022 than they 

were in 2019.

19

Source: NCHS Quarterly Provisional Estimates as of March 20, 2023

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 2022 Q3

Ratio of Age-Sex-Adjusted Death Rates to Same Quarter in 2019 

Total: all causes

Total excluding 

COVID-19
20

Change in Age-Sex-Adjusted Death Rates

Cause of Death 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 2022 Q3

Alzheimer disease 1.013 1.119 1.134 1.082 1.076 0.979 1.076 1.003 1.054 0.965 1.007

COVID-19 -- -- -- -- -- -- -- -- -- -- --

Cancer 0.995 0.965 0.994 0.986 0.975 1.000 1.021 1.009 0.970 0.975 0.988

Chronic liver disease and cirrhosis 1.063 1.116 1.252 1.256 1.286 1.241 1.315 1.282 1.277 1.179 1.198

Chronic lower respiratory diseases 0.991 0.909 0.970 0.935 0.793 0.850 1.030 0.989 0.846 0.858 0.935

Diabetes 1.013 1.170 1.222 1.200 1.149 1.108 1.253 1.186 1.157 1.057 1.116

Drug overdose 1.212 1.495 1.330 1.197 1.542 1.605 1.496 1.355 1.562 -- --

Falls, ages 65 and over 1.007 1.013 1.069 1.084 1.123 1.167 1.184 1.215 1.183 1.159 --

Firearm-related injury 1.071 1.101 1.202 1.212 1.204 1.244 1.250 1.246 1.221 1.235 --

Heart disease 0.992 1.048 1.070 1.054 1.039 1.033 1.128 1.102 1.064 1.015 1.055

HIV disease 1.000 1.000 1.000 1.077 0.933 0.857 1.000 1.077 0.933 0.929 1.000

Homicide 1.109 1.267 1.359 1.387 1.327 1.417 1.359 1.306 1.309 1.317 --

Hypertension 1.021 1.149 1.171 1.165 1.175 1.115 1.256 1.242 1.175 1.138 1.183

Influenza and pneumonia 1.143 1.052 1.045 0.939 0.629 0.774 1.135 1.053 0.674 0.835 0.966

Kidney disease 1.007 0.984 1.034 0.977 1.044 1.024 1.120 1.076 1.140 1.073 1.120

Parkinson disease 1.032 1.157 1.157 1.128 1.097 1.084 1.157 1.117 1.129 1.084 1.120

Pneumonitis due to solids and liquids 0.943 0.870 1.000 0.957 0.925 1.022 1.195 1.170 1.000 1.043 1.049

Septicemia 1.000 1.011 1.057 1.020 1.000 1.000 1.172 1.122 1.019 1.043 1.103

Stroke 1.018 1.042 1.080 1.060 1.098 1.095 1.144 1.112 1.127 1.073 1.103

Suicide 1.000 0.923 0.966 0.977 0.985 0.979 1.007 1.060 1.022 1.021 --

Unintentional injuries 1.086 1.216 1.216 1.146 1.307 1.355 1.318 1.269 1.341 1.255 --

Total 1.025 1.201 1.180 1.265 1.254 1.103 1.302 1.252 1.231 1.062 1.117

Total w/o COVID 1.016 1.046 1.077 1.055 1.044 1.054 1.132 1.104 1.069 1.042 1.081

Source: NCHS Quarterly Provisional Estimates as of March 20, 2023

Change in Age-Adjusted Death Rates from the Same Quarter in 2019, by Cause of Death
Lower Real GDP 

Trajectory in 

2023 TR

Starting with a slowing 

of growth in 2023, the 

level of real GDP is 

projected to be about 3 

percent lower than the 

level projected in the 

2020 and 2022 TRs over 

the projection period.

21

14,500

16,500

18,500

20,500

22,500

24,500

26,500

2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031

Real GDP

(billions of 2012 dollars, adjusted for NIPA methodological changes, 

intermediate assumptions)

2010 TR

2020 TR

2021 TR

2022 TR

2023 TR

Historical Projected
However, for Now, 

the Economy Is 

Exceeding 

Expectations

Slowdown in 2023 

appears less than 

assumed by Trustees 

and CBO.

Private forecasters are 

now expecting better 

for 2023. Trustees and 

CBO in about the 

middle by 2026.

22
Ratio of 

Employment to 

Population

Recovered strongly 

from the brief but steep 

2020 recession. 

After the assumed 

slowdown in growth in 

2023, the ratio is 

projected to return to 

about the peak level of 

2019.

23

0.45

0.50

0.55

0.60

0.65

0.70

0.75

1981 1991 2001 2011 2021 2031 2041 2051 2061 2071 2081 2091

Ratio of Employment to Population 

(16 and older, age-sex-adjusted to 2011 population)

2022 TR

2023 TR

Age-sex-adjusted

Men (age-adjusted)

Women (age-adjusted)

Historical Projected
Ratio of 

Employment to 

Population vs. 

Quits Rate

The quits rate represents the 

number of voluntary separations 

(when an employee voluntarily 

leaves a job, regardless of 

whether it is followed by taking a 

job with a different employer) as 

a percentage of total 

employment.

Elevated quits rates suggest a 

tight labor market, in which 

workers are able to switch jobs 

easily, and usually correspond to 

periods of a high (or rising) ratio 

of employment to population.

24

0

0.5

1

1.5

2

2.5

3

3.5

0.50

0.55

0.60

0.65

0.70

2001Q12001Q32002Q12002Q32003Q12003Q32004Q12004Q32005Q12005Q32006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q12014Q32015Q12015Q32016Q12016Q32017Q12017Q32018Q12018Q32019Q12019Q32020Q12020Q32021Q12021Q32022Q12022Q3

Quits Rate versus Ratio of Employment to Population

(16 and older, age-sex adjusted)

Quits Rate

E/Pop 
Employment Over Age 65...

25

declined briefly with the 2020 recession, but is projected to continue rising. How much of this is 

from changing the NRA and earnings test? Is the best retirement approach a job (Paul Samuelson)?

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Ratio of Employment to Non-Institutionalized Population, Men, by Age

25-54

55-59

60-64

65-69

70 and older

Start of 2008 

recession

Start of 2020 

recession

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

Ratio of Employment to Non-Institutionalized Population, Women, by Age

25-54

55-59

60-64

65-69

70 and older

Start of 2008 

recession

Start of 2020 

recession
Age of Starting Social Security 

Retirement Benefits

26

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Female Retired Worker Beneficiaries In Current Payment Status as 

Percent of Insured Population 

(excluding those receiving only some other OASDI benefit)

62.5 63.5 64.5 65.5 66.5 67.5 68.5 69.5 70.5

Recession

Eliminate Earnings 

Test Over NRA

Deemed Filing 

applies to all Retired 

Workers

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Male Retired Worker Beneficiaries In Current Payment Status as 

Percent of Insured Population 

(excluding those receiving only some other OASDI benefit)

62.5 63.5 64.5 65.5 66.5 67.5 68.5 69.5 70.5

Recession

Eliminate Earnings 

Test Over NRA

NRA starts

increase 

over 66
Applications for 

Disability 

Benefits Remain 

Historically Low

At the peak of the last 

economic cycle in 2007, 

applications were low, but 

increased rapidly in the 

2008 recession from 1.5 

million in 2007 to 1.9 

million in 2010.

In 2017 through 2022, 

applications have dropped 

below the 2007 level.

27

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031

(millions)

Social Security Disabled Worker Receipts at Disability Determination 

Services by Calendar Year: Historical and Intermediate Assumptions for 

2012 through 2023 Trustees Reports

2012TR

2017TR

2016TR

2015TR

2014TR

2013TR

2018TR 2019TR

2020TR

2021TR

2022TR 2023TR

2012TR

2017TR

2016TR

2015TR

2014TR

2013TR

2018TR 2019TR

2020TR

2021TR

2022TR 2023TR
Disability 

Incidence Rate 

Also Remains 

Historically Low

DI disabled worker 

incidence rate rose sharply 

in the 2008 recession, and 

has declined since the peak 

in 2010 to extraordinarily 

low levels in 2016 through 

2022.

What will be the NET effect 

of COVID and post-COVID 

conditions? 

28

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

1990 1995 2000 2005 2010 2015 2020 2025 2030

DI Age-Sex-Adjusted Incidence Rates:

Historical and Intermediate Assumptions for 2012 through 2023 Trustees Reports

2012TR

2013TR

2014TR

2015TR

2016TR

2017TR

Average 1990-2022 5.0

Ultimate Assumption 4.8

2018TR

2019TR

2020TR

2021TR

2022TR

2023 TR
Fewer Disabled 

Worker 

Beneficiaries

Fewer now and in near 

term based on recent 

applications and 

incidence rates, with 

assumed increases 

deferred another year.

29

6,000

7,000

8,000

9,000

10,000

11,000

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032

Calendar Year

Disabled Worker Beneficiaries

In Current Payment Status at End of Year (in thousands)

2008 TR (no recession)

2022 TR

2023 TR
Disabled Worker 

Prevalence Rates

Will prevalence recover 

to a level above that 

seen before the 2007-

09 recession? 

The TR projections 

assume the incidence 

rate will ultimately rise 

to 4.8 per thousand, 

from the levels seen 

since 2016 of between 

3 and 4.3 per thousand.

30

0

10

20

30

40

50

60

70

80

90

100

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Calendar year

DI Disability Prevalence Rates, 1970-2100

Gross prevalence rates

Age-sex-adjusted prevalence rates

III

II

I

Historical Projected

II

I

III
Replacement 

Rates From the 

2023 TR

31

Source: Annual Recurring Actuarial Note #9 at www.ssa.gov/oact/NOTES/ran9/index.html

0

10

20

30

40

50

60

70

1940 1960 1980 2000 2020 2040 2060 2080 2100

Calendar Year

Scheduled Monthly Benefit Levels as Percent of Career-Average 

Earnings by Year of Retirement at age 65

Low Earner ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected

Benefit levels for 

selected retirees as a 

percent of their 35-year 

career average wage 

indexed earnings, in 

addition to showing real 

growth in benefit levels
32

Payable Benefits 

Under the Law, 

After Trust Fund 

Reserves Are 

Depleted, Are 

Even Lower

Source: Annual Recurring Actuarial Note #9 at www.ssa.gov/oact/NOTES/ran9/index.html

0

10

20

30

40

50

60

70

1940 1960 1980 2000 2020 2040 2060 2080 2100

Calendar Year

PAYABLE Monthly Benefit Levels as Percent of Career-Average Earnings 

by Year of Retirement at age 65

Low Earner ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected
How About at 

Age 62, Where 

Many Start 

Benefits?

33

Source: Annual Recurring Actuarial Note #9 at www.ssa.gov/oact/NOTES/ran9/index.html

0

10

20

30

40

50

60

70

1960 1980 2000 2020 2040 2060 2080 2100

Calendar Year

Scheduled Monthly Benefit Levels as Percent of Career-Average 

Earnings by Year of Retirement at age 62

Low Earner ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected
34

Payable Benefits 

Under the Law, 

After Trust Fund 

Reserves Are 

Depleted, Are 

Even Lower

Source: Annual Recurring Actuarial Note #9 at www.ssa.gov/oact/NOTES/ran9/index.html

0

10

20

30

40

50

60

70

1960 1980 2000 2020 2040 2060 2080 2100

Calendar Year

PAYABLE Monthly Benefit Levels as Percent of Career-Average 

Earnings by Year of Retirement at age 62

Low Earner ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected
How to Eliminate the Social Security 

Long-Term Actuarial Deficit

Make choices addressing OASDI shortfall 2034-2097:

• Raise scheduled revenue by 2034 by about one-third

• Reduce scheduled benefits by 2034 by about one-fourth

• Or some combination of the two

35
Ways to Lower Cost

• Lower benefits for retirees – not disabled?

• Increase normal retirement age (lowers OASI cost, but increases DI cost)

• Can exempt long-career low earners (Simpson Bowles 2010)

• Lower benefits mainly for high earners?

• Reduce PIA above some level

• Noting that higher earners generally live longer

• Lower benefits mainly for the oldest old?

• Reduce the COLA

• But, some say increase it with the CPI-E (based on purchase of consumers over age 62)

36
Ways to Increase Revenue

• Raise the 12.4 percent OASDI payroll tax rate?

• Raise tax on highest earners?

• Increase taxable maximum amount

• Some tax on all earnings above the maximum

• Provide additional benefit credit?

• Tax employer group health insurance premiums?

• Affects only middle class if taxable maximum remains

• Tax investment income?

• Or potentially a wealth tax?

37
Notable Proposals Scored—Sanders

Senator Bernie Sanders—February 13, 2023

◦ Significant provisions:

◦ Increase benefits for everyone; add a new minimum benefit

◦ Use the CPI-E rather than the CPI-W

◦ Increase taxes on those earning above $250,000, with no benefit credit

◦ Add taxes on investment income, similar to ACA approach

◦ Making these changes would have lead to 75-year solvency

◦ See https://www.ssa.gov/OACT/solvency/BSanders_20230213.pdf

38
Notable Proposals Scored—Johnson

Former Representative Sam Johnson—December 8, 2016

◦ Significant provisions:

◦ Make benefit formula less generous but more “progressive”; change to miniPIA approach; add a new minimum benefit

◦ Raise Normal Retirement Age to age 69 (8-year phase-in)

◦ Lower the COLA by using chain-weighted CPI; no COLA if high income

◦ Eliminate taxation of Social Security benefits

◦ Making these changes would have lead to 75-year solvency

◦ See https://www.ssa.gov/OACT/solvency/SJohnson_20161208.pdf

39
Notable Proposals Scored—BPC

Bipartisan Policy Center—June 9, 2016

◦ Significant provisions:

◦ Change to mini-PIA approach; add a new minimum benefit

◦ Increase the taxable maximum to $195K in 2020; index with AWI + 0.5 ppt

◦ Raise payroll tax rate from 12.4 to 13.4 percent over 10 years

◦ Raise Normal Retirement Age to age 69 (48-year phase-in)

◦ Lower the COLA by using chain-weighted CPI for OASI, not DI

◦ Making these changes would have lead to 75-year solvency

◦ See https://www.ssa.gov/OACT/solvency/BPC_20160609.pdf

40
Notable Proposals Scored—Simpson/Bowles

Simpson/Bowles Fiscal Commission—December 1, 2010

◦ Significant provisions:

◦ Index NRA to maintain life expectancy at NRA/(NRA-20); EEA=NRA-5 but allow 1⁄2 

at age 62; exempt AIME<250% poverty from increase in NRA, phase out at 400%

◦ Increase the taxable maximum by AWI + 2 ppt until 90% of earnings taxed

◦ Restore the special minimum benefit 

◦ Provide a uniform increase 20-24 years after eligibility: 5% of PIA at AIME=AWI

◦ Reduce PIA factors above 50th percentile of AIME to 30%, 10%, 5%

◦ Lower the COLA by using chain-weighted CPI

◦ Making these changes would have lead to 75-year solvency

◦ See https://www.ssa.gov/OACT/solvency/FiscalCommission_20101201.pdf

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Timing for Changes

• Historically, Congress has waited until reserve depletion is imminent 

• Given uncertainties, difficult to lower benefits or raise taxes until necessary

• Enacting “sooner” allows more options, more gradual phase in, and 

more advance notice

• Best example: 17-year delay in implementing NRA increase in 1983 

amendments

• OASDI reserve depletion now projected for 2034

• As shown earlier, the date has varied between 2029 and 2042 over the past 

33 years

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The Bottom Line

• Long-term projections provide information to assess solvency and 

changes needed to eliminate shortfalls.

• If trust fund reserves were to become depleted:

• Full benefits could not be paid timely

• NO pressure on the Budget or Federal Debt

• So Congress must act, as it always has

• Straightforward solutions:

• Add revenue and/or lower cost for OASDI

• Comprehensive changes implemented by 2034

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For More Information Go to 

http://www.ssa.gov/oact/

• There you will find:

• Current and all prior OASDI Trustees Reports

• Detailed single-year tables for recent reports

• Our estimates for comprehensive proposals and individual provisions

• Actuarial notes, including replacement rates

• Actuarial studies

• Extensive databases

• Congressional testimonies

• Presentations by OCACT employees

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