Social Security options

In 2010, for the first time since the enactment of the Social Security Amendments of 1983, Social Security’s annual outlays will exceed its annual tax revenues, CBO projects. If the economy continues to recover from the recent recession, those tax revenues will again exceed outlays, but only for a few years. CBO anticipates that starting in 2016, if current laws remain in place, the program’s annual spending will regularly exceed its tax revenues, and beginning in 2039 the Social Security Administration will not be able to pay the benefits currently specified in law. If revenues were not increased by that point, benefits would need to be cut by about 20 percent to equalize outlays and revenues. (Director's Blog)

In light of this dire outlook, the Congressional Budget Office (CBO) presents policy options for Social Security in a recent study. CBO analyzes 30 options in five categories:

• Increases in the Social Security payroll tax
• Reductions in people’s initial benefits
• Increases in benefits for low earners
• Increases in the full retirement age, and
• Reductions in the cost-of-living adjustments that are applied to continuing benefits

Social Security Policy Options, July 2010
      Report (pdf, 67pp/1.8MB)
      Summary (pdf, 4pp/148kB)
      Director's Blog, July 1, 2010