Fixing Social Security
Adequate Benefits, Adequate Financing
This report by the National Academy of Social Insurance, funded in part by the Rockefeller Foundation, considers over 30 options for bringing Social Security into long-term balance.
INTRO
The purpose of this report is to help analysts and policymakers consider options to bring Social Security into long-term balance in ways that also address concerns about benefit adequacy. According to the 2009 report of the Social Security Trustees, the program will continue to run annual surpluses until the end of 2023, at which time it will have an accumulated reserve of $4.3 trillion. Then, Social Security will gradually draw down its reserves. In the unlikely event that legislation is not enacted to address the projected shortfall, the Trustees project that all reserves will be drawn down before the end of 2037, at which point Social Security is projected to have sufficient resources to pay on time only about three-quarters of scheduled benefits. If these long-term projections hold true, it will be necessary for Congress to increase income to the system or reduce outgo at some time in the future in order to continue to pay full benefits on a timely basis after 2037. At the same time, Social Security’s benefits are modest, both in absolute terms and in terms of the percentage of wages replaced. In light of the trillions of dollars of losses in savings and home equity experienced in the last year, the adequacy of Social Security benefits is a subject of growing concern. This report presents policy options to improve the adequacy of benefits and other options to bring the Social Security system into long-term balance. Before presenting the options, we consider why Social Security benefit adequacy is a concern and the state of Social Security finances.
