The Brookings Institution has a bipartisan plan to do just that.
Nonmprofit thinktank the Brookings Institution released a report earlier this month posing a bipartisan solution to strengthen and restore Social Security in the United States.
The paper, entitled “Fixing Social Security: Blueprint for a Bipartisan Solution,” proposes a way forward that bridges the divide between the two major political parties – Democrats and Republicans.
According to the Social Security Administration’s (SSA) Office of the Chief Actuary and the Congressional Budget Office (CBO), Social Security, technically known as the Old-Age and Survivor Insurance (OASI) Trust Fund, will exhaust its funds in 2033 if no policy changes are made it.
That means the Social Security program would become insolvent. So, at that point, the ongoing revenues to the OASI Trust Fund would finance about 83% of scheduled benefits, which implies that beneficiaries would see a 17% reduction in benefits.
“According to the 2024 Social Security Trustee’s Report, today Social Security faces a deficit of 3.5% of taxable payroll,” the report says. “This deficit is about 1.7 times greater than the 2.09% of taxable payroll deficit in 1983, when amendments to the Social Security Act were last enacted to restore solvency to the program.”
Democrats and Republicans generally have two opposite views of fixing Social Security. Democrats would restore it by raising revenue, while Republicans seek to restore it by reducing benefits.
So, what does Brookings think?
The Brookings blueprint, authored by Wendell Primus, Tara Watson, and Jack Smalligan, says compromise and a more centrist approach is needed. It proposes to achieve solvency without introducing new revenue sources or changing the structure of the formula for calculating benefits.
The tax-based revenue enhancements include, but aren’t limited to:
- Increasing the taxable maximum ceiling so it eventually covers 90% of total wages;
- Changing rules for pass-through payroll tax; and
- increase payroll tax to 12.6% from its current level of 12.4%.
The benefit reductions include, but aren’t limited to:
- Increasing the retirement age for high earners, the top one-fifth of lifetime wages, to 70 in 2054;
- Increasing the number of working years used to calculate Social Security’s average indexed monthly earnings;
- Taxing all Social Security benefits of high earners; and
- Ending the dependent retiree spouse benefit;
- Eliminating Child Retiree Benefits;
Further, the plan calls for increasing survivor benefits, creating a disability benefit for older workers with disabling conditions that make them unable to do their jobs; restoring and expanding student benefits for children whose parents are disabled or dead; providing a child benefit to grandparents or certain other relatives caring for children; and improve benefits for disabled adult children.
“The blueprint makes the system more progressive, achieves universal participation, and does not rely on general fund borrowing or financing,” the authors write. “Compared with alternatives, it has better prospects of securing Democratic and Republican support and maintaining what always has been the bipartisan nature of the program.”
Time will tell if Washington can coalesce around this plan, or some semblance of it to save Social Security.
