What do the current proposals do?1
|Normal Retirement Age2||Guaranteed Benefits3, 4||Cost of Living Adjustment [COLA]||Payroll Tax Rate5||Accounts6|
|S. 1792 [Moynihan and Kerrey]||68 in 2023 gradually increasing to 70 in 2073||Over the next 75 years, average benefits would be 16% lower than under the current benefit structure||Reduces COLA 1% below inflation||Cuts rate in short term but increases rate to 13.4% over longer term||2% voluntary contribution taken out of Social Security funds, publicly held|
|S. 2313 [Gregg and Breaux] H.R. 4256 [Kolbe and Stenholm]||70 in 2029 then indexed to life expectancy, 72+ in 2073||Over the next 75 years, average benefits would be 23% lower; establishes a new minimum benefit||Reduces COLA 0.5% below inflation||No change||2% mandatory carved out of Social Security funds, publicly held|
|Ball Plan May 1998||No change in current law||Benefits would be 6% lower||No change||No change||Voluntary tax advantaged supplemental accounts, publicly held|
|Gramlich Advisory Council Plan||67 in 2011 then indexed to life expectancy, 70 in 2073||Overall 25-35% cut in guaranteed benefits||No change||Increases rate 14%||1.6% mandatory new tax only for accounts, publicly held|
|Weaver-Schieber Advisory Council Plan||Same as Gramlich but also increases early retirement age||Cuts median guaranteed benefit by up to 50%; establishes a $410 monthly safety net||No change||Increases rate to 13.92%||5% mandatory carved out of Social Security and new tax, privately held|
1 This information is drawn from a number of sources including the Center on Budget and Policy Priorities, the Institute for America's Future, the ARC, Institute for Women's Policy Research, and The Preamble Center for Public Policy.
2 "Normal Retirement age" is the age at which full, rather than reduced, Social Security benefits are paid. The majority of Social Security beneficiaries retire and begin drawing benefits before this age.
3 These estimates for benefit reductions are for average workers at age 65 across several time periods during the 75 year period of Social Security analysis.
4 Reductions in guaranteed benefits will effect not only retirement benefits but also disability and survivors benefits because the changes in the benefit formula and cost-of-living provisions would apply to disability and survivor benefits as well as to retirement benefits.
5 The current payroll tax rate is 12.4% assessed on maximum taxable earnings of $68,400.
6 Accounts means proposals to increase retirement income by diverting funds into individual accounts which are privately or publicly managed or investing part of the trust funds in equities which are publicly held.