Policy Options And Long Term Projections For Social Security

Social Security (comprising Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI)) is the largest single program in the federal governments budget. In 2010, annual outlays for the program exceeded annual revenues (excluding interest) credited to the combined trust funds. A gap between those amounts has persisted since then, and in fiscal year 2015 outlays exceeded tax revenues by almost 9 percent. As the baby-boom generation retires over the next 10 years, the Congressional Budget Office (CBO) projects, the gap will widen between amounts credited to the trust funds and payments to beneficiaries. This book considers 36 policy options that are among those commonly proposed by policymakers and analysts as a means of restoring financial security to the Social Security program. Furthermore, this book presents additional information about CBOs long-term projections for Social Security in the form of 15 exhibits that illustrate the programs finances and the distribution of benefits paid to and payroll taxes collected from various groups of people.

Social Security is the federal government¿s largest single program, and as the U.S. population grows older in the coming decades, its cost is projected to increase more rapidly than its revenues. It is projected that under current law, resources dedicated to the program will become insufficient to pay full benefits in 2039. Long-run sustainability for the program could be attained through various combinations of raising taxes and cutting benefits; such changes would also affect the Social Security taxes paid and the benefits received by various groups of people. This study examines a variety of approaches to changing Social Security. Charts and tables.

The United States is in the midst of a major demographic shift. In the coming decades, people aged 65 and over will make up an increasingly large percentage of the population: The ratio of people aged 65+ to people aged 20-64 will rise by 80%. This shift is happening for two reasons: people are living longer, and many couples are choosing to have fewer children and to have those children somewhat later in life. The resulting demographic shift will present the nation with economic challenges, both to absorb the costs and to leverage the benefits of an aging population. Aging and the Macroeconomy: Long-Term Implications of an Older Population presents the fundamental factors driving the aging of the U.S. population, as well as its societal implications and likely long-term macroeconomic effects in a global context. The report finds that, while population aging does not pose an insurmountable challenge to the nation, it is imperative that sensible policies are implemented soon to allow companies and households to respond. It offers four practical approaches for preparing resources to support the future consumption of households and for adapting to the new economic landscape.