Repealing the Earnings Test Could Be Good for the Budget

Brief

Repealing the Earnings Test Could Be Good for the Budget

Abstract

Congress moved quickly to repeal the Social Security earnings test that applies to retirees between ages 65 and 69. By repealing the test, the government will no longer automatically withhold any portion of a Social Security benefit because a retiree1 earns wages. The Congressional Budget Office (CBO) estimates that this reform will reduce the federal budget surplus by $22.8 billion over the next 10 years. However, this projection does not account for the reform's long-term effects.

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