December 6, 2010
Revitalizing Social Security
New proposals from the National Commission on Fiscal Responsibility and Reform have reignited the debate over the future of Social Security. Chairmen Erskine Bowles and Alan Simpson's recommendations include changing the Social Security benefit formula, increasing the share of earnings subject to payroll taxes, altering the way cost-of-living adjustments are determined, and raising the retirement age. Recent publications from the Urban Institute's Program on Retirement Policy help policymakers and the public sort through the possible consequences of these and other proposed changes.
The Future of Social Security: Solvency, Work, Adequacy, and Equity
Social Security is facing a $5.4 trillion shortfall, but modest adjustments now can restore solvency. A new brief summarizes the issues and the fixes, including combinations of increasing revenue, shortening the retirement period, and cutting monthly benefits. It also examines whether solvency is enough or if more should be done to ensure benefit adequacy and equity.
Capitol Hill Forums on the Future of Social Security
The Program on Retirement Policy convened three panels this year to assess Social Security's future and discuss options for reform. Listen to the full debate:
Adjusting Social Security Benefits for Changes in the Cost of Living
The October announcement that Social Security beneficiaries will not get a cost-of-living adjustment (COLA) for the second straight year has focused attention on how these adjustments are calculated. In an online video and brief, Urban Institute Fellow Rudolph Penner describes how the consumer price index, which is used to adjust benefits, overstates inflation and how other options could eliminate this upward bias.
Why Do Some Workers Have Low Social Security Benefits?
Although Social Security is the foundation of economic security for millions of older Americans, some retired workers don't get enough benefits to stay out of poverty. Various reforms could help. Caregiving credits or a well-designed minimum benefit could aid beneficiaries with intermittent work histories. Policymakers could help long-term, low-wage workers by adjusting Social Security's benefit formula, creating a higher minimum benefit, or enhancing the existing special minimum benefit.
Raising the Retirement Age
Increasing Social Security's retirement age would promote work at older ages, improve the system's solvency by shortening retirements and reducing lifetime benefits, and better target benefits to the oldest Americans. It could, however, create hardship for workers with health problems unless Congress improves the disability safety net. This fact sheet reports key data in the arguments for and against increasing the retirement age.
Recent Appointments
Melissa Favreault, a senior research associate in the Program on Retirement Policy, has been named to the Social Security Advisory Board's technical panel, which provides expert advice on the assumptions and methods used by the Social Security trustees.
Robert Reischauer, president of the Urban Institute, was sworn in as a public trustee of the Social Security and Medicare trust funds on October 26. He was appointed by President Obama and confirmed by the Senate.
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