To design policies that ensure justice for all, we need tools for estimating not just a proposal’s price tag but its fairness. Part of a set of demonstration analyses that use the Equity Scoring Initiative’s dimensions of equity improvement to structure equity assessments, this report shows the potential impact of the Social Security Expansion Act (S. 393, SSEA), a leading Social Security reform proposal introduced by Sen. Bernie Sanders (I-VT) in February 2023. We assess the SSEA for its projected impact on improving equity in key outcomes including lifetime benefits, lifetime benefits minus contributions, and economic security provision by provision, and overall, across three racial-ethnic groups: Black, Hispanic, and white.
Why This Matters
This is the first equity scoring analysis applied to a national program that offers benefits to people from all walks of life, throughout the income and wealth distribution. This report focuses on Social Security, a government program that nearly every worker pays into and from which they can expect to receive payment later in life. While Social Security’s financial solvency is hotly debated and the program is considered politically fraught to reform, this report considers what we can learn about measures of fairness in the distribution of federally managed funds and equity in the economic security those funds are designed to support.
What We Found
The SSEA meets all three dimensions of equity improvement for the outcome of economic security. We project that the bill would improve economic security in retirement for the three groups we are able to analyze, and especially for Black non-Hispanic and Hispanic adults, thereby shrinking the Black-white and Hispanic-white gaps in economic security.
We find that the improvements in economic security are largely driven by the proposal’s expansion of the taxable wage base, which would allow Social Security to pay all benefits scheduled under current law instead of having to cut them by about one-quarter. Other reforms included in the proposal would have more modest effects.
For the other outcomes, the SSEA’s potential for enhancing equity is mixed. It improves total lifetime benefits and net lifetime benefits within historically disfavored groups and for all groups, but it widens gaps in those outcomes between groups. These findings suggest the need for multipronged approaches to advance equity.
Our analyses underscore the importance of examining equity in terms of outcomes, both those directly affected by the policy being evaluated (e.g., Social Security contributions, benefits, and net benefits) as well as more indirect outcomes like economic security, which Social Security can shape but cannot determine alone. Technical and conceptual analysis in this demonstration report can set the stage for how entities that regularly conduct analysis of large-scale legislation could approach an equity assessment of proposals and their provisions.
How We Did It
We use dynamic microsimulation techniques to model the projected impact of the SSEA on a set of key outcomes for future beneficiaries. The analysis compares outcomes for Hispanic beneficiaries, Black non-Hispanic beneficiaries, and white non-Hispanic beneficiaries, to assess whether the bill would promote equity across these racial and ethnic groups. We use the SSEA for this demonstration analysis because it includes many of the provisions featured in other recent congressional bills that would increase Social Security benefits, such as the Social Security 2100 Act introduced by Rep. John Larson (D-CT) in July 2023. Republicans in Congress, who generally advocate restraining Social Security spending instead of expanding benefits, have not recently introduced a comprehensive Social Security plan. This analysis is primarily for illustrative purposes to understand implications for fairness in outcomes, and it does not endorse any particular plan or provision. We then examine the policy proposal across three dimensions of equity improvement: within-group improvement for disfavored groups as well as for all groups and between-group improvement for disfavored groups,
