Key Points:

• All seven packages approximately close a 75-year shortfall of 4.78 percent of taxable payroll and avoid depletion of the combined OASDI trust fund through 2100. Package A (“tax-only”) raises summarized income by 35 percent and leaves cost unchanged, while Package F (“benefit-only”) cuts cost by 28 percent and adds no revenue provisions.

• By 2060, GDP is 0.4 percent above baseline under Package A (“tax-only”) and 12.1 percent above baseline under Package F (“benefit-only”), with private capital up 1.9 percent and 26.6 percent, respectively. Package A (“tax-only”) leaves GDP largely unchanged relative to pure debt financing. Consumption is below baseline in every package through 2050 and, in 2060, is above baseline only under the two packages with the largest benefit reductions. Changes in U.S. Treasury debt are an incomplete guide to these macroeconomic differences, because most of the changes in intergenerational transfers produced by Social Security are “implicit” (pay-as-you-go).

• Every package produces losses for older current workers and near-retirees and gains for future households. Both the losses and the gains are largest in the packages that reduce benefits the most. Under Package F, a middle-quintile household aged 60 in 2027 loses about $80,600 in lifetime welfare while a middle-quintile household born in 2032 gains about $113,900. Under Package A the corresponding figures are a $2,500 loss and a $3,800 gain.

Background

Upon claiming benefits, Social Security calculates old-age benefits using wage indexation, which adjusts retirees’ earnings histories for both inflation and real (after-inflation) wage growth over their working years. This approach is intended to help maintain beneficiaries’ standard of living across generations. After retirement, benefits are protected against inflation through annual cost-of-living adjustments and are paid for life, providing an inflation-indexed lifetime annuity that private markets rarely offer.

But demographic change and rising benefit obligations per retiree are straining the program’s finances. PWBM projects that the Old-Age and Survivors Insurance (OASI) trust fund depletes in February 2033 and that the combined OASI and Disability Insurance (OASDI) fund depletes in February 2035. At that point, payable benefits fall to 85 percent of scheduled benefits, declining to 60 percent by 2100, the end of the 75-year projection window. This brief uses PWBM’s September 2026 baseline, which has a 75-year shortfall of 4.78 percent of taxable payroll. PWBM’s Social Security Outlook, June 2026 projected the same depletion dates with a shortfall of 4.65 percent and 86 percent of benefits payable at depletion; the 2026 Trustees Report projects depletion in the fourth quarter of 2032 for OASI and the third quarter of 2034 for the combined fund, with a 4.42 percent shortfall and 83 percent of benefits payable at depletion.

Current Policy and Seven Reform Packages

Table 1 summarizes the provisions of current policy and of the seven packages. The packages are ordered from tax-only (A) to benefit-only (F), with Package G a balanced mix. All provisions not listed for a package follow current policy. Tax changes take effect in 2027, while benefit-formula changes phase in gradually for newly eligible beneficiaries, mostly between 2028 and 2047. Detailed provision descriptions appear in the Appendix. PWBM’s Policy Packages interactive reports estimates for each package as a whole, including its dynamic economic effects. The Individual Provisions interactive reports conventional estimates of individual reform proposals, including complementary provisions, without economic feedback. Each package and provision below links directly to its detailed estimates.

Current policy. The combined OASDI payroll tax rate is 12.4 percent, split evenly between employer and employee, and applies only to earnings up to the taxable maximum, which is projected to be $191,400 in 2027 (the official figure is announced in mid-October) and grows with average wages. Benefits at retirement are computed from the primary insurance amount (PIA), a progressive formula that replaces 90 percent of average indexed monthly earnings up to a first bend point, 32 percent between the first and second bend points, and 15 percent above the second bend point. Benefits in payment grow each year with the CPI-W, the Consumer Price Index for Urban Wage Earners and Clerical Workers. The full retirement age is 67 for workers born in 1960 or later, and delayed retirement credits accrue until age 70.

A brief summary of each package is as follows. Click on any package’s blue link for more details and analysis not covered in this brief:

Package A (tax-only) leaves benefits untouched. It raises the combined payroll tax rate to 13.73 percent in 2027 and indexes the rate to longevity thereafter, reaching 15.63 percent by 2100. It raises the taxable maximum to $332,100 in 2027, wage-indexed thereafter, and applies a surtax equal to half the contemporaneous combined OASDI rate (about 6.87 percent in 2027) to earnings above the new maximum. Earnings above the current-law cap earn no additional benefit credit.

Package B (tax-heavy) keeps the same rate schedule and $332,100 cap as Package A but replaces the half-rate surtax with a 3 percent surtax above the cap. It adds two benefit provisions: cost-of-living adjustments switch to the chained CPI, and from December 2027 the COLA applies only to the portion of the PIA up to a threshold linked to the second bend point.

Package C (tax-leaning) keeps Package A’s rate schedule and $332,100 cap with no surtax. It adopts Package B’s chained-CPI and second-bend-point COLA provisions and reduces the PIA factors from 90/32/15 to 90/30/13, phased in for beneficiaries becoming eligible between 2028 and 2047.

Package D (benefit-leaning) raises the payroll tax rate to 13.32 percent in 2027, longevity-indexed to 14.43 percent by 2100, and raises the taxable maximum to $250,000. On the benefit side it adopts the chained CPI with a second-bend-point COLA cap, reduces the PIA factors to 90/26/9 over 2028 to 2047, and raises the full retirement age from 67 to 69 at two months per birth year for workers born 1983 to 1994, with the maximum delayed-retirement-credit age rising to 72.

Package E (benefit-heavy) raises the payroll tax rate by 0.8 percentage points to 13.2 percent from 2027 and leaves the taxable maximum at its current-law level. It adopts the chained CPI with a tighter COLA cap at the first bend point, reduces the PIA factors to 90/26/9, and raises the full retirement age to 69 on the same schedule as Package D.

Package F (benefit-only) makes no tax change. It adopts the chained CPI with a first-bend-point COLA cap, applies the largest PIA reduction, to 90/22/5, and raises the full retirement age from 67 to 70 at two months per birth year for workers born 1983 to 2000, with the maximum delayed-retirement-credit age rising to 73.

Package G (balanced) combines Package D’s rate schedule with Package A’s $332,100 taxable maximum, the chained CPI with a second-bend-point COLA cap, PIA factors of 90/28/11, and a full retirement age indexed to longevity that reaches about 68 years and 6 months for workers born in 2038, who turn 62 in 2100.

Standard Accounting Metrics Show Seven Similar 75-Year Balances

Table 2 reports the standard 75-year metrics for the baseline and each package. Under current policy, the summarized income rate is 13.64 percent of taxable payroll and the summarized cost rate is 18.42 percent, leaving a long-range deficit of 4.78 percent of payroll. In words, raising the combined employee-employer payroll tax rate from 12.4 percent to 17.18 percent of payroll would provide just enough resources to cover scheduled benefits over the next 75 years on a conventional basis, without any labor market, capital market, or health care market responses.

All seven packages improve the 75-year balance by 4.72 to 4.86 percentage points of payroll, leaving balances between −0.05 percent (Package A) and +0.08 percent (Package F). None of the packages depletes the combined OASDI fund within the 75-year window if the two legally separate funds are treated as pooled, and each supports full scheduled benefits in 2100. Every package’s annual non-interest balance is negative again by 2100, and every package’s trust fund ratio is below its own peak by then (Figures 1 and 2).

Package A raises the summarized income rate from 13.64 to 18.36 percent of payroll, an increase of 35 percent, while leaving the cost rate at 18.42 percent. Package F leaves the income rate 2 percent lower than baseline, at 13.37 percent, and instead cuts the cost rate by 28 percent, to 13.29 percent. The remaining packages fall between them: B raises income by 30 percent and cuts cost by 3 percent, C by 28 and 6 percent, G by 20 and 11 percent, D by 15 and 15 percent, and E by 4 and 23 percent.

Considered on its own, the OASI fund still depletes within the window under every package, but Packages A through E and G delay depletion from February 2033 to between June 2076 (Package D) and March 2083 (Package B). Package F’s combined solvency depends on pooling OASI with DI: its OASI fund alone depletes in September 2034, only 19 months later than under current policy, because its benefit reductions phase in too slowly to close the OASI gap before the fund runs out.

Financing Paths Differ in Timing

Figure 1 traces the combined OASDI trust fund ratio. Figure 2 reports the annual non-interest balance, a standard metric equal to projected non-interest income less benefits paid in a given year, expressed as a percent of baseline taxable payroll.

Under current policy, the ratio falls from 169 percent in 2025 to 1 percent in 2035, the year the combined fund depletes, and zero thereafter. Packages A, B, and C build the ratio quickly and then draw it down: Package A peaks at 413 percent in 2057 and falls to 90 percent by 2100, while Packages B and C both peak in 2059, at 404 and 372 percent, and end at 119 and 137 percent. Packages D, E, F, and G accumulate more slowly and peak later: G at 305 percent in 2062, D and E at 215 and 262 percent in 2069, and F at 173 percent in 2092. Because cost keeps growing while reserves are drawn down, the ratio peaks well before reserves do in nominal dollars, by about two to three decades in every package except F, whose nominal reserves are still rising in 2100. Package F comes closest to depletion along the way, with its ratio falling to 18 percent in 2041 before the benefit provisions take hold, and it ends the window with the highest ratio, at 170 percent.

Packages A, B, and C move the annual balance from −2.56 percent of payroll under baseline in 2027 to positive territory in that same year, because tax increases take effect immediately. Their annual surpluses peak in 2046 at 2.40, 2.38, and 2.16 percent of payroll, respectively, and turn negative again around 2060 as costs continue to rise. Packages D, E, F, and G start in deficit and shrink it gradually as benefit provisions phase in: Package G turns positive in 2031, D and E in 2036, and F not until 2041, with peaks of 1.66 percent (G, 2046), 1.22 percent (E, 2047), 0.97 percent (D, 2047), and 0.77 percent (F, 2053).

In 2058, Package A’s annual balance falls below that of Packages D, E, F, and G. By 2100, the annual deficit under Package A is 2.71 percent of payroll, compared with 2.39 under B, 2.03 under C, 1.51 under G, 1.12 under E, 1.07 under D, and 0.29 under F, against 8.37 percent under baseline. Packages A, B, and C prefund early and run down reserves late; Packages D, E, F, and G improve slowly and run smaller annual deficits by 2100.

Benefit Reductions Fall More Heavily on Higher Earners

Figure 3 reports the conventional change in Social Security benefits under each package, measured without behavioral responses or macroeconomic feedback. It is organized by birth cohort: each point pools a cohort’s benefits across ages 65 to 95 into a single lifetime-average change, so the phase-in of each package’s provisions reads as one trajectory across cohorts. Within each cohort, individuals are ranked into quintiles by lifetime earnings, so that a quintile is a fixed group of people rather than a group defined by the benefits they happen to receive.¹ The pulldown selects the package.

The 2015 cohort, the latest in the model grid, is the one for which the fixed PIA, retirement-age, and COLA provisions are fully phased in; Package G’s longevity indexing of the retirement age continues beyond it. For workers born in 2015, whose benefits are received between 2080 and 2110, Package A changes benefits by less than 0.03 percent in every quintile.² Every other package reduces benefits, and in each of them the top quintile loses a larger percentage than the bottom quintile, by a factor of about 1.5 to 1.75. For the 2015 cohort, Package B reduces benefits by 4.4 percent in the bottom quintile and 6.4 percent in the top; Package C by 6.5 and 10.9 percent; Package G by 12.0 and 20.8 percent; Package D by 16.0 and 27.5 percent; Package E by 23.0 and 38.6 percent; and Package F by 28.2 and 47.8 percent. The middle quintile loses 4.1 percent under B, 7.0 under C, 14.7 under G, 19.7 under D, 29.2 under E, and 35.8 under F. The pattern is not monotonic under Package B: its cuts shrink from 4.4 percent in the bottom quintile to 3.8 percent in the fourth before jumping to 6.4 percent at the top.

The reductions build gradually across cohorts. Workers born in 1955, who are already retired when the reforms begin, are affected only by the COLA provisions: the bottom quintile loses about 2.7 percent under Packages B, C, D, and G, which cap the COLA at the second bend point, and about 9.7 percent under E and F, which cap it at the first bend point. The PIA and retirement-age reductions build across cohorts born in the 1970s and 1980s and are essentially complete for cohorts born after the mid-1990s: the middle-quintile loss under Package F rises from 10.1 percent for the 1955 cohort to 27.8 percent for the 1985 cohort and 33.6 percent for the 1995 cohort, before settling near 36 percent.

The same estimates can be read by calendar year rather than by cohort, a cross-section of everyone receiving benefits at one date rather than one cohort’s trajectory; those values are in the download workbook. In 2070, when beneficiaries aged 65 to 95 span cohorts born between 1975 and 2005, the bottom quintile loses 3.6 percent under B, 5.5 under C, 11.7 under G, 16.6 under D, 22.8 under E, and 28.6 under F, while the top quintile loses 5.5, 9.9, 19.6, 27.4, 37.6, and 46.9 percent. These values are close to the fully phased-in values for the 2015 cohort. Table 4 shows that the lifetime welfare effects of the same packages follow a different distributional pattern: among households born 25 years after reform, higher earners gain the most.

Macroeconomic Gains Are Largest Where Benefit Reductions Are Largest

Table 3 reports the effects of each package on GDP, private capital, wages, hours worked, consumption, and federal debt, computed in PWBM’s dynamic overlapping-generations (OLG) model and expressed as changes from the dynamic current-policy baseline, which finances scheduled benefits with additional federal borrowing. The dynamic results are for package variants that differ slightly from the packages in Tables 1 and 2 in the level of the higher taxable maximum. The effect of this difference on the comparison has not been quantified.³ Federal debt is reported as the percent change in the level of debt relative to baseline; the memo lines report the percent change in the debt-to-GDP ratio, which falls by more because GDP is also higher.

GDP and capital. Every package raises GDP by 2060, and the 2060 gains are larger in the packages with larger benefit reductions: GDP is 0.4 percent above baseline under Package A, 1.8 percent under B, 2.1 percent under C, 3.7 percent under G, 4.6 percent under D, 11.0 percent under E, and 12.1 percent under F. The gains build over the transition, and Packages A, B, and C start from below. Package A leaves GDP below baseline through 2050, by 0.4 percent in 2030 and 0.1 percent in 2050, and Packages B and C are 0.1 percent below baseline in 2030, while the four packages with the largest benefit reductions are above baseline in every year shown. Private capital follows the 2060 ordering, from 1.9 percent above baseline under A to 26.6 percent under F. Packages D, E, F, and G accumulate more capital through two channels: households save more for their own retirement when future benefits are lower, and lower federal borrowing leaves more private saving for productive investment.

Wages and hours. Higher capital per worker raises wages in every package, by 1.2 percent under Package A and 10.5 percent under Package F in 2060. Hours worked fall in the near term in every package except F, by 0.1 to 0.5 percent in 2030, with the largest declines in the three packages that raise the payroll tax rate the most; hours under F are 0.1 percent above baseline in 2030. By 2060, hours are above baseline under the four packages with the largest benefit reductions, from 0.2 percent under G to 1.7 percent under F, while hours under A, B, and C remain below baseline, by 0.5, 0.2, and 0.2 percent.

Consumption. Aggregate consumption remains below baseline in every package in the reported years through 2050. In 2030 the shortfall is largest under Packages E and F, at 2.5 and 2.4 percent: working-age households raise saving in anticipation of the largest benefit reductions, and the first-bend-point COLA cap reduces benefits for current retirees immediately. The shortfalls under E and F then shrink, to 0.5 and 0.2 percent in 2050, while the shortfall under Package A grows from 1.3 percent in 2030 to 2.1 percent in 2050, as higher payroll taxes reduce after-tax income while output is still below baseline. Consumption is above baseline in 2060 only under E and F, by 1.6 and 2.0 percent, and remains below baseline under the other five packages, from 0.7 percent under D to 2.1 percent under A. Those early consumption losses are the counterpart of the additional saving that produces the long-run gains.

Federal debt. All seven packages reduce federal debt relative to baseline, by 13.9 percent under Package A and 19.0 percent under Package E in 2060; the debt-to-GDP ratio falls by more, 14.2 and 27.0 percent, because GDP is also higher. The reduction in explicit federal debt is not proportional to the gain in capital and GDP: Package C reduces debt by 13.8 percent in 2060 and Package D by 12.5 percent, yet Package D’s GDP gain is more than twice C’s. While the relationship between debt reduction and GDP may seem stronger for Packages E and F that focus mostly on benefits, that relationship is due to dynamics itself. On a conventional basis all seven packages are constructed to reduce the 75-year present-value conventional shortfall (the amount covered by federal debt) by roughly the same amount.

Explicit debt tracks these gains loosely because Treasury debt does not reflect the pay-as-you-go transfers that Social Security makes from future workers to current generations. Figure 4 reports Social Security’s baseline unfunded obligations for past and current participants (age 15 or older) at $62.7 trillion, equal to the present value of benefits paid or projected to be paid (as scheduled benefits) above the taxes they have paid or are projected to pay. The 2026 Social Security Trustees Report, Table VI.F2 estimates the corresponding baseline obligation at $54.9 trillion in present value as of January 1, 2026. The estimates differ because of modeling methods: PWBM uses a bottom-up microsimulation to project demographic and economic outcomes, while the Trustees use aggregate demographic and economic assumptions.

Just like Treasury debt, these unfunded obligations (sometimes called implicit debt) reduce saving and capital formation but do not appear as Treasury debt. Unlike most Treasury debt, Social Security’s unfunded obligations are indexed to inflation, making their value harder to erode with monetization. Moreover, Social Security’s unfunded obligations are almost twice as large as the value of U.S. Treasury debt held by the public. These unfunded obligations are accounted for only “off-book” by the U.S. Treasury and OMB (Financial Report of the United States Government) as well as by the Social Security Trustees and the Medicare (CMS) Trustees. Unlike private firms governed by U.S. GAAP, the U.S. government does not regularly report a unified balance sheet.

All seven packages reduce unfunded obligations, to between $33.2 trillion under Package F and $45.3 trillion under Package A. That’s a variation of almost $12 trillion in present value, despite the fact that each package closes the conventional 75-year actuarial deficit. Indeed, Package F reduces unfunded obligations by an amount almost equal to the existing Treasury debt held by the public. The relative differences in changes between the packages are conservatively measured. Adjusting upward the entry age (age 15) for qualifying as current participants would produce even more noticeable differences.

Welfare Gains for Future Generations Come at a Cost to Current Workers

Table 4 reports each package’s equivalent variation (EV) by household age in 2027, the reference year, and income quintile. EV is the one-time payment under current policy that would leave a household as well off as it would be under the reform, measured on a lifetime basis that includes direct changes in taxes and benefits, changes in work and saving incentives, changes in the value of Social Security’s insurance against wage and longevity risk, and changes in wages and interest rates from the macroeconomic response. Positive values are gains. Negative ages denote households not yet born; an age of −25 means a household born in 2052, 25 years after the reference year. The reader can select a package from the pulldown in Table 4. Quintiles in Table 4 are formed by gross income within each age group, a different grouping from the lifetime-earnings quintiles in Figure 3, so the two exhibits should not be read as sharing an axis.⁴

Every package produces losses for older current workers and near-retirees and gains for households not yet born. In the middle quintile, a household aged 60 loses $2,460 under Package A, $18,265 under B, $18,291 under C, $19,166 under D, $18,318 under G, $81,138 under E, and $80,645 under F. A household born in 2052 gains $27,725 under A, $50,428 under B, $55,712 under C, $97,353 under G, $121,106 under D, $269,919 under E, and $306,866 under F.

The age at which gains turn to losses varies less across packages than the dollar amounts do. In the middle quintile, households born five years after reform still gain under every package, from $3,798 under A to $113,879 under F, while households aged 25 lose under Packages A, B, C, D, and G, so the crossover in those five packages lies between age −5 and age 25. Under E and F, households aged 25 still gain, $10,114 and $12,172, and the crossover lies between ages 25 and 35. Older cohorts bear the transition through the COLA provisions and lower benefits or, under Package A, the higher payroll tax, and have fewer working years in which higher wages can offset those losses. Future cohorts enter a higher-wage economy for their entire working lives and, when scheduled benefits are reduced, face a smaller implicit tax from pay-as-you-go transfers.

For households born in 2052, gains rise with income in every package, and losses among households aged 60 also rise with income in every package. Among those born in 2052, the top quintile gains between 2.2 and 3.6 times what the bottom quintile gains: under Package D, the bottom quintile gains $73,412 and the top quintile $234,172; under F, $155,694 and $554,471. Among households aged 60, losses rise from $868 in the bottom quintile to $12,145 in the top under Package A, from $11,874 to $44,605 under B, and from $49,302 to $170,193 under F. Higher earners gain the most as future workers and lose the most as near-retirees. They receive the largest wage gains over a full career, pay the raised cap and surtax where a package includes them, and, in the benefit-reducing packages, face the largest cuts from the PIA factor reductions and, under E and F, the first-bend-point COLA cap.

Table 2’s 75-year balances lie between −0.05 and +0.08 percent of payroll. Table 3’s 2060 GDP effects range from 0.4 percent above baseline under Package A to 12.1 percent under Package F. In Table 4, the middle-quintile household aged 60 loses $2,460 under Package A and $80,645 under Package F. Conventional 75-year metrics summarize solvency; they are not designed to capture these GDP or welfare differences.

Appendix: Policy Provision Details

Each provision links to its page on PWBM’s Social Security provisions site, which reports the provision’s conventional estimates on its own.

Payroll tax rate with longevity indexing. Packages A, B, and C raise the combined OASDI rate from 12.4 percent to 13.73 percent in 2027 and index it to longevity thereafter (provision E99.2). The rate is indexed to remaining life expectancy at age 65, measured against its 1983 level of 16.45 years. In 2027 the rate steps up by half the proportional gain in life expectancy since 1983, to 13.73 percent; after 2027 it rises by 1.5 times the growth in life expectancy as a share of the 1983 level, reaching 14.75 percent in 2050 and 15.63 percent in 2100, and it never decreases. Packages D and G instead multiply the current-law rate by the ratio of remaining life expectancy at 65 in each year to its 2010 level (provision E99.3): the rate steps up to 13.32 percent in 2027 and reaches 13.92 percent in 2050 and 14.43 percent in 2100. Package E applies a fixed 0.8 percentage point increase, to 13.2 percent, from 2027 (provision E99.1). In every case the rate is shared equally between employers and employees and the increase is split between OASI and DI in the current-law ratio.

Taxable maximum. Packages A, B, C, and G raise the taxable maximum from $191,400 to $332,100 in 2027, the level at which 90 percent of covered earnings would be taxable (provision E99.4); Package D raises it to $250,000 (provision E99.5). The higher maxima are wage-indexed after 2027. Earnings between the current-law cap and the new cap are taxed but earn no additional benefit credit.

Surtax above the taxable maximum. Package A applies a surtax equal to half the contemporaneous combined OASDI rate to earnings above $332,100, about 6.87 percent in 2027, rising with the longevity-indexed rate (provision E99.6). Package B applies a fixed 3 percent surtax above the same threshold (provision E99.7). Both thresholds are wage-indexed, and no benefits are credited for surtax payments.

COLA index and cap. Packages B through G switch the cost-of-living adjustment from the CPI-W to the chained CPI, which grows more slowly, so real benefits decline gradually over a beneficiary’s retirement (provision A3). From December 2027, the COLA applies only to the portion of each beneficiary’s PIA at or below a threshold linked to the second bend point (Packages B, C, D, and G; provision A99.1) or the first bend point (Packages E and F; provision A99.2). The portion above the threshold is held flat in nominal dollars, so the monthly benefit still rises each year but grows more slowly for higher-PIA retirees and never falls in nominal terms. The cap limits the amount receiving an adjustment; it does not cap the total benefit at the threshold.

PIA factors. Packages C through G reduce the second and third PIA factors, and in every case preserve the 90 percent factor that applies to the lowest earnings. The final factors are 90/30/13 under C (provision B99.1), 90/26/9 under D and E (provision B99.3), 90/22/5 under F (provision B99.4), and 90/28/11 under G (provision B99.2), phased in for beneficiaries who become eligible between 2028 and 2047. Phase-in years are eligibility years, not birth years.

Full retirement age and delayed retirement credits. Packages D and E raise the full retirement age from 67 to 69 at two months per birth year for workers born 1983 to 1994, with the maximum age for delayed retirement credits rising from 70 to 72 (provision C99.1). Package F raises the full retirement age to 70 for workers born 1983 to 2000 and the maximum credit age to 73 (provision C99.2). Package G indexes the full retirement age to longevity, reaching about 68 years and 6 months for workers born in 2038 (provision C1.3). The earliest eligibility age of 62 and survivor retirement-age rules are unchanged in every package. The conventional estimates include the increase in Disability Insurance costs that accompanies a higher full retirement age, as the Social Security Office of the Chief Actuary treats as standard.

This brief was written by Sophie Shin and Kent Smetters, based on analysis by Jon Huntley, Mariko Paulson, and Sophie Shin.

Footnotes

1. The measure is the percent change in benefits received under the package relative to current policy: the ratio of package to current-policy benefits, minus one, summed over ages 65 to 95 within each birth cohort and quintile, weighted by benefit dollars, in nominal dollars and undiscounted. Quintiles are fixed within-birth-cohort lifetime-earnings quintiles from an uncapped earnings-history proxy. Spousal and survivor-only recipients without covered earnings are excluded. The source grid covers births 1955 to 2015 and ages 62 to 99, observed from 2027 onward, so the 1955 cohort is observed from age 72 and the 2015 cohort’s ages 65 to 95 fall in 2080 to 2110. A full cross-section of beneficiaries in 2100 cannot be built from it; the 2015 cohort is the closest equivalent. ↩

2. Package A’s small nonzero changes arise from the adjustment to self-employment (SECA) earnings that accompanies the higher payroll tax rate, not from any benefit provision. ↩

3. Conventional results (Tables 1 and 2, Figures 1 through 4) are from PWBM’s conventional microsimulation. Dynamic results (Tables 3 and 4) are from PWBM’s dynamic OLG model and are reported annually through 2071. Table 3 stops at 2060 because the model imposes a fiscal closure rule around that year, so later values reflect the closure rule rather than the packages. ↩

4. Table 4 reports eight source ages with no age averaging. Ages 5 and 15 are omitted because the source export returns zero for several of their cells in Packages A, B, and C. ↩