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Social Security Series Part 3: Options for Reform

GAO-24-107240 Published: Jul 31, 2024. Publicly Released: Jul 31, 2024.
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Fast Facts

Social Security is a fundamental source of income for millions of retirees and their families.

In Part 1 of this series, we reported that Social Security faces financial challenges and could be unable to pay full benefits starting in 2033. In Part 2, we identified criteria for policymakers to consider when evaluating potential reforms.

This third brief explores several reform proposals from Congress, academia, and other experts. For example, some of these ideas might address financial concerns by reducing benefits or increasing revenues. Other proposed changes might pursue goals such as modernizing the program, but increase financial pressures.

A Social Security card between three $100 bills.

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Highlights

What GAO Found

GAO focused on a range of Social Security reform options that are based on proposals introduced in Congress, identified in literature, or suggested by Social Security experts. Social Security reform proposals may combine several individual reform options into a comprehensive package. Many of the options discussed in this report would improve Social Security's finances by reducing the costs associated with benefit payments (e.g., directly reducing benefits or slowing the growth of benefits over time) or increasing program revenues (e.g., raising the payroll tax rate or increasing the amount of earnings subject to the tax). However, reform proposals may also include options that will have uncertain effects on program finances depending on the specific details of their implementation and other factors such as economic conditions (e.g., investing trust fund assets in private-sector securities). Finally, reform proposals may also include options that pursue goals unrelated to shoring up the program's finances, such as helping vulnerable beneficiaries (e.g., long-time, low-wage workers) by increasing the minimum benefit amount that the program pays.

Why GAO Did This Study

Social Security, the bedrock of the U.S. retirement system, faces serious financial challenges. Social Security's Old-Age and Survivors Insurance benefit program is projected to be unable to pay full scheduled benefits starting in 2033. At that point, if no action is taken to reform the program to shore up its finances, Social Security revenue is projected to be able to pay retirees just 79 percent of their scheduled benefits.

This is the last in a series of three GAO reports that outline (1) Social Security's financial challenges, (2) criteria for evaluating proposals for reforming Social Security to address its financial challenges, and (3) proposed options for reforming Social Security.

For more information, contact Tranchau (Kris) T. Nguyen at 202-512-7215 or nguyentt@gao.gov.

Full Report

GAO Contacts

Tranchau (Kris) T. Nguyen
Director
Education, Workforce, and Income Security

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Sarah Kaczmarek
Managing Director
Office of Public Affairs

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Topics

BeneficiariesDisability insuranceGovernment reformLife expectancyPayroll taxesPrice inflationRetirement ageSocial security benefitsSocial security reformTaxesWorkers