Winners and Losers under Various Approaches to Slowing Social Security Benefit Growth

Under current projections, payroll tax revenues and accumulated interest in the Social Security trust fund will be insufficient to pay scheduled benefits when workers entering the labor force today reach retirement age. Given this outlook, three policy options for slowing future benefit growth are considered. Each achieves sustainable solvency according to the Flat Fund Ratio cnterion. Winners and losers across birth cohorts and income groups are identified under reforms including immediate and permanent benefit cuts, linking benefits to life expectancy and limiting initial benefit growth to price rather than wage inflation. Reforms are considered with and without a minimum benefit.