Options for Social Security Reform
GAO-05-649R: Published: May 6, 2005. Publicly Released: May 6, 2005.
This report provides a list of the various options available to reform the Social Security program. It includes a table that lists a wide range of provisions that various proposals have used in some form. In addition, there is a list of such proposals, all of which have been scored by the Social Security Administration's Office of the Chief Actuary (SSA/OCACT). Our list of provisions is intended to be generic and conceptual in nature. The list attempts to reflect, in general terms, all provisions that have appeared in SSA-scored proposals in the past few years. For each generic provision, a variety of approaches and parameters could be applied and have been proposed. For example, provisions to raise the retirement age take a variety of forms, including simply speeding up the currently scheduled increase from age 65 to 67, increasing the full retirement age to 68 or 70, indexing the retirement age to improvements in longevity, and even combinations of these. All of these variations have been consolidated into one general provision for increasing the retirement age. The table also briefly discusses each reform option in general terms according to GAO's framework for evaluating Social Security reform proposals, which is described below. Our observations draw on GAO's extensive body of work evaluating various aspects of Social Security reform.
GAO's framework for evaluating reform proposals considers not only solvency but other aspects of the program as well. Specifically, the framework uses three basic criteria: the extent to which a proposal achieves sustainable solvency and how it would affect the economy, including overall savings rates, and the federal budget; the relative balance struck between the goals of individual equity (rates of return on individual contributions) and income adequacy (level and certainty of benefits); and how readily a proposal could be implemented, administered, and explained to the public. The weight that different policy makers may place on different criteria will vary, depending on how they value different attributes. For example, if policy makers determine that offering individual choice and control is a primary concern, then a reform proposal emphasizing individual equity considerations might be preferred. Alternatively, if policy makers determine that benefit certainty and security are of primary concern, then reform proposals that stress adequacy and sustainable solvency might be preferred. As the Congress fashions a comprehensive proposal, however, it will ultimately have to consider the relative importance it places on each of these criteria.