Progressivity Analysis of Sen. Graham's Social Security Proposal

The Social Security Administration (SSA) has published an in-depth analysis of Senator Lindsey Graham's Social Security reform proposal. (Note -- this is a large file that will take a few seconds to load.)

SSA has also prepared some summary charts.

Here are some highlights:

1. The plan would slightly increase the progressivity of the Social Security program. Low-income retirees would fare a little better, while high-income retirees would receive relatively lower benefits. However, both high- and low-income retirees would do better under the Graham plan in the long run, at least compared with the benefits payable at currently scheduled tax rates.

2. By 2061, overall benefits would be about 27 percent higher than those payable at currently scheduled tax rates. However, this is about 12 percent lower than the benefits currently scheduled (but not funded) in the law.

3. By 2061, workers would depend on their personal accounts for over 50% of their Social Security income.

4. Over a 75-year period, the transition costs of the Graham plan would be roughly half the cost of funding currently promised benefits.

Links:
Andrew Biggs, Social Security Administration Highlights of distributional analysis of the Graham proposal (September 21, 2004)

Andrew Biggs, Social Security Administration Distributional Analysis of S. 1878, the Social Security Solvency and Modernization Act of 2003 (September 7, 2004)

Centrists.Org Social Security "Add-On" Accounts with Benefit Offset (revised September 27, 2004)

Centrists.Org Testimony: Comparing Social Security Reform Proposals (June 15, 2004)

Centrists.Org Issue Summary: Social Security (updated June 6, 2004)

Posted by Jeff Lemieux at October 17, 2004 08:25 PM