“What Happens When the Social Security Trust Fund Is Exhausted: An Alternative Contingency Policy,” by Mark J. Warshawsky, AEI
“When the Social Security retirement Trust Fund is exhausted in 2032, old-age and survivor benefits in total must be cut by 24 percent, according to current projections. This is generally thought to be an across-the-board cut by the Social Security Administration, which would hit the poor particularly hard. But some are beginning to consider other, fairer ways of allocating the cuts, including limiting benefits to a certain dollar amount. But as the empirical analysis here shows, that policy too would harm those with relatively high benefits but low or modest net worths, some young survivors, and the advanced aged; it would not touch those with high net worths but relatively low benefits, for example, non-working spouses and early retirees. Instead, I propose an alternative policy on the unfortunate but now likely contingency that Congress does not enact a comprehensive reform package before exhaustion.”
LTC Comment, Stephen A. Moses, President, Center for Long-Term Care Reform:
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