Blueprint Goals

In order to guide the plan, Brookings established a set of goals and principles. Their most important goal is long-term solvency; in addition, Brookings cites six other objectives for their proposal:

• No benefit reduction for current beneficiaries
• No general fund financing
• Maintain the bipartisan nature of the program
• Improve the system’s progressivity
• Increase risk protection
• Universal participation

Blueprint Highlights

The plan adopts a balanced approach to achieving its goals, combining tax increases, targeted benefit adjustments (reductions for some beneficiaries and increases for others), and additional modifications.

Revenue Enhancements

The plan incorporates three significant changes to taxation:

• Increase the taxable maximum ceiling ($730 billion in budget savings, 2025-2035): In 2024, about 80 percent of wages were subject to Social Security taxes, which is 10 percentage points less than in 1983. The proposal calls for, starting in 2027, increasing the taxable maximum ceiling faster than specified in current law to reach a 90 percent target by 2039.
• Change rules for pass-through payroll tax ($553 billion): Currently, some self-employment investments are not subject to Social Security taxes, creating a loophole for certain owners of pass-through entities.
• Increase the payroll tax by 0.2 percentage points ($209 billion)

Benefit Reductions

• Increase retirement age for high earners ($1 billion): Currently, everyone born in 1960 and later reaches full retirement at age 67. The plan proposes increasing the retirement age by two months every year starting in 2037 through 2054 for all top quintile earners. Since the change wouldn’t take effect until after the projection period, the benefits are understated; savings would be an estimated $99 billion from 2036 to 2045.
• Increase the number of working years used when calculating Social Security retirement benefits ($19 billion): Brookings proposes raising the number of years of earnings in the calculation from 35 to 40 years, which would better align benefits with life expectancy.
• Tax all Social Security benefits of high earners ($241 billion): The plan calls for taxing all Social Security benefits of individuals with adjusted gross income of over $100,000 and couples above $125,000, setting their benefits apart from people with lower income profiles and are taxed on 50 percent of 85 percent of benefits, depending on income.
• End the dependent retiree spouse benefit ($2 billion)
• Eliminate child retiree benefits ($75 billion): The blueprint includes ending benefits for children of a parent who begins receiving their benefits in 2027. Brookings believes that the current policy incentivizes early retirement.

Benefit Improvements

• Increase survivor benefits (−$156 billion): The proposal would increase benefits for survivors to up to 75 percent of the combined benefits instead of the survivor needing to choose between their benefits or their deceased partners’. Doing so would be “a closer match to the estimated typical drop in household expenses once one member of a couple has died.”
• Create a disability benefit for older workers with disabling conditions that make them unable to do their jobs (−$212 billion): There is a gap in coverage for those who are at least 58 and not sufficiently healthy enough to work but do not qualify for the two other stringent social security disability programs, Social Security Disability Insurance and Supplemental Security Income. The proposal calls for creating an early retirement disability benefit for those workers who have fallen through the cracks.
• Restore and expand student benefits for children whose parents are disabled or dead (−$111 billion): The plan would broaden eligibility for Social Security payments to children and young adults whose parents are disabled or no longer alive.
• Provide a child benefit to grandparents or certain other relatives caring for children (−$62 billion): The proposal would shorten caretaker eligibility requirements from one year of custody to six months and expand coverage.
• Improve benefits for disabled adult children (amount is negligible)

Other

• Devote all proceeds from taxes on Social Security benefits to OASDI trust funds ($755 billion): The proposal calls for ending a policy of redirecting proceeds of some benefit taxes to the Medicare Hospital Insurance Trust Fund, which was struggling three decades ago but is now on better financial footing.
• Expand the labor force by changing policies on legal immigration ($117 billion): Social Security is facing a worker-to-beneficiary problem, so Brookings proposes increasing caps on various means of legal, employment-based immigration.
• Achieve universal coverage in Social Security ($5 billion): The proposal seeks to migrate all workers to Social Security, as opposed to the current system, where some public sector workers remain outside the federal retirement system.