As Treasury explained at our deep background meeting with center-left writers, the deficit commission established by the president should produce a package of Social Security reforms in November. What will the package include? Andrew Biggs, a AEI scholar who has worked closely with some members of the commission, said he expects three pillars of reform: a higher retirement age, more taxed wages, and reduced benefits for the wealthy.
On Sunday, the New York Times lassoed together some experts to brainstorm Social Security fixes on the occasion of its 75th birthday. Some call for higher revenues -- by raising the taxable income ceiling above $107,000 and liberalizing immigration laws to "steal" young workers from other countries -- while others called for spending cuts -- by raising the early retirement age from 62 and progressively indexing benefits so that the rich get smaller Social Security checks to supplement their IRAs.
The main thing to say about these ideas is that we can do almost all of them at once. We can raise the payroll ceiling by 2 percent every few years. We can raise the early retirement age, while expanding disability pay for seniors who are physically unable to continue arduous jobs into their 60s. We can progressively index rich seniors' benefits while preserving payouts to the lower 50 percent who rely on Social Security overwhelmingly as a main source of income. And so on.