So-Called "Price Indexing" Proposal Would Result In Deep Reductions Over Time In Social Security Benefits
Publication Date: December 2004
Author(s): Robert Greenstein
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Fiscal future; Financial projections; Senior citizen; Retirement
Increasing attention is being accorded to a proposal to make a major change in how Social Security benefits levels are set. Under a proposal that President Bush’s Social Security Commission put forward in 2001, Social Security benefits would shrink dramatically over time as a share of workers' pre-retirement wages, replacing a much smaller share of pre-retirement wages for workers who retire farther into the future than for workers who retire sooner. The gap between Social Security benefits and pre-retirement wages thus would widen over time.