The Potential Savings to Social Security from Means Testing

Publication Date: March 2011

Publisher: Center for Economic and Policy Research

Author(s): Dean Baker; Hye Jin Rho

Research Area: Economics; Government; Population and demographics

Keywords: Social Security; means testing

Type: Report

Coverage: United States

Abstract:

Many people in policy debates have argued that means testing, or reducing Social Security payments to affluent beneficiaries, can be an effective way to save money for the program and to reduce the federal budget deficit. This paper examines the feasibility of saving money through various types of means tests and suggests that is likely to be very limited unless the means test is applied to individuals who are very much middle class by any reasonable definition. The percentage of benefits that go to affluent seniors is too small to make very much difference to the program’s finances.