In a study released on July 1, the Congressional Budget Office examined options for putting Social Security on a sustainable financial basis for the long term. Those examined include both revenue-raising and benefit-reduction options. CBO director Doug Elmendorf summarized the study in a July 1 post.
In a June 30 commentary, Urban Institute economist Eugene Steuerle urged the Social Security Administration to publicize more widely the increase in benefits that workers get for delaying retirement past age 62 and even past the normal retirement age of 66. Benefits continue rise until age 69, but few workers are aware of this fact.
Also on June 30, the Federal Reserve Bank of Boston released a report on state pension plans in the Northeast. It finds that they encourage state employees to retire at too early an age and ought to be restructured to be age-neutral.
On June 25, political scientists Benjamin Page and Lawrence Jacobs published a study on public attitudes toward budget deficits and Social Security. Based on public opinion polls, they argue that Americans would prefer to increase Social Security than cut it, and if some action needs to be taken to shore up its finances it should be done by raising taxes rather than cutting benefits.
On June 3, the Employee Benefit Research Institute published data on the distribution of Social Security benefits by income class. Overall, Social Security made up 40 percent of income for those 65 or older in 2008.
In a June 2 commentary, Steuerle suggests that the impact of the recession on unemployment has been somewhat understated because many baby boomers have chosen early retirement and thus removed themselves from the labor force. However, both boomers and the economy as a whole will pay a heavy price down the road from the lost income and output they would have produced had they remained employed, he says.
In a May 26 commentary, former George W. Bush administration economist Keith Hennessy was highly critical of a provision in the tax extenders bill before Congress that would allow big corporations to underfund their defined-benefit pension plans.
A May Urban Institute study looked at the distributional effects of various Social Security reform proposals. Among those examined: a permanent reduction of Social Security COLA, raising the normal retirement age, raising the payroll tax rate and the taxable wage base.
The latest Income of the Aged Chartbook from the Social Security Administration, released in April, shows that income from assets represent a declining share of elderly incomes while income from wages has been rising. Shares of other income sources (Social Security, pensions and public assistance) have been flat. Raw data are available here.
An October 2009 Social Security Bulletin article noted that the percentage of workers covered by defined-benefit pension plans fell from 38 percent to 20 percent between 1980 and 2008. It expects this percentage to fall further in coming years as more workers are covered by defined contribution plans such as 401(k)s.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
July 5: Energy Subsidies
July 2: Weekly Roundup
July 1: Focus on Economics
June 30: Focus on International Economics