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GAO Releases Report on Social Security’s Reform Options
On July 31, 2024, the United States Government Accountability Office (GAO) released the third report in a series, Social Security Series Part 3: Options for Reform. The three-part report series focuses on Social Security and each report covers one of the following topics: 1) Social Security’s financial challenges; 2) criteria for evaluating options for reforming Social Security; and 3) types of proposed Social Security reforms.
The third report in the series discusses the options for reforming the Social Security program. The proposed options presented were either introduced in Congress, identified in various literature or suggested by Social Security experts. Significant financial challenges threaten the long-term ability of the Social Security Administration (SSA) to continue to pay the full benefits for retirees and other beneficiaries since 2010.
Frequently, policymakers include various options in comprehensive reform packages that could address Social Security’s financial challenges in addition to others that could track nonfinancial goals. The nonfinancial goals may include changes to help modernize the program’s benefits and revenue structure to reflect demographic, economic or societal changes. In a comprehensive reform package, proposed options may interact which may affect the financial and societal results.
The report categorizes the reform options into: 1) improving finances by reducing program costs; 2) improving finances by increasing program revenues; 3) options with mixed or uncertain financial effects; and 4) options that pursue nonfinancial goals.
If no action is taken, it is expected that the program’s reserve funds will be exhausted in less than 10 years. Therefore, the retirees may receive only about 79% of their scheduled benefits. The GAO urged that when timely actions are taken to address the financial challenges, the more gradually changes can be phased in so that workers would have more time to adjust and plan ahead for any changes needed for their retirement.
The report is available here.