Social Security Beneficiaries Face 19% Cut; New Revenue Can Restore Balance

Summary: The Social Security legislation of 1983 achieved the important goal of remedying a short-term financing crisis and keeping the program solvent. But for the long term, it scheduled far more in benefit cuts than in new revenues for the 21st century. Those benefit cuts are only beginning to be felt. People reaching age 65 in 2025 will get retirement benefits for the rest of their lives that are about 19 percent lower than they would have been without the 1983 reductions. Cutting benefits further, as some people propose, could undermine the adequacy of Social Security benefits going forward and jeopardize the basic economic security of older Americans. There are alternatives that merit consideration. Modest benefit improvements and revenue increases are affordable, have broad public support, and can close Social Security’s long-term financing shortfall without further benefit cuts.

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