	Background

Social Security reform is an issue of interest to policy makers that arises in various contexts, from improving retirement security to reducing federal budget deficits. In 2011, for example, Social Security program changes were discussed by the Joint Select Committee on Deficit Reduction established by the Budget Control Act of 2011 ( P.L. 112-25 ). The Joint Committee was tasked with recommending ways to reduce federal budget deficits by at least $1.5 trillion over the fiscal year period 2012 to 2021. Social Security program changes were among the measures considered by the Joint Committee; however, no agreement was reached on a legislative proposal by the statutory deadline. Social Security program changes could be considered in the future as part of broad deficit reduction legislation or as a stand-alone measure. Other policy makers support maintaining the current structure of the program (i.e., a defined benefit system funded on a pay-as-you-go basis), pointing to the system's projected long-range financial outlook to support their view that the system is not in immediate "crisis" and that only modest program changes may be needed to extend trust fund solvency and provide for a potential increase in benefits. Proponents of the fundamentally different approaches to reform (ranging from relatively minor changes to the current pay-as-you-go social insurance system to the creation of a "modernized" program based on personal savings and investments modeled after IRAs and 401(k)s) cite varying policy objectives that go beyond simply restoring long-term financial stability to the system. They cite objectives that focus on improving the adequacy and equity of benefits, as well as those that reflect different philosophical views about the role of the Social Security program and the federal government in providing retirement income. However, the system's projected long-range financial outlook provides a backdrop for much of the Social Security reform debate in terms of the timing and degree of recommended program changes. The trustees project that Social Security will operate with an annual cash flow deficit in each year of the 75-year projection period (2013-2087). When there are no surplus governmental receipts, the increased spending for Social Security from the general fund can only be paid for by the federal government raising taxes or other income, reducing other spending, and/or borrowing from the public (i.e., replacing bonds held by the trust funds with bonds held by the public). Social Security Trust Fund Solvency

The trustees project that the Social Security trust funds will be exhausted in 2033, at which point incoming receipts will cover an estimated 77% of scheduled annual benefits. Between 2015 and 2035, the number of people aged 65 and older is projected to increase by about 65%, whereas the number of workers whose taxes will finance future benefits (people aged 20-64) is projected to increase by about 6%. The projected long-range financial outlook for the Social Security system is reflected in public opinion polls that show less than 50% of respondents are confident in Social Security's ability to meet its long-term commitments. There is a growing public perception that Social Security may not be as good a value in the future. Such concerns, and a belief that the nation must increase national savings to meet the needs of an aging society, are among the factors behind reform efforts. They point out that the trust funds are projected to have a balance until 2033, there continues to be public support for the program, and there would be considerable risk in some of the reform ideas. They contend that relatively modest changes could restore long-range solvency to the system. Legislation Introduced in the 113th Congress

A number of Social Security reform bills have been introduced in the 113 th Congress; none have received congressional action.
Social Security reform is an issue of ongoing interest to policy makers. In recent years, Social Security program changes have been discussed in the context of negotiations on legislation to increase the federal debt limit and reduce federal budget deficits. For example, in August 2011, the Budget Control Act of 2011 (P.L. 112-25) established a Joint Select Committee on Deficit Reduction tasked with recommending ways to reduce the deficit by at least $1.5 trillion over the fiscal year period 2012 to 2021. Social Security program changes were among the measures discussed by the Joint Committee. The Joint Committee, however, did not reach agreement on a legislative proposal by the statutory deadline. Looking ahead, Social Security program changes could again be considered as part of any future negotiations on broad deficit reduction legislation or as stand-alone Social Security legislation.
The spectrum of ideas for reform ranges from relatively minor changes to the pay-as-you-go social insurance system enacted in the 1930s to a redesigned, "modernized" program based on personal savings and investments modeled after IRAs and 401(k)s. Proponents of the fundamentally different approaches to reform cite varying policy objectives that go beyond simply restoring long-term financial stability to the Social Security system. They cite objectives that focus on improving the adequacy and equity of benefits, as well as those that reflect different philosophical views about the role of the Social Security program and the federal government in providing retirement income. However, the system's projected long-range financial outlook provides a backdrop for much of the Social Security reform debate in terms of the timing and degree of recommended program changes.
On May 31, 2013, the Social Security Board of Trustees released its latest projections showing that the trust funds will be exhausted in 2033 and an estimated 77% of scheduled annual benefits will be payable with incoming receipts at that time (under the intermediate projections). The primary reason is demographics. Between 2015 and 2035, the number of people aged 65 and older is projected to increase by about 65%, while the number of workers supporting the system (people aged 20-64) is projected to increase by about 6%. In addition, the trustees project that the system will run a cash flow deficit each year of the 75-year projection period. When current Social Security tax revenues are insufficient to pay benefits and administrative costs, federal securities held by the trust funds are redeemed and Treasury makes up the difference with other receipts. When there are no surplus governmental receipts, policy makers have three options: raise taxes or other income, reduce other spending, and/or borrow from the public.
Public opinion polls show that less than 50% of respondents are confident that Social Security can meet its long-term commitments. There is also a public perception that Social Security may not be as good a value for future retirees. These concerns, and a belief that the nation must increase national savings, have led to proposals to redesign the system. At the same time, others suggest that the system's financial outlook is not a "crisis" in need of immediate action. Supporters of the current program structure point out that the trust funds are projected to have a positive balance until 2033 and that the program continues to have public support and could be affected adversely by the risk associated with some of the reform ideas. They contend that only modest changes are needed to restore long-range solvency to the Social Security system.
During the 113th Congress, a number of Social Security reform measures have been introduced; none have received congressional action.