The Ghost of Social Security
It is very unlikely that Congress will fully sunset Social Security, which is a core issue for older Americans who have significant voting power. A policy to end Social Security would have far too much political pushback to be viable, as Rick Perry’s loss in the 2012 presidential primaries showed.
Rather, lawmakers will have to work incrementally. There are three potential routes Congress might take. The first would be to raise the age for full benefits. This would mirror the Social Security Reform Act of 1983, the U.K. Pensions Act of 1995 and the current proposal in the French Senate.
The second would be to encourage funding alternative retirement plans. An existing program ripe for expansion is the FICA Alternative Plan, which requires employees to set aside funds instead of contributing to Social Security. Social Security’s financial burden could be eased by providing an opt-in alternative retirement account that reduces Social Security eligibility but provides an avenue for tax-advantaged savings.
The third route would be to means-test Social Security based on wealth or lifetime income. This could be done by prohibiting Americans who reported more than $15 million of lifetime income from claiming Social Security. This may become popular with progressive groups but is likely to fail.