Social Security: Trust Fund Status in the Early 1980s and Today and the 1980s Greenspan Commission

March 4, 2022 R47040

Social Security: Trust Fund Status in the Early
March 4, 2022
1980s and Today and the 1980s Greenspan
Barry F. Huston
Commission
Analyst in Social Policy

Under current law, the Social Security Board of Trustees is required to provide Congress with an
Dawn Nuschler
annual report on the current and projected financial status of the Social Security trust funds.
Specialist in Income
There are two separate trust funds: the Old-Age and Survivors Insurance (OASI) trust fund and
Security
the Disability Insurance (DI) trust fund. The separate OASI and DI trust funds are often

discussed on a combined basis as the OASDI trust funds (or the Social Security trust funds) to
allow for a more complete picture of the program’s overall financial outlook. Since the 2012

annual report, the trustees have consistently projected that the asset reserves held by the Social
Security trust funds would be depleted in the 2033-2035 time frame (under the intermediate assumptions). Should asset
reserves become depleted—as projected—Social Security would be unable to pay full scheduled benefits on time. Given this
potential scenario, avoiding the system’s projected funding shortfall is an issue of high congressional interest.
Congress last passed major Social Security legislation in 1983 (P.L. 98-21; Social Security Amendments of 1983). When the
1983 amendments were passed, Social Security was months or weeks away from being unable to pay full benefits. Although
the 1983 amendments addressed projected short- and long-range funding shortfalls, the trustees have projected a negative 75-
year actuarial balance for the Social Security trust funds in each annual report since 1984 (under the intermediate
assumptions). Thus, in each Congress, bills have been introduced that aim to eliminate or delay the system’s projected
funding shortfall, among other policy objectives.
Before the 1983 amendments, there were previous attempts to address the system’s projected funding shortfall. The system’s
weakening financial position was known to lawmakers throughout the 1970s. In response, Congress enacted a series of Social
Security financing legislation, but the program’s financial status continued to weaken. In the early 1980s, after an
Administration proposal favoring benefit reductions failed to gain support, President Ronald Reagan established the National
Commission on Social Security Reform—known as the Greenspan Commission after its chairman, Alan Greenspan—to
develop a plan to restore financial balance to the Social Security system and ensure that beneficiaries would continue to
receive full scheduled benefits on time.
The commission’s final report, delivered to President Ronald Reagan in January 1983, included both benefit-reduction and
revenue-raising measures and became the basis for the 1983 amendments. At the time, the commission’s recommendations
were estimated to eliminate about two-thirds of the system’s projected long-term funding shortfall. When passed, the 1983
amendments included additional measures that were estimated to eliminate the remaining one-third of the projected funding
shortfall.
While the situation faced by lawmakers in the 1970s and early 1980s is inherently different from that facing lawmakers
today, there are some similarities. For example, similar to the 2010s and 2020s, the 1970s and early 1980s were marked by
projected low fertility and an increasing ratio of beneficiaries to covered workers. An imbalance in the number of people
receiving benefits relative to the number of people paying into the system is an important factor, because Social Security is
financed primarily on a pay-as-you-go basis (i.e., current payroll tax revenues are used to pay benefits to current
beneficiaries). One of the key differences, however, is the magnitude of the system’s funding shortfall in the period leading
up to the 1983 amendments compared to that of today. Today, the system’s projected funding shortfall is much larger.
Another key difference is the immediacy of trust fund insolvency in 1983 as compared to today. Today, the trustees project
that trust fund insolvency is about a decade away (under the intermediate assumptions in the 2021 annual report).
If Congress decides to take action now, or in the years to come, the experiences of the past can inform the debate. A look at
the Greenspan Commission can shed light on one approach that was used in the past to reach consensus on a legislative
package that was designed to restore financial balance to the system. The same approach may or may not have a similar
outcome today. Looking ahead, the timing, degree, and nature of any future changes to the Social Security program will
reflect the policy objectives of lawmakers engaged in the debate at the time. In any case, the Social Security Board of
Trustees recommends that “lawmakers address the projected trust fund shortfalls in a timely way in order to phase in
necessary changes gradually and give workers and beneficiaries time to adjust to them.”
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Social Security: Background on the Trust Funds and the 1980s Greenspan Commission

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Social Security: Background on the Trust Funds and the 1980s Greenspan Commission

Introduction
The Social Security Board of Trustees reports to Congress annually on the current and projected
financial status of the Social Security trust funds. There are two separate trust funds: the Old-Age
and Survivors Insurance (OASI) trust fund and the Disability Insurance (DI) trust fund. The
separate OASI and DI trust funds are often discussed on a combined basis as the OASDI trust
funds (or the Social Security trust funds) to allow for a more complete picture of the program’s
overall financial outlook. In the 2021 annual report, the trustees project that the asset reserves
held by the trust funds will be depleted by 2034, at which point Social Security will no longer be
able to pay benefits scheduled under current law in full and on time. On average, over the next 75
years, the trust funds are projected to have a negative actuarial balance (an actuarial deficit) equal
to 3.54% of taxable payroll. That is, the trust funds are projected to have a funding shortfall equal
to 3.54% of taxable payroll on average over the next 75 years.1 Financial imbalances for the
Social Security trust funds are not a new issue. The trustees have projected a negative 75-year
actuarial balance (a 75-year actuarial deficit) for the trust funds in each of their annual reports
since 1984 (under the intermediate assumptions).
Each Congress, lawmakers introduce legislation that would make changes to the Social Security
program to address the system’s projected funding shortfalls and other policy objectives. While
Social Security “reform” has long been the subject of policy debate, the last legislative action on
major Social Security legislation was in 1983. Congress passed the Social Security Amendments
of 1983 (P.L. 98-21) to address the system’s short-range and long-range funding shortfalls. When
Congress passed the 1983 legislation, the program was within months or weeks of being unable to
pay full scheduled benefits on time.
The 1983 amendments followed previous efforts to address the system’s funding shortfalls. In the
late 1970s, Congress enacted major Social Security financing legislation, but financing issues
persisted. In the early 1980s, President Ronald Reagan proposed a Social Security reform
package that relied heavily on benefit reductions. After the proposal failed to gain support,
President Reagan established the National Commission on Social Security Reform to develop a
plan to restore financial balance to the Social Security system and ensure that beneficiaries would
continue to receive their full benefits. The commission became known as the Greenspan
Commission after its chairman, Alan Greenspan.
In January 1983, the Greenspan Commission delivered its final report to President Reagan,
including policy recommendations that were estimated to close about two-thirds of the system’s
projected long-range funding shortfall. The commission’s recommendations formed the basis for
the Social Security Amendments of 1983. The 1983 amendments included additional provisions
designed to close the remaining one-third of the system’s projected long-range funding shortfall.
In March 1983, Congress passed the Social Security Amendments of 1983, and the legislation
was signed into law (P.L. 98-21) by President Reagan in April 1983.
This report looks at the financial status of the Social Security trust funds today and in the period
leading up to the passage of the Social Security Amendments of 1983. Such a comparison can
provide context for the current policy debate. The report then looks at the circumstances that led
to the creation of the Greenspan Commission and provides background on the commission’s
membership, activities, and policy recommendations. It provides a summary of congressional

1 The 2021 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds, August 31, 2021, https://www.ssa.gov/OACT/TR/2021/tr2021.pdf (hereinafter cited
as 2021 Annual Report of the Social Security Board of Trustees). Projections are based on the trustees’ intermediate
assumptions.
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action leading up to the passage of the 1983 amendments and an assessment of the effectiveness
of the Greenspan Commission. An understanding of the Greenspan Commission’s role in the
passage of the 1983 amendments can shed light on one approach that was used in the past to
reach consensus on a broad legislative package designed to address the system’s financial
imbalance. Finally, the report provides examples of subsequent presidential commissions that
have made Social Security policy recommendations.
Status of the Trust Funds Today
The financial status of the Social Security trust funds are primarily evaluated by two summary
measures: the trust fund ratio and the actuarial balance. These measures provide Congress with
the information necessary to evaluate the status of the program in the short and long term. They
also provide lawmakers a means to assess the financial impact of proposals to change current law.
Trust Fund Ratio
In the short run, or the immediate 10-year period, the trust fund ratio is used as a measure of
financial adequacy and the program’s ability to cover contingencies in the short term.2 The ratio
is presented as the value of the trust funds’ asset reserves at the beginning of a year as a
percentage of the expected cost for that year.3 For instance, under the trustees’ intermediate
assumptions, the trust fund ratio in 2021 was projected to be 253%.4 That is, at the beginning of
2021, the current value of the combined trust funds was projected to be 253% of the expected cost
of the program for that year. Said differently, assets held by the trust funds at the beginning of
2021 were projected to be 2.53 times greater than the cost of the program in 2021. According to
the trustees, a trust fund ratio above 100% throughout the short-range period (10 years) indicates
a financially healthy program, whereas a ratio below 100% signals the program is in a financially
inadequate position.5
Figure 1 shows the historical trust fund ratio for 1975-2020 and the projected trust fund ratio for
2021-2034. The trust fund ratio peaked at 358% in 2008. The trustees project that the trust fund
ratio will decline to 104% in 2029 and fall below the 100% threshold in 2030. The trust fund ratio
is projected to continue to decline until trust fund reserves are depleted in 2034.6

2 In practice, the Social Security Board of Trustees designates the short term, or near term, as the immediate 10-year
period. Recognizing the need to provide a longer-term outlook for Congress, the trustees also provide projections over
a 75-year period. For a discussion on why these two time periods are used for short- and long-term projections, see
CRS In Focus IF11851, Social Security Long-Range Projections: Why 75 Years?, by Dawn Nuschler.
3 2021 Annual Report of the Social Security Board of Trustees, see p. 11.
4 2021 Annual Report of the Social Security Board of Trustees, see Table IV.A3, p. 50. In the 2021 annual report, the
trustees present three alternative sets of assumptions (intermediate, low-cost, and high-cost) for demographic,
economic, and program-specific factors. The intermediate set of assumptions represents the trustees’ best estimate of
likely future conditions.
5 2021 Annual Report of the Social Security Board of Trustees, see p. 11.
6 2021 Annual Report of the Social Security Board of Trustees, see Table IV.B4, p. 69. See also the single-year
supplemental Table IV.B4 at https://www.ssa.gov/oact/TR/2021/lr4b4.html.
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Figure 1. Social Security Trust Fund Ratio, 1975-2040
Trust Fund Asset Reserves as a Percentage of Expected Cost

Source: The 2021 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and
Federal Disability Insurance Trust Funds, August 31, 2021, https://www.ssa.gov/OACT/TR/2021/tr2021.pdf. See
Table IV.B4, p. 69, and the single-year supplemental Table IV.B4 at https://www.ssa.gov/OACT/TR/2021/
lr4b4.html.
Actuarial Balance
The summary measure for the long-run (75-year) financial status of the program is the actuarial
balance. This measure is the difference between the program’s summarized income rate and
summarized cost rate. The summarized income rate is the sum of the present value of non-interest
income (Social Security payroll tax revenues and federal income tax revenues from the taxation
of Social Security benefits) for the 75-year period and the trust fund asset reserves, expressed as a
percentage of taxable payroll.7 The summarized cost rate is the sum of the present value of the
cost for the 75-year period and the cost of a trust fund ratio of 100%, expressed as a percentage of
taxable payroll. Thus, the actuarial balance—also expressed as a percentage of taxable payroll—
is the difference between a 75-year period’s summarized income rate and a 75-year period’s
summarized cost rate.
If the actuarial balance for a period is positive, it is considered an actuarial surplus. An actuarial
balance that is negative for a period is referred to as an actuarial deficit. Generally speaking, the
trust funds are deemed to be financially adequate for any period if the actuarial balance is zero or
positive, as this would indicate that the period’s ending reserves are at least equal to annual cost.8
A positive actuarial balance is commonly misunderstood to mean the program’s finances would

7 2021 Annual Report of the Social Security Board of Trustees, see p. 71. Non-interest income for the program is
comprised of payroll taxes, tax revenues from the taxation of Social Security benefits, and reimbursements from the
General Fund of the Treasury. Non-interest income excludes the interest earned on asset reserves held by the trust
funds.
8 2021 Annual Report of the Social Security Board of Trustees, see pp. 71-72.
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be in surplus each year over the period (e.g., 75 years). Although that may be the case, there could
be some surplus years and some deficit years during the period.
For the 75-year projection period starting in 2021, the actuarial balance is -3.54% of taxable
payroll (i.e., the actuarial deficit is 3.54% of taxable payroll).9 This summary measure can be
interpreted in many ways. Most often, it is interpreted as the approximate percentage point
increase in the payroll tax rate that would be necessary for the trust funds to remain fully solvent
throughout the 75-year projection period.10 That is, for the Social Security trust funds to remain
solvent over the next 75 years, the trustees point out for illustrative purposes that the payroll tax
rate would have to increase from 12.40% to 15.76% on an immediate and permanent basis.11
Figure 2 shows the Social Security long-run (75-year) actuarial balance projected by the trustees
in each of their annual reports from 1982 to 2021 (based on the intermediate assumptions).12 The
program has demonstrated a negative actuarial balance (or actuarial deficit) each year since 1984.
Thus, according to the trustees’ definition, the program’s actuarial balance fails the test of long-
run financial adequacy.

9 2021 Annual Report of the Social Security Board of Trustees, see p. 5.
10 At the start of 2021, the actual payroll tax rate increase that would have been necessary to ensure the trust funds
remain fully solvent throughout the 75-year projection period was 3.36 percentage points. This is less than the 3.54%
actuarial deficit for two reasons: (1) the actuarial deficit incorporates an ending trust fund asset reserve equal to one
year’s cost at the end of the projection period (i.e., 75 years) and (2) the actuarial deficit does not reflect behavioral
responses to the payroll tax rate increase. See 2021 Annual Report of the Social Security Board of Trustees, p. 5.
11 As explained in the previous footnote, the payroll tax rate would have to increase by a projected 3.36 percentage
points (12.40 + 3.36 = 15.76).
12 Starting with the 1991 annual report, the trustees have presented three sets of alternative assumptions. Alternative I is
a low-cost (most optimistic) set of assumptions, while Alternative III is a high-cost (most pessimistic) set of
assumptions. These assumptions are intended to put the trust funds into the most advantageous and least advantageous
positions, respectively. Alternative II, or the intermediate set of assumptions, is the set of assumptions that represents
the trustees’ best guess for the future economic, demographic, and programmatic experience. From 1981 through 1990,
however, the trustees presented two sets of intermediate assumptions: II-A and II-B. The two scenarios also represented
the trustees’ best guess for future experience but with alternative II-B using more robust economic assumptions.
The1991 annual report states: “In previous reports, when there were two intermediate sets of assumptions, [tests of the
financial adequacy of the trust funds] were based on the alternative II-B assumptions. Comparisons of intermediate
estimates in the 1991 report with corresponding estimates in the 1990 report are also based on the alternative II-B
estimates in the 1990 report.” See 1991 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors
Insurance and Federal Disability Insurance Trust Funds, May 22, 1991, https://www.ssa.gov/OACT/TR/historical/
1991TR.pdf, p. 1.
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Figure 2. Social Security 75-Year Actuarial Balance, 1982-2021
as a Percent of Taxable Payroll

Source: Office of the Chief Actuary, Disaggregation of the Long-Range Actuarial Balance for OASDI Program Since
1983, April 2020, Table 1, https://www.ssa.gov/OACT/NOTES/ran8/an2020-8.pdf. See also The 2021 Annual
Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, August 31, 2021, Table IV.B5, p. 74, https://www.ssa.gov/OACT/TR/2021/tr2021.pdf.
Notes: For 1982, the graph includes the actuarial balance that was presented in the 1982 Annual Report of the
Social Security Board of Trustees to give a frame of reference for the magnitude of the change achieved by the
Social Security Amendments of 1983.
A summary measure taken out of context could lead to misconceptions about the true financial
status of the Social Security program.13 Specifically, the trustees warn against focusing solely on
75-year summary measures as they may lead to policies that pass short- and long-run financial
adequacy tests but do not result in sustainable solvency. Sustainable solvency is achieved when
the projected trust fund ratio is positive throughout the 75-year period and is either stable or
increasing at the end of the period.14 For this reason, the trust fund ratio is used to evaluate the
financial status of the program in both the short run and the long run.
Financial Status
The system’s projected actuarial deficit equal to 3.54% of taxable payroll (i.e., projected negative
actuarial balance equal to 3.54% of taxable payroll) is a summary measure representing the
program’s long-run financial adequacy, on average. It is the difference between two other
summarized measures: the summarized income rate and the summarized cost rate. This measure
alone does not provide context as to the financial status of the program on an annual basis.
Analyzing non-interest income and cost on an annual, or year-to-year, basis can provide the
necessary context for understanding the financial status of the program throughout the projection
period, not just on average over the entire period. Evaluating the system’s non-interest income

13 2021 Annual Report of the Social Security Board of Trustees, see p. 76.
14 2021 Annual Report of the Social Security Board of Trustees, see p. 25.
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and cost on an annual basis (its annual cash-flows) can identify funding shortfalls that are not
observable with summary measures.
Since 2010, Social Security has had annual cash-flow deficits (i.e., program costs have exceeded
non-interest income). In the 2021 annual report, the trustees project that, under the intermediate
assumptions, annual cash-flow deficits will continue throughout the 75-year projection period.15
The program can continue to pay full benefits on time while operating with cash-flow deficits
during periods of positive trust fund balances, because asset reserves held by the trust funds can
be redeemed to augment current tax revenues. However, this process cannot last indefinitely.
As discussed, the trust fund ratio was projected to be 253% in 2021 under the trustees’
intermediate assumptions in the 2021 annual report. The
trust fund ratio is projected to decline each year thereafter
What Does Trust Fund
until trust fund reserves become depleted early in 2034.16
Insolvency Mean?
The prospect of trust fund insolvency (i.e., depletion of
Currently, the asset reserves held by
trust fund reserves) differs from bankruptcy. Although the
the Social Security trust funds
supplement current tax revenues,
program would not be able to cover 100% of scheduled
allowing the system to pay 100% of
benefits on time with incoming tax revenues, the program
scheduled benefits on time. If trust fund
would not be “financially broke” and unable to pay any
reserves become depleted, as
benefits.17 Rather, the trustees project that incoming tax
projected, the trust funds would be
revenues would be sufficient to pay 78% of scheduled
considered insolvent. At that point, the
program would continue to operate
benefits in 2034 and 74% of scheduled benefits by the end
with incoming tax revenues only. The
of the 75-year projection period (2095).18
trustees project that, after the point of
trust fund insolvency, incoming tax
revenues would be sufficient to pay in
Status of the Trust Funds in the the range of 75% of benefits scheduled
under current law for the remainder of
Early 1980s
the 75-year period. (Projections are
based on the intermediate assumptions
Beginning in 1973, the trust funds had run cash-flow
in the trustees’ 2021 annual report.)
deficits. The program’s costs exceeded its non-interest
income. That is, the financial situation was known to be deteriorating. In 1977, Congress had
enacted major financing legislation to address funding shortfalls (Social Security Amendments of
1977, P.L. 95-216). An article published in 1978 described the financial situation leading up to the
1977 amendments as follows: “Beginning in 1975, annual outgo from the OASDI trust funds
exceeded annual income [non-interest income and interest income combined] and the deficits
were expected to grow in the future. The disability fund was expected to be depleted by early
1979 and the OASI fund in the early 1980’s.”19 Despite the 1977 amendments, the depletion of
trust fund reserves was an imminent threat in the early 1980s.

15 2021 Annual Report of the Social Security Board of Trustees, p. 13. The trustees also project that program costs will
exceed total income (income including interest) beginning in 2021. After the 2021 annual report was published, data
released by the Social Security Administration’s Office of the Chief Actuary showed that program costs exceeded both
non-interest income and total income in calendar year 2021 (https://www.ssa.gov/OACT/ProgData/allOps.html).
16 2021 Annual Report of the Social Security Board of Trustees, p. 68. See also the single-year supplemental Table
IV.B4 at https://www.ssa.gov/oact/TR/2021/lr4b4.html.
17 For more information, see CRS Report RL33514, Social Security: What Would Happen If the Trust Funds Ran Out?,
by Barry F. Huston.
18 2021 Annual Report of the Social Security Board of Trustees, see Figure II.D2, p. 14.
19 John Snee and Mary Ross, “Social Security Amendments of 1977: Legislative History and Summary of Provisions,”
Social Security Bulletin, March 1978, p. 3, https://www.ssa.gov/policy/docs/ssb/v41n3/v41n3p3.pdf.
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In the early 1980s, the trust funds were close to exhaustion (i.e., the asset reserves held by the
trust funds were nearly depleted). Under the program’s financing structure at the time, the trustees
cautioned that the system would be unable to pay full scheduled benefits on time within a
relatively short period. The 1982 annual report, which was released in April of that year, stated
that in the absence of legislative action, the OASI trust fund would soon be insolvent:
Without corrective legislation in the very near future, the Old-Age and Survivors Insurance
Trust Fund will be unable to make benefit payments on time beginning no later than July
1983. Under present law, and on the basis of any reasonable set of economic assumptions,
the expenditures of the OASI program will continue to exceed income from payroll taxes
and other sources through at least 1986. To date, benefit payments have been made on a
timely basis by drawing down the assets of the OASI Trust Fund to cover the shortfall.
This, of course, is the fund’s purpose: to act as a contingency reserve during temporary
periods when outgo exceeds income. At this time, however, the assets of the OASI Trust
Fund have been reduced to such a low level that they will not be able to continue making
up the difference between outgo and income much longer. If assets are allowed to decline
to the point where their amount at the end of a particular month is less than the benefit
payments falling due on the third of the following month, inability to pay some benefits on
time for that month would result.20
Anticipating the need for legislative action to make benefit payments, but without consensus on
specific legislation, Congress passed the Social Security Amendments of 1981 (P.L. 97-123).
Among other things, the 1981 amendments allowed the OASI trust fund to borrow from the DI
trust fund and the Medicare Hospital Insurance (HI) trust fund, both of which were in a relatively
better financial position. The OASI trust fund was required to repay the borrowed amounts with
interest and could not borrow more than what was required to pay full benefits through June 30,
1983.21 If this interfund borrowing had not taken place, the trustees estimated the program would
have been unable to pay some benefits on time beginning in 1982.22
Trust Fund Status: 1983 Versus Today
At the start of 1983, the OASI trust fund was months away from the point of exhaustion. At the
start of 2022, the OASI trust fund is about 11 years away from the projected date of exhaustion
(under the intermediate assumptions in the trustees’ 2021 annual report). That is, current tax
revenues supplemented by trust fund reserves are projected to allow the system to pay benefits
scheduled under current law in full and on time for many years. Given this projection, it could be
argued that the status of the trust funds in the early 2020s is more akin to the status of the trust
funds in the early 1970s (as compared to the early 1980s). That is, while congressional action is

20 The 1982 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds, April 1, 1982, p. 2, https://www.ssa.gov/OACT/TR/historical/1982TR.pdf
(hereinafter the 1982 Annual Report of the Social Security Board of Trustees).
21 The 1981 amendments authorized the OASI, DI, and HI trust funds to borrow from one another through December
31, 1982. The amount of each transfer was limited to the amount needed to guarantee the payment of benefits for a six-
month period. Interfund loans were required to be repaid with interest. In practice, based on the expiration date
(December 31, 1982), the temporary interfund borrowing authority could be used only to transfer funds from the DI
and HI trust funds to the OASI trust fund in amounts needed to guarantee the payment of benefits through June 30,
1983. See Bruce D. Schobel, “Interfund Borrowing Under the Social Security Act,” Social Security Bulletin, vol. 46,
no. 9 (September 1983), https://www.ssa.gov/policy/docs/ssb/v46n9/. Under current law, the OASI and DI trust funds
are legally distinct and do not have the authority to borrow from each other (see 42 U.S.C. §401). As in the 1980s, any
interfund borrowing would have to be authorized by Congress.
22 The 1982 Annual Report of the Social Security Board of Trustees, p. 2.
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needed to avoid a projected funding shortfall, the projected date of trust fund exhaustion provides
a somewhat longer time frame for congressional action compared to the early 1980s.
Figure 3 shows the number of years until projected trust fund exhaustion under the intermediate
assumptions in each annual report from 1983 through 2021. The trustees’ projected date of
insolvency for the combined OASDI trust funds has consistently been in the 2033-2035 time
frame since the 2012 annual report. The figure also shows that, based on the trustees’ best guess
for the program’s future experience, there is time to avoid the projected funding shortfall, similar
to the early 1970s. If the future were to unfold in a manner similar to the intermediate projections,
1983 could serve as a corollary to the situation projected to occur in 2032 or 2033 (depending on
the exact date of trust fund exhaustion in calendar year 2033).
Figure 3. Projected Number of Years Until Social Security Trust Fund Exhaustion,
1983-2021
With Projected Date of Trust Fund Exhaustion (Under Intermediate Assumptions)

Source: CRS, based on information from the Social Security Board of Trustees annual reports from 1983 to
2021.
Notes: The 1983 and 1984 annual reports projected the trust funds to remain solvent throughout the 75-year
projection period. The chart uses information from the trustees’ intermediate assumptions (alternative II). From
1983 to 1990, two intermediate forecasts were prepared (II-A and II-B). The intermediate II-B forecast
corresponds more closely to the intermediate forecast in subsequent years.
One common characteristic between the program’s financial status in the mid-1970s and the early
2020s is persistent annual deficits. As noted above, the program began running annual deficits
(total costs exceeded total income) in 1975, and such deficits were expected to continue and
grow. Many factors contributed to this, but projected low fertility and an ultimate higher ratio of
beneficiaries to covered workers were key factors.23 The ratio of beneficiaries to covered workers
is important because Social Security is financed primarily on a pay-as-you-go basis. Payroll taxes

23 Ibid. The cash-flow deficits, induced to some degree by this demographic imbalance, were partially addressed in the
1983 amendments by expanding coverage under the Social Security program. For example, the 1983 amendments
made Social Security coverage mandatory for federal employees hired January 1, 1984, or later. By covering more
workers, the imbalance in the ratio of beneficiaries to covered workers was alleviated.
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paid by current workers (and their employers) finance benefit payments for current beneficiaries.
In the 2020s, projected low fertility and a large number of beneficiaries relative to covered
workers (i.e., those paying into the system) remain key contributing factors in the program’s
projected funding shortfall.24
Although the financial status of the trust funds in the early 2020s shows some similarities to the
financial status in the mid- to late 1970s and early 1980s, there are important differences. One key
difference is the magnitude of the cash shortfall in the OASI trust fund shortly before the 1983
amendments compared to that projected for the OASI trust fund in 2032, the year before
projected trust fund depletion (under the trustees’ intermediate assumptions in the 2021 annual
report).25 In late 1982, the OASI trust fund was able to borrow $17.5 billion (in current dollars)
from the DI and HI trust funds, the amount needed to make full benefit payments through June
1983.26 The OASI trust fund was projected to be depleted in late 1982; the interfund loans to the
OASI trust fund ensured that all benefits were payable until the enactment of the 1983
amendments in April of 1983.
By comparison, in 2021, the cash shortfall for the combined OASDI trust funds was $126.4
billion (in current dollars), and it is projected to reach $449.2 billion (in current dollars) in 2033,
the year before projected depletion of the OASDI trust funds.27 The OASI trust fund is projected
to be depleted sometime in 2033, and the hypothetical combined OASDI trust funds are projected
to be depleted sometime in 2034, just one year later.28 If Congress were to authorize interfund
borrowing between the OASI and DI trust funds similar to what was done in the early 1980s, both
trust funds would become depleted. That is, the DI trust fund is not projected to have sufficient
assets to offset the projected deficit in the OASI trust fund. Although the DI trust fund is in a
relatively better financial position, its projected depletion date (2057) is very sensitive to changes
in cash flows. In 1982, when temporary interfund borrowing was authorized, the balance in the
DI trust fund was projected to increase every year throughout the 75-year projection period.29 In
addition, interfund borrowing from the Medicare HI trust fund would not be an option today as it
was in 1982. Under current law, the HI trust fund is projected to be depleted in 2026, earlier than

24 For more information, see CRS Report R45990, Social Security: Demographic Trends and the Funding Shortfall, by
Barry F. Huston.
25 Comparisons of the 75-year actuarial deficit for the trust funds projected in the early 1980s and today can be
misleading given changes in methodology and assumptions over time and other factors. However, a general
comparison of cash shortfalls (cash-flow deficits) at specific points in time can be informative.
26 Bruce D. Schobel, “Interfund Borrowing Under the Social Security Act,” Social Security Bulletin, vol. 46, no. 9
(September 1983), https://www.ssa.gov/policy/docs/ssb/v46n9/. See Table 1 (Interfund loans to the OASI Trust Fund).
27 For trust fund data for 2021, see Social Security Administration, “Trust Fund Data,” https://www.ssa.gov/OACT/
ProgData/funds.html. For trust fund data projected for 2033, see the 2021 Annual Report of the Social Security Board
of Trustees, p. 230. See also the supplemental single-year table at Social Security Administration, “Operations of the
Combined OASI and DI Trust Funds, in Current Dollars,” https://www.ssa.gov/OACT/TR/2021/lr6g8.html. The
projection for 2033 is based on the trustees’ intermediate assumptions in the 2021 annual report.
28 The DI trust fund is projected to be depleted in 2057, later than the OASI trust fund or the hypothetical combined
OASDI trust funds (under the trustees’ intermediate assumptions in the 2021 annual report). The DI trust fund
represents a relatively small share of the total asset reserves held by the combined OASDI trust funds. At the end of
calendar year 2021, the combined OASDI trust funds held $2.852 trillion in asset reserves. Of that total, the OASI trust
fund held $2.753 trillion in asset reserves, and the DI trust fund held $99 billion in asset reserves. See Social Security
Administration, Office of the Chief Actuary, “Social Security Trust Fund Data,” https://www.ssa.gov/OACT/ProgData/
funds.html.
29 The 2021 Annual Report of the Social Security Board of Trustees, p. 4, and the 1982 Annual Report of the Social
Security Board of Trustees, p. 3. For more information on changes in year-to-year projected depletion dates, see Table
B-1 in CRS Report RL33514, Social Security: What Would Happen If the Trust Funds Ran Out?, by Barry F. Huston.
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the OASI trust fund (2033), the DI trust fund (2057), and the combined OASDI trust funds
(2034).30
When considering the magnitude of the system’s projected funding shortfall under current law on
average over the next 75 years and the time frame for congressional action, it can be informative
to consider hypothetical illustrations provided by the trustees. For the combined OASDI trust
funds to remain solvent throughout the 75-year projection period, the trustees project that an
immediate and permanent payroll tax rate increase from 12.40% to 15.76% would be needed.
Alternatively, an immediate and permanent benefit reduction of about 21% for all current and
future beneficiaries would be needed (or about a 25% benefit reduction for newly eligible
beneficiaries only). By comparison, if implementation of these hypothetical program changes is
delayed until 2034, the trustees project that (1) a permanent payroll tax rate increase from 12.40%
to 16.60% would be needed, or (2) a permanent benefit reduction of 26% in all benefits would be
needed to maintain 75-year trust fund solvency. The trustees point out, “If substantial actions are
deferred for several years, the changes necessary to maintain Social Security solvency would be
concentrated on fewer years and fewer generations.”31
These hypothetical illustrations show the degree to which the Social Security payroll tax rate
would have to be increased or scheduled Social Security benefits would have to be reduced to
maintain trust fund solvency on average over the 75-year projection period. That was the goal of
lawmakers in 1983. The 1983 amendments included a combination of revenue increases and
benefit reductions that were projected to restore trust fund solvency on average over the 75-year
period. For some lawmakers, the goals may be different today. Social Security legislation
introduced in more recent years reflects a range of approaches with respect to the timing, degree,
and nature of proposed program changes. In some cases, for example, policy objectives such as
benefit increases, eligibility expansions, or changes to certain provisions of current law that were
established or modified as part of the 1983 amendments (i.e., provisions affecting individuals
who have pensions from work not covered by Social Security) feature more prominently than
restoration of 75-year trust fund solvency. These and other factors will play a role in the decision
of lawmakers regarding when and how to address Social Security’s projected funding shortfall.
1981-1983 Greenspan Commission
When considering current prospects for congressional action on Social Security legislation,
people often look to the circumstances and events that led up to the passage of the Social Security
Amendments of 1983 (P.L. 98-21), which was the last time Congress made major changes to the
program. It can be informative to understand the system’s financial status at the time, as well as
the role of the 1981-1983 National Commission on Social Security Reform in the development of
the 1983 amendments. The commission established by President Ronald Reagan by executive
order is commonly referred to as the Greenspan Commission after its chairman, Alan Greenspan.
An understanding of the Greenspan Commission’s role in the early 1980s can shed light on one
approach that was used in the past to reach consensus on a broad legislative package designed to
address the system’s financial imbalance.

30 The 2021 Medicare trustees report projects that, under intermediate assumptions, the HI trust fund will be depleted in
2026, the same year as projected in the annual reports for the previous three years. For more information see, CRS
Report RS20946, Medicare: Insolvency Projections, by Patricia A. Davis.
31 The 2021 Annual Report of the Social Security Board of Trustees, pp. 5-6. Projections are based on the trustees’
intermediate assumptions.
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This section of the report provides information on the circumstances that led to the creation of the
Greenspan Commission, as well as the commission’s membership, activities, and policy
recommendations. It provides information on congressional action leading up to the passage of
the 1983 amendments and a brief assessment of the commission’s effectiveness. Finally, it
provides examples of subsequent presidential commissions that have made Social Security policy
recommendations.32
Circumstances in the Early 1980s
Despite major financing legislation enacted by Congress in 1977,33 the Social Security system
was facing imminent insolvency in the early 1980s (i.e., depletion of trust fund reserves). The
program had a short-term financing problem that was largely due to high inflation and lower-
than-expected wages, as well as a projected long-term financing deficit. As the system’s financial
outlook worsened, pressure mounted for lawmakers to reach agreement on a Social Security
legislative package.
In the fall of 1980, Congress had reallocated Social Security tax revenues from the DI trust fund,
which was relatively financially sound at the time, to the OASI trust fund during 1980 and
1981.34 The purpose was to maintain adequate reserves in both funds at least through the end of
calendar year 1981 and allow Congress more time to consider options to improve the system’s
finances.35
In the summer of 1981, the Reagan Administration had proposed a Social Security reform
package that relied heavily on benefit reductions and was generally received negatively by the
public. In addition, the operations of the Social Security trust funds were counted as part of the
unified federal budget at the time (i.e., Social Security’s income and expenditures were included
in federal budget totals), so Social Security reform was seen as part of a larger effort to reduce
federal budget deficits while downsizing the federal government across the board.
In December 1981, President Reagan established the Greenspan Commission to review options
and come up with a plan to restore financial balance to the Social Security system and ensure that
beneficiaries would continue to receive their full benefits. By April 1982, while the commission’s
work was underway, projections showed that Social Security would no longer be able to pay full
benefits on a timely basis starting in mid-1983.36

32 This section is based on CRS Congressional Distribution Memorandum, The 1981-1983 Greenspan Commission and
Its Role in the Passage of the Social Security Amendments of 1983, by Laura Haltzel and Dawn Nuschler, February 8,
2019; and information prepared by former CRS analyst Alison M. Shelton.
33 Social Security Amendments of 1977 (P.L. 95-216).
34 Reallocation of Social Security Taxes Between OASI and DI Trust Funds (P.L. 96-403).
35 John A. Svahn and Mary Ross, “Social Security Amendments of 1983: Legislative History and Summary of
Provisions,” Social Security Bulletin, vol. 46, no. 7 (July 1983), p. 5, https://www.ssa.gov/policy/docs/ssb/v46n7/
v46n7p3.pdf (hereinafter cited as Svahn and Ross).
36 In its annual report published in April 1982, the Social Security Board of Trustees projected that the OASI trust fund
would become insolvent by July 1983 if legislative changes were not made. See 1982 Annual Report, Federal Old-Age
and Survivors Insurance and Disability Insurance Trust Funds, April 1, 1982.
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Creation of the Commission
In an address to the nation on September 24, 1981, President Reagan announced his intent to
create a blue-ribbon commission to evaluate Social Security reform options.37 The President
stated:
To remove Social Security once and for all from politics, I am also asking Speaker Tip
O’Neill of the House of Representatives and Majority Leader in the Senate Howard Baker
to each appoint five members, and I will appoint five, to a task force which will review all
the options and come up with a plan that assures the fiscal integrity of Social Security and
that Social Security recipients will continue to receive their full benefits.
President Reagan officially created the National Commission on Social Security Reform by
Executive Order No. 12335 on December 16, 1981. The executive order outlined the
commission’s assignments as follows:
Sec. 2. Functions. (a) The Commission shall review relevant analyses of the current and
long-term financial condition of the Social Security trust funds; identify problems that may
threaten the long-term solvency of such funds; analyze potential solutions to such problems
that will both assure the financial integrity of the Social Security System and the provision
of appropriate benefits; and provide appropriate recommendations to the Secretary of
Health and Human Services, the President, and the Congress.
(b) The Commission shall make its report to the President by December 31, 1982.38
Commission Members
The commission had 15 members: Five were selected by President Reagan, five were selected by
Senate Majority Leader Howard Baker (in consultation with the minority leader), and five were
selected by House Speaker Tip O’Neill (in consultation with the minority leader). Each was
restricted from selecting more than three members from his own political party. President Reagan
designated the chairman, Alan Greenspan. At the time, Greenspan was the head of Townsend-
Greenspan and Co., and he was concurrently serving as a member of the President’s Economic
Policy Advisory Board. Previously, Greenspan had chaired President Gerald Ford’s Council of
Economic Advisors. Seven of the 15 commission members were sitting Members of the 97th
Congress. The commission included eight Republicans and seven Democrats.
The seven Members of Congress who served on the commission are (in alphabetical order):
1. Representative Bill Archer (R-TX), ranking minority member of the Social
Security Subcommittee of the House Committee on Ways and Means;
2. Senator William Armstrong (R-CO), chairman of the Social Security
Subcommittee of the Senate Committee on Finance;
3. Representative Barber Conable (R-NY), ranking minority member of the House
Committee on Ways and Means;
4. Senator Bob Dole (R-KS), chairman of the Senate Committee on Finance;
5. Senator John Heinz (R-PA), chairman of the Senate Special Committee on
Aging;

37 Svahn and Ross, p. 6.
38 Executive Order 12335, “National Commission on Social Security Reform,” December 16, 1981,
http://www.ssa.gov/history/reports/gspan8.html.
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6. Senator Daniel Patrick Moynihan (D-NY), ranking minority member of the
Social Security Subcommittee of the Senate Committee on Finance; and
7. Representative Claude Pepper (D-FL), chairman of the House Select Committee
on Aging.
The other eight individuals who served on the commission are (in alphabetical order):
1. Robert Ball, former commissioner of Social Security from 1962 to 1973;
2. Robert Beck, chairman and CEO of Prudential Insurance and a member of the
President’s Export Council;
3. Mary Falvey Fuller, vice president, Shaklee Corp., San Francisco, CA, and a
member of the 1979 Advisory Council on Social Security;
4. Alan Greenspan, head of Townsend-Greenspan and Co., a member of President
Ronald Reagan’s Economic Policy Advisory Board, and former chair of
President Gerald Ford’s Council of Economic Advisors;
5. Martha Keys, former Member of Congress (D-KS) and former Assistant
Secretary of the Department of Health and Human Services;
6. Lane Kirkland, president of the AFL-CIO;
7. Alexander Trowbridge, president of the National Association of Manufacturers
and a member of the President’s Task Force on Private Sector Initiatives; and
8. Joe Waggonner, consultant and former Member of Congress (D-LA).
Commission Activities
The commission met nine times over an 11-month period from February 1982 to December 1982,
and a government official was present at all meetings. The commission did not hold public
hearings. The commission reviewed the results of many hearings, previous commissions, studies,
and reports. The commission also sought the advice of a number of experts who gave
presentations to the commission. Eight experts provided statements or papers to the commission.
The commission’s 13 professional staff members prepared 67 analytical memoranda.
As of the last substantive meeting in November 1982, the commission agreed in concept on the
following issues:
 The magnitude of the financing problem,
 Maintaining the structure of the Social Security program and not undermining its
key principles,
 Incorporating a “fail safe” measure that would automatically increase revenues or
decrease expenditures to sustain the program through financial crises, and
 Inclusion of a “stabilizer” provision to help insulate the program from economic
uncertainties regarding the relative growth in wages and prices.
In addition, the commission came to substantial agreement on certain proposals:
 Coverage of certain payments under deferred compensation plans,
 The establishment of more current and easily understood trust fund investment
procedures,
 Inclusion of two public members on the Board of Trustees of the Social Security
trust funds,
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 Removal of Social Security trust fund operations from the unified federal budget,
and
 A study of the feasibility of establishing the Social Security Administration as an
independent agency.39
By the last formal meeting on December 10, 1982, the commission had not developed consensus
recommendations. There was widespread concern that the commission had failed. According to
one account, the impasse was broken when Senator Dole published an op-ed in the New York
Times calling for relatively modest steps instead of radical change, which sparked Senator
Moynihan to approach Senator Dole personally to suggest trying again.40 The two met the next
day with Robert Ball. Subsequent meetings included Alan Greenspan and Representative
Conable, creating a “gang of five” that met semi-secretly at Blair House (the President’s guest
house located across Pennsylvania Avenue from the White House), on Capitol Hill, and at the
home of then-White House Chief of Staff James Baker. White House officials Richard Darman
and David Stockman were also involved in the negotiations. President Reagan extended the
original deadline for the commission’s report (December 31, 1982) twice through Executive
Orders 12397 and 12402.
Discussions among the smaller group of negotiators resulted in a consensus package that was
projected to resolve two-thirds of the system’s projected long-range actuarial deficit. Twelve of
the 15 commission members endorsed the consensus package.41 The three members of the
commission who did not endorse the recommendations were Representative Archer (R-TX,
ranking minority member of the Social Security Subcommittee of the House Committee on Ways
and Means); Senator Armstrong (R-CO, chairman of the Social Security Subcommittee of the
Senate Committee on Finance); and former Representative Waggonner (D-LA).
Commission Report
On January 20, 1983, the commission delivered its final report to President Reagan.42 The
commission’s final recommendations followed the principle of balancing tax increases with
benefit reductions, a principle that was first proposed by Senator Heinz in late 1982.43 The
commission also recommended unanimously that Congress not alter the fundamental structure of
the Social Security program or undermine its fundamental principles in its deliberations on
financing proposals.44

39 Svahn and Ross, p. 7.
40 There are several versions of how a small group of negotiators was formed. This version is taken from Robert M.
Ball, The Greenspan Commission: What Really Happened (New York: The Century Foundation Press, 2010), p. 35.
41 By one account, Senator Dole stated that the commission had come very close to failing to come up with a
compromise. He stated that the commission would not have arrived at a package without the active participation of
President Reagan, through his intermediaries, and House Speaker O’Neill (from a transcript of The MacNeil-Lehrer
Report, January 17, 1983). See also Jane Perlez, “Gain Is Reported on 2-Part Accord on Social Security,” New York
Times, January 10, 1983, https://www.nytimes.com/1983/01/10/us/gain-is-reported-on-2-party-accord-on-social-
security.html.
42 Report of the National Commission on Social Security Reform, January 1983, available at http://www.ssa.gov/
history/reports/gspan.html (hereinafter cited as Greenspan Commission Report).
43 Ball, The Greenspan Commission, pp. 30-31.
44 Greenspan Commission Report, ch. 2.
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Estimates at the time showed that the commission’s consensus package would resolve two-thirds
of the system’s projected long-range actuarial deficit.45 Key recommendations, roughly balanced
between revenue increases and benefit reductions, were to:
 make Social Security coverage mandatory for newly hired federal civilian
employees and employees of nonprofit organizations;
 prohibit state and local governments from terminating Social Security coverage
for their employees once coverage had been elected;
 delay the annual Social Security cost-of-living adjustment (COLA) from June to
December, resulting in a one-time delay of six months in 1983;46
 make up to one-half of Social Security benefits subject to federal income taxes
for certain beneficiaries and credit the revenues to the Social Security trust
funds;47
 establish a “windfall elimination provision” to reduce Social Security benefits for
workers who also receive pensions from employment that was not covered by
Social Security;48
 increase the delayed retirement credit gradually from 3% per year to 8% per year
(up to age 70) for people who delay receipt of benefits until after full retirement
age;
 increase the Social Security payroll tax rate for self-employed workers, making it
equal to the combined employer/employee payroll tax rate;
 accelerate scheduled increases in the Social Security payroll tax rate;
 increase benefits for certain widows/widowers and divorced spouses;
 base the Social Security COLA on the lower of (1) the increase in the Consumer
Price Index (CPI) or (2) the increase in the Average Wage Index if the trust fund
ratio is below 20%, with subsequent “catch-up” adjustments if the trust fund ratio
is above 32%;49
 authorize interfund borrowing by the Social Security trust funds from the
Medicare HI trust fund for 1983-1987; and
 remove the operations of the Social Security trust funds from the unified federal
budget.50

45 At the time, the system’s projected long-range actuarial deficit was equal to 1.80% of taxable payroll. Estimates
showed that the consensus package would eliminate two-thirds of the projected funding shortfall, an amount equal to
about 1.22% of taxable payroll.
46 For more information, see CRS Report 94-803, Social Security: Cost-of-Living Adjustments, by Paul S. Davies and
Tamar B. Breslauer.
47 For more information, see CRS Report RL32552, Social Security: Taxation of Benefits, by Paul S. Davies.
48 For more information, see CRS Report 98-35, Social Security: The Windfall Elimination Provision (WEP), by Zhe
Li.
49 The CPI is a measure of price growth prepared by the U.S. Department of Labor, Bureau of Labor Statistics. The
Average Wage Index is a measure of wage growth prepared by the Social Security Administration.
50 The report states that the commission “believes that changes in the Social Security program should be made only for
programmatic reasons, and not for purposes of balancing the budget. Those who support the removal of the operations
of the trust funds from the budget believe that this policy of making changes only for programmatic reasons would be
more likely to be carried out if the Social Security program were not in the unified budget” (Greenspan Commission
Report, ch. 2). As part of the Social Security Amendments of 1983 (P.L. 98-21), Social Security was removed from the
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Congressional Action
The commission’s final report became the basis for H.R. 1900, the Social Security Amendments
of 1983 (P.L. 98-21). H.R. 1900 incorporated the large majority of the commission’s
recommendations, along with additional provisions to resolve the remaining one-third of the
system’s projected long-range actuarial deficit.51 The 1983 amendments made changes to Social
Security and other programs authorized by the Social Security Act. The House report
accompanying H.R. 1900 states that “the primary focus of [the legislation] is on restoring the
financial soundness of the old age and survivors’ insurance (OASI) program, which is facing
severe cash shortfalls over the next 7 years.”52
House of Representatives
On March 4, 1983, the House Committee on Ways and Means reported out H.R. 1900.53 The bill
included most of the recommendations of the Greenspan Commission, numerous additional
relatively minor Social Security provisions, and other provisions mostly related to long-range
financing issues.
On March 9, 1983, the House of Representatives debated H.R. 1900. Proponents of the bill
maintained that, although there were many provisions that individuals or certain groups might
find troublesome, there was an overriding need to deal quickly and effectively with the Social
Security financing issues. Opponents questioned whether this was the best way to solve the
system’s financial difficulties. For example, many favored raising the retirement age instead of
increasing Social Security payroll taxes.54
Before the 1983 amendments, full Social Security retirements benefits were payable beginning at
age 65 (the full retirement age). Reduced Social Security retirement benefits were payable
beginning at age 62 (the early retirement age). Benefits claimed before age 65 were subject to a
permanent reduction for each month of benefit receipt from age 62 to age 65. The maximum
reduction for early retirement was 20% (i.e., for benefits claimed at age 62 and a full retirement
age of 65). Representative J. J. Pickle (D-TX) offered an amendment to increase the full
retirement age gradually to 66 for people born 1943 to 1954 and to 67 for people born 1960 or
later. Representative Pickle’s amendment was approved by a vote of 228 (152-R, 76-D) to 202
(14-R, 188-D).55 Reduced retirement benefits would continue to be payable beginning at age 62.

unified federal budget beginning in FY1993. For more information, see CRS In Focus IF11615, The Social Security
Trust Funds and the Budget, by Barry F. Huston and Bill Heniff Jr.
51 David Stuart Koitz, Social Security Financing Reforms: Lessons from the 1983 Amendments, CRS Report 97-741,
July 24, 1997. This report is out of print. It is available from CRS upon request.
52 U.S. Congress, House Committee on Ways and Means, Social Security Act Amendments of 1983, report to
accompany H.R. 1900, 98th Cong., 1st sess., March 4, 1983, H. Rept. 98-25, Part 1 (Washington, DC: GPO, 1983), p. 1
(hereinafter cited as 1983 House Report 98-25, Part 1). Changes made to the Medicare, Unemployment Compensation,
and Supplemental Security Income programs under P.L. 98-21 are not discussed in this CRS report.
53 Information on House and Senate action on the 1983 legislation is from CRS Report RL30920, Social Security:
Major Decisions in the House and Senate Since 1935, by Tamar B. Breslauer and William R. Morton. See the CRS
report for additional details. In addition, for a complete legislative history of H.R. 1900, see Svahn and Ross.
54 The final version of the bill as enacted raised the retirement age and made changes to the Social Security payroll tax.
Specifically, it accelerated scheduled increases in the Social Security payroll tax rate for employers and employees, and
it increased the Social Security payroll tax rate for self-employed workers, making it equal to the combined
employer/employee payroll tax rate.
55 Congressional Record, daily edition, March 9, 1983, House, Roll call no. 22, not voting 3, pp. H1064-H1065.
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However, the maximum reduction for early retirement would increase from 20% to 30%. (The
30% reduction would apply for benefits claimed at age 62 and a full retirement age of 67.)
Representative Claude Pepper (D-FL) then offered a substitute amendment to increase the Social
Security payroll tax rate from 6.20% to 6.73% (for employers and employees each) beginning in
2010. The amendment was rejected by a vote of 132 (1-R, 131-D) to 296 (165-R, 131-D).56 The
amendment would have superseded Representative Pickle’s amendment to increase the full
retirement age.
On March 9, 1983, the House passed H.R. 1900, as amended, by a vote of 282 (97-R, 185-D) to
148 (69-R, 79-D).57
Senate
On March 11, 1983, the Senate Committee on Finance reported out S. 1. As with the House bill,
the committee adopted long-term financing measures along the lines of the recommendations of
the Greenspan Commission.
On March 16, 1983, the Senate began consideration of H.R. 1900. Seventy-two amendments to
the bill were offered on the Senate floor; the Senate adopted 49 of them. Among other differences
with the House bill, the Senate version of H.R. 1900 would have (1) raised the full retirement age
to age 66 for those reaching age 62 in 2011 or later and (2) deferred bringing newly hired federal
employees into the Social Security program until the month following enactment of a new civil
service retirement system.
On March 23, 1983, the Senate passed H.R. 1900, as amended, by a vote of 88 (47-R, 41-D) to 9
(6-R, 3-D).58
Conference Agreement59
The primary issue facing the House and Senate conferees was how to eliminate the system’s
remaining projected long-range funding shortfall. On March 24, 1983, conferees agreed to the
final provisions of H.R. 1900. The conferees agreed to the House provision to raise the full
retirement age by two years from 65 to 67. The Senate provision would have raised the full
retirement age to 66. Senate conferees agreed to recede on the issue of mandatory Social Security
coverage for newly hired federal employees. The Senate provision would have delayed
mandatory coverage for new federal employees until a new civil service retirement system could
be developed. Under the conference agreement, federal employees hired on or after January 1,
1984, were mandatorily covered under the Social Security program.
On March 24, 1983, the House passed the conference report by a vote of 243 (80-R, 163-D) to
102 (48-R, 54-D).60
On March 25, 1983, the Senate passed H.R. 1900, as agreed to in the conference report, by a vote
of 58 (32-R, 26-D) to 14 (8-R, 6-D).61

56 Congressional Record, daily edition, March 9, 1983, House, Roll call no. 24, not voting 5, p. H1079.
57 Congressional Record, daily edition, March 9, 1983, House, Roll call no. 26, not voting 3, pp. H1080-H1081.
58 Congressional Record, daily edition, March 23, 1983, Senate, Roll call no. 53, not voting 3, p. S3775.
59 Congressional Quarterly Almanac: 1983, p. 226.
60 Congressional Record, daily edition, March 24, 1983, House, Roll call no. 47, not voting 88, p. H1787.
61 Congressional Record, daily edition, March 24, 1983, Senate, Roll call no. 54, not voting 28, p. S4104.
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On April 20, 1983, President Reagan signed H.R. 1900 into law (P.L. 98-21).
Provisions in the Social Security Amendments of 1983 that were not part of the Greenspan
Commission’s recommendations include:
 a gradual increase in the full retirement age from 65 to 67;62
 “fail-safe” financing mechanisms, including speeding up the crediting of Social
Security tax receipts to the trust funds and extending authority for interfund
borrowing on a broader basis than recommended by the commission;
 provisions affecting dependents and survivors, including the elimination of
remaining gender-based distinctions and modification of the Government
Pension Offset, which reduces Social Security spousal and survivor benefits for
people who also receive pensions from employment that was not covered by
Social Security;63 and
 provisions with relatively small impact on revenues or expenditures, including
limitations on Social Security benefit payments to certain noncitizens residing
outside the United States and convicted felons, expanded use of death certificates
in verifying benefit eligibility, and others.
COLA Provisions Enacted in 1983
Following the Social Security Amendments of 1977 (P.L. 95-216), economic conditions proved
far worse than projected at the time. In 1980, for example, the CPI increased 13.5% (compared to
a projected increase of 4.7%), real wages declined 4.9% (compared to a projected increase of
2.4%), and unemployment was 7.1% (compared to a projected 5.2%).64
Increases in the CPI have a direct effect on Social Security program costs because the annual
Social Security COLA is based on the change in prices as measured by the CPI. The Social
Security COLA is based on a formula in the law that specifies the measure of price change and
the measurement period to be used in the calculation.65 The larger the increase in the CPI over the
measurement period, the larger the annual COLA. The impact of CPI increases in the late 1970s
on Social Security’s finances is explained in the House report that accompanied H.R. 1900
(Social Security Amendments of 1983):
...each percentage point in the CPI increases trust fund costs by about $1.5 billion, so that
the 1980 increase alone cost about $13 billion more than predicted. As a result, benefit
increases raised trust fund outlays beyond expectations at precisely the time real wages
were declining and unemployment was increasing, so that revenues have not kept pace with
outlays. The OASI program has had to use reserves to make up for shortfalls in yearly
income every year since 1977.66

62 For more information, see CRS Report R44670, The Social Security Retirement Age, by Zhe Li.
63 For more information, see CRS Report RL32453, Social Security: The Government Pension Offset (GPO), by Zhe
Li.
64 1983 House Report 98-25, Part 1, p. 13 (see table titled Comparison of Key Economic Indicators, 1977 Forecast and
Actual Experience).
65 The COLA provision is in Section 215(i) of the Social Security Act (42 U.S.C. §415(i)). The COLA is based on the
Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). For more information, see CRS Report
94-803, Social Security: Cost-of-Living Adjustments, by Paul S. Davies and Tamar B. Breslauer.
66 1983 House Report 98-25, Part 1, p. 12.
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Among other cost-saving measures, the 1983 amendments included two provisions related to the
Social Security COLA: (1) a 6-month delay in the 1983 COLA and a shift of subsequent COLAs
to a calendar year basis, and (2) a trust fund stabilizer provision.67
Before the 1983 amendments, the annual Social Security COLA was effective in June (payable in
July), and the COLA was applied without regard to the status of the trust funds (i.e., the level of
trust fund reserves).68 The 1983 amendments delayed the June 1983 COLA until December 1983
(payable in January 1984) and made all subsequent COLAs effective in December (payable in
January).69 In addition, the 1983 amendments included a trust fund stabilizer provision under
which Social Security COLAs are based on the lower of (1) the increase in the CPI or (2) the
increase in average wages if the combined trust fund balance drops below a specified level
(below 15% of outlays through 1988 or below 20% of outlays beginning in 1989). Benefits are
later adjusted to reflect full cost-of-living increases if the combined trust fund balance rises above
a specified level (above 32% of outlays).70 The trust fund stabilizer provision remains in effect
under current law but has never been triggered.
Effectiveness of the Commission
By the last formal meeting on December 10, 1982, the commission had failed to develop
consensus recommendations. The impasse was broken when a smaller group of commission
members and White House officials began to meet privately in December 1982. In the end, the
recommendations in the commission’s final report were projected to resolve two-thirds of Social
Security’s projected long-range funding shortfall, leaving Congress to resolve the rest. Robert
Ball, a commission member and former Social Security Commissioner, stated:
Nothing, however, should obscure the fact that the National Commission on Social
Security Reform was not an example of a successful bipartisan commission. The
commission itself stalled—essentially deadlocked, despite continuing to talk—after
reaching agreement on the size of the problem that needed to be addressed…. A
commission is no substitute for principled commitment.71
Ball credits the success of the extraordinary negotiations in January 1983 to several factors: Alan
Greenspan’s “low-key, completely fair handling of his chairmanship;” the fact that “the key
people in the final negotiations fortunately were the least ideological and most flexible of all the
people involved since the inception of the commission;” “negotiations by proxy” whereby
President Reagan and House Speaker O’Neill were always kept current but never committed

67 Additional information on the COLA provisions enacted in 1983 is provided to address questions received by CRS.
68 At the time, the COLA was measured from the average CPI of the first quarter of the previous year in which a benefit
increase was provided to the average of the first quarter of the current year. In addition, no COLA was provided in any
year in which the increase in the CPI was less than 3%. (There was a 3% trigger.)
69 All subsequent COLAs were based on the increase in the CPI from the third quarter of the last year in which a COLA
was provided to the third quarter of the current year. For the December 1983 COLA only, the 3% trigger was waived.
During 1986, inflation slowed to a rate that made it unlikely that the 3% trigger would be met. As part of the Omnibus
Budget Reconciliation Act of 1986 (P.L. 99-509), the 3% trigger for Social Security COLAs was eliminated, allowing a
1.3% COLA to be authorized for December 1986 (payable in January 1987). Under current law, Social Security
benefits are increased automatically if there is an increase of at least 0.1% in the CPI over the measurement period. If
there is a less than 0.1% change in the CPI, benefit levels remain the same.
70 U.S. Congress, Conference Committee, Social Security Amendments of 1983, conference report to accompany H.R.
1900, 98th Cong., 1st sess., March 24, 1983, H. Rept. 98-47, pp. 121-122 and p. 131, https://www.finance.senate.gov/
imo/media/doc/Conf-98-47.pdf.
71 Ball, The Greenspan Commission, p. 70.
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themselves publicly until the last day of negotiations; and the threat of imminent insolvency of
the Social Security system.72
Post-1983 Commissions
Since 1983, other presidential commissions have studied potential changes to the Social Security
program to address financing issues and other policy objectives. In some cases, the commission’s
focus was exclusively on Social Security. In other cases, the commission’s focus was on broad,
government-wide deficit reduction efforts. Examples are provided below.
2001
In May 2001, President George W. Bush established the President’s Commission to Strengthen
Social Security.73 The 16-member commission appointed by President Bush was composed of
eight Republicans and eight Democrats. The commission was directed to make recommendations
on ways to “modernize and restore fiscal soundness to the Social Security system” in accordance
with six guiding principles. One of the principles mandated the creation of voluntary personal
retirement accounts as a component of the Social Security program.
On December 21, 2001, the commission issued its final report, Strengthening Social Security and
Creating Personal Wealth for All Americans.74 The report, which was unanimously approved by
the commission, included three alternative plans for reforming Social Security. Under all three
plans, workers could choose to invest in personal retirement accounts and their traditional Social
Security benefits would be reduced (offset) by some amount. There was no congressional action
on any of the three plans developed by the commission.
2010
In February 2010, President Barack Obama established the National Commission on Fiscal
Responsibility and Reform.75 The 18-member commission was composed of (1) six members
appointed by President Obama (including the two co-chairs); (2) six Senators—three appointed
by the Senate majority leader and three appointed by the Senate minority leader; and (3) six
Representatives—three appointed by the Speaker of the House and three appointed by the House
minority leader. The commission (commonly known as the Fiscal Commission or the Simpson-
Bowles Commission after co-chairs Alan Simpson and Erskine Bowles) was charged with
“identifying policies to improve the fiscal situation in the medium term and to achieve fiscal
sustainability over the long run.” In addition, the commission was directed to “propose
recommendations that meaningfully improve the long-run fiscal outlook, including changes to

72 Ball, The Greenspan Commission, p. 69.
73 Executive Order 13210, “President’ Commission to Strengthen Social Security,” 66 Federal Register 22895, May 2,
2001, https://www.federalregister.gov/documents/2001/05/04/01-11505/presidents-commission-to-strengthen-social-
security.
74 President’s Commission to Strengthen Social Security, Strengthening Social Security and Creating Personal Wealth
for All Americans, December 2001, https://www.ssa.gov/history/reports/pcsss/Final_report.pdf.
75 Executive Order 13531, “National Commission on Fiscal Responsibility and Reform,” 75 Federal Register 7927,
February 18, 2010, https://www.federalregister.gov/documents/2010/02/23/2010-3725/national-commission-on-fiscal-
responsibility-and-reform.
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address the growth of entitlement spending and the gap between the projected revenues and
expenditures of the Federal Government.”
On December 1, 2010, the commission issued its final report, The Moment of Truth: Report of the
National Commission on Fiscal Responsibility and Reform.76 The commission made a number of
recommendations with respect to Social Security benefits and tax revenues. There was no
congressional action on the Social Security component of the plan developed by the commission.
Recent Commission Proposals
In recent years, there have been proposals calling for new commissions to study Social Security
and make recommendations for the purpose of developing legislation. In some cases, Congress
would be required to act on any such legislation. In the 117th Congress, for example,
Representative Mike Gallagher and Senator Mitt Romney introduced the Time to Rescue United
States Trusts Act of 2021. The measure was introduced in the House on April 15, 2021 (H.R.
2575) and in the Senate on April 21, 2021 (S. 1295). Congress.gov provides the following
summary of the measure:
This bill establishes congressional rescue committees to develop recommendations and
legislation to improve critical social contract programs.
A critical social contract program is a federal program
• for which a federal trust fund is established (e.g., Social Security, Medicare, and
federal highway programs),
• with outlays of at least $20 billion during the year preceding the year in which this
bill is enacted, and
• for which the amount of dedicated federal funds and federal trust fund balances
will be inadequate to meet the total amount of outlays of the program that would
otherwise be made.
Each rescue committee may develop recommendations and legislation to improve the
program for which it was established, including by (1) increasing the duration of positive
balances of the federal trust fund established for the program, and (2) providing for the
solvency of the federal trust fund established for the program during a 75-year period.
Congress must use specified expedited legislative procedures to consider legislation that is
approved and submitted by the rescue committees.77
Looking Ahead
The experiences of the past can inform the debate about future changes to the Social Security
program to address financing issues and other policy objectives. The experience of the Greenspan
Commission, for example, can shed light on one approach that was used in the past to reach
consensus on a legislative package designed to restore financial balance to the system. That
approach may or may not have the same outcome today. In 1983, the Social Security trust funds
were facing imminent insolvency. When the Social Security Amendments of 1983 were signed
into law in April 1983, the program was within months or weeks of being unable to pay full

76 National Commission on Fiscal Responsibility and Reform, The Moment Of Truth: Report of the National
Commission on Fiscal Responsibility and Reform, December 2010, https://www.ssa.gov/history/reports/ObamaFiscal/
TheMomentofTruth12_1_2010.pdf.
77 Information is from Congress.gov as of February 24, 2022.
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scheduled benefits on time. Today, projections show that the program can continue to pay full
scheduled benefits on time for just over a decade. Despite the relatively longer time frame, the
Social Security Board of Trustees recommends that lawmakers “address the projected trust fund
shortfalls in a timely way in order to phase in necessary changes gradually and give workers and
beneficiaries time to adjust to them.”78 From the perspective of lawmakers, the time frame for
making changes to the program may or may not be viewed as requiring “immediate” action.
In addition, the approach taken in 1983 may or may not reflect the policy objectives of lawmakers
today. For example, the Greenspan Commission was asked to study the Social Security program’s
financing problems (short term and long term) and recommend ways to solve the system’s
financial imbalance. At the time, the policy debate was not about fundamental reform but rather
how to balance the system’s finances by increasing income and reducing costs. The commission’s
recommendations followed the principle of balancing tax increases with benefit reductions. The
program changes enacted in 1983 may or may not reflect current policy objectives. Today, Social
Security legislation reflects a variety of policy objectives that go beyond restoring financial
balance to the system. Some proposals, for example, favor benefit increases over benefit
reductions, and other program expansions. Other proposals, for example, would alter provisions
of current law that were established or modified as part of the 1983 amendments, such as the
Windfall Elimination Provision and the Government Pension Offset.
Similarly, in 1983, there was a focus on restoring Social Security trust fund solvency on average
over the next 75 years (the traditional long-range projection period).79 In recent years, some
proposals have aimed to restore trust fund solvency for the next 75 years and beyond (sustainable
solvency), while others have aimed to extend trust fund solvency for some additional number of
years (not necessarily 75 years and in some cases for relatively few years). Looking ahead, the
timing, degree, and nature of any future changes to the Social Security program will reflect the
policy objectives of lawmakers engaged in the debate today.

Author Information

Barry F. Huston
Dawn Nuschler
Analyst in Social Policy
Specialist in Income Security

78 2021 Annual Report of the Social Security Board of Trustees, p. 6.
79 For more information, see CRS In Focus IF11851, Social Security Long-Range Projections: Why 75 Years?, by
Dawn Nuschler.
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Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

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