Social Security: A Discussion on the Facts and the Path Forward

Chairman Graham, Ranking Member Merkley, and Members of the Committee:

Thank you for inviting me to testify on Social Security: A Discussion on the Facts and the Path Forward. My name is Barry Huston and I am a Specialist in Income Security at the Congressional Research Service (CRS). My testimony will provide an overview of Social Security, the program's projected financial shortfall, issues concerning the elimination of the shortfall, and conclude with a high-level discussion of past reform efforts.

Background on Social Security

Old-Age, Survivors, and Disability Insurance (OASDI), or Social Security, is a federal social insurance program that provides monthly cash benefits to eligible retired or disabled workers and their dependents, and to the eligible survivors of deceased insured workers.¹ In 2026, Social Security covers approximately 186 million workers (about 93% of the workforce) and provides monthly cash benefits to over 70 million beneficiaries.² The program is authorized under Title II of the Social Security Act and administered by the Social Security Administration (SSA).

Social Security is financed primarily by dedicated payroll taxes, which are credited to the program's Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust funds. The total Social Security payroll tax rate is levied on the earnings of covered workers, up to an annual limit (or contribution and benefit base).³ The two trust funds also receive income from the taxation of a portion of Social Security benefits and from interest earned on U.S. securities held by the trust funds (i.e., funds accumulated from years in which total income exceeded total cost). The OASI and DI trust funds are overseen by a Board of Trustees (trustees), which is tasked with reporting to Congress annually on the current and projected financial status of the trust funds. In their annual reports to Congress, the trustees have projected a financial shortfall within the 75-year long-range projection period every year since 1984.⁴ The projected shortfall is caused by demographic factors (e.g., fertility, mortality, and immigration), economic factors (e.g., wage growth, price growth, and productivity), and program-specific factors (e.g., disability benefits claim rates).

Of note: The main driver of the shortfall is demographic factors—primarily, the aging of the U.S. population caused by decreases in fertility and increases in longevity, which have resulted over time in a lower ratio of workers paying into the program (i.e., revenues) relative to beneficiaries collecting from the program (i.e., costs).⁵

Projected Financial Shortfall

The program's projected financial shortfall results from the relationship of its revenues, costs, and trust funds. The trustees' intermediate assumptions—their best estimate of future experience—project an ongoing and continued imbalance between these elements and estimate that the program will not be able to pay the full amounts of scheduled benefits in about seven years.⁶ Under the trustees' projections, it is estimated that the Social Security program will be able to pay 100% of scheduled payments until sometime in 2034 and about 75% of scheduled payments in the decades thereafter.⁷

Revenues, Costs, and the Trust Funds

Social Security has three sources of revenue: (1) payroll taxes, (2) tax revenues from the taxation of Social Security benefits, and (3) interest earned on asset reserves held in the trust funds. The Social Security payroll tax—a 12.4% payroll tax, evenly split between employees and employers, on covered earnings up to an annual limit—is the program's primary funding mechanism.⁸ In addition, some beneficiaries are subject to federal income taxes on a portion of their Social Security benefits.⁹ These two sources of revenue comprise the program's tax revenues, sometimes referred to as non-interest revenue. The program's tax revenues are credited to the program's trust funds, from which the program's costs are paid. As such, the trust funds provide an accounting mechanism that tracks the program's revenues and costs. The trust funds also provide a means to hold any accumulated assets (i.e., revenues not immediately needed to support costs). The excess tax revenues are held as asset reserves in the trust funds and are invested in interest-bearing U.S. Treasury securities.¹⁰ The resulting interest provides the third source of revenue.

Social Security has three costs: (1) monthly benefit payments, (2) administrative expenses,¹¹ and (3) the Railroad Retirement financial interchange.¹² Administrative expenses and the financial interchange typically account for about 1% of program costs on an annual basis.¹³ Thus, the program's costs are essentially its monthly benefits, which account for about 99% of costs on an annual basis.

Given projected changes to the program over the 75-year projection period—in terms of the number of workers, the proportion of earnings subject to the payroll tax,¹⁴ price growth, and wage growth—a common practice is to compare the program's tax revenues and costs as a rate of taxable payroll.¹⁵ As the program grows—in terms of the number of covered workers (i.e., revenue) and the number of beneficiaries (i.e., cost)—this practice provides a means to compare revenues and costs in a standardized manner. Figure 1 displays this standardization with tax revenues (i.e., non-interest revenue) and costs displayed as a percentage of taxable payroll from 2000 to 2099.¹⁶

Figure 1 shows that the projected revenue rate is relatively stable (flat) over the projection period at just over 13% of taxable payroll. Because the revenue rate is expressed as a percentage of taxable payroll, and the combined Social Security payroll tax rate is fixed under current law at 12.4% of taxable earnings, any remaining variation in the revenue rate is due to assumptions about the income from the taxation of benefits, which is a relatively small portion of revenue.¹⁷ The cost rate, which has been higher than the revenue rate since 2010, is projected to rise rapidly through 2040 because of demographic factors and then rise more gradually through 2080 before declining somewhat afterwards.¹⁸ The trustees project that costs will continue to exceed total tax revenues indefinitely. That is, the program will continue to experience annual deficits.¹⁹ At the point of projected trust fund depletion (2034)—when no trust fund asset reserves or interest income will be available—the difference between the projected cost rate and projected revenue rate reflects a benefit reduction. At this point, there will be a difference between scheduled benefits (benefit amounts specified under law) and payable benefits (percentage of scheduled benefits supported by tax revenues). The concept of scheduled versus payable benefits is discussed later and is visually represented by Figure 3.

Figure 1. Social Security Cash Flow as a Percentage of Taxable Payroll, 2000-2099 On a Combined Basis Under the 2025 Intermediate Assumptions

Source: 2025 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, June 18, 2025, Underlying data for Figure II.D2, p. 15, https://www.ssa.gov/OACT/TR/2025/tr2025.pdf. Note: The trustees' intermediate assumptions reflect their best estimate as to the future experience. This figure examines the trust funds on a hypothetical, combined basis. The payable percentages differ from Figure 3 because of P.L. 119-21, see footnote 6.

Cash Deficits, Annual Deficits, and Asset Reserves

The Social Security Amendments of 1983 (P.L. 98-21) are commonly considered the most recent major reform to Social Security.²⁰ When the amendments were passed, Social Security was months away from being unable to pay full benefits. Among other provisions, the amendments used a combination of revenue-increasing and cost-reducing measures to improve the program's long-range financial status. As a result, from 1983 through 2009, Social Security operated with a cash surplus (i.e., tax revenues exceeded costs).²¹ Each of those year's cash surpluses accumulated in the trust funds and were invested in government securities—as required by law—earning interest and contributing to a growing level of asset reserves held in the trust funds (see Figure 2).²²

Since 2010, the Social Security program has operated with cash deficits (i.e., costs exceeded tax revenues).²³ Thus, starting in 2010 the program has relied in part on interest income to pay the full amounts of scheduled benefits. As a result, the asset reserves continued to increase but at a slower pace (see Figure 2). Under the intermediate assumptions, the trustees project cash deficits for the remainder of the 75-year projection period.

Starting in 2021, the Social Security program has been operating annual deficits (i.e., total costs exceeded total revenues). Tax revenues and interest together have not covered the amount of scheduled benefits. Thus, since 2021, Social Security has redeemed a portion of the asset reserves held in the trust funds in order to pay the full amounts of scheduled benefits. Under the intermediate assumptions, the trustees project continuing and generally increasing annual deficits that will require redeeming increasing amounts of asset reserves (see Figure 2).²⁴ The program is projected to be able to rely on asset reserves to help pay scheduled benefits for about seven more years. The projected date of total asset reserve depletion is 2034 under the trustees intermediate (i.e., their best estimate) assumptions. At that point, with no trust fund assets to redeem, Social Security would be able to pay out in benefits only what it receives in tax revenues, which is projected to vary from 72% to 81% of scheduled benefits over the remainder of the 75-year projection period.²⁵ The trustees' low-cost set of assumptions represents a future experience that is the most advantageous to the program's financial status—thus resulting in a less immediate depletion of asset reserves (2051)—whereas the high-cost set of assumptions represents a future experience that is the least advantageous to the program's financial status—thus resulting in a more immediate depletion of asset reserves (2032).

Figure 2. Historical and Projected Social Security Trust Fund Asset Reserves, In Billions of Current Dollars 1980-2055 Under Intermediate, Low-cost, and High-cost Assumptions

Source: Congressional Research Service (CRS) and the supplemental single-year tables (Table VI.G8) for the 2025 Annual Report (see https://www.ssa.gov/OACT/TR/2025/lrIndex.html). Notes: Projections use the trustees' 2025 projections. The low-cost set of assumptions represents a future experience (e.g., higher fertility, higher mortality, lower unemployment) that is the most advantageous to the program's financial status. The high-cost set of assumptions represents a future experience (e.g., lower fertility, lower mortality, higher unemployment) that is the least advantageous to the program's financial status. The trustees use the intermediate set of assumptions to illustrate their best guess as to the future experience. Cash surpluses (deficits) denote years in which tax revenues exceed cost (cost exceed tax revenues). Annual surpluses (deficits) denote years in which total revenues exceed cost (cost exceed total revenue).

Scheduled Versus Payable Benefits

As discussed, Social Security's ability to pay the full amounts of scheduled benefits to current and future beneficiaries is determined by its revenues, costs, and trust funds. At the point of asset reserve depletion, there would be a difference between scheduled benefits (i.e., benefit amounts specified under current law) and payable benefits (i.e., the percentage of scheduled benefits supported by revenue). Figure 3 demonstrates that, prior to trust fund depletion, scheduled benefits will equal payable benefits. However, at the time of depletion (2034) and absent any changes to current law, total payable benefits will become equal to continuing tax revenues. In 2034, payable benefits would be about 80% of scheduled benefits, and this would gradually decrease to 71% by 2099. At the point of trust fund depletion, Figure 3 displays different percentages of payable benefits than Figure 1. This difference (i.e., lower payable benefits) reflects updated projections to include the effects of P.L. 119-21.

Figure 3. Social Security Benefits: Scheduled Versus Payable (2000-2099) Payable Benefits as a Percentage of Scheduled Benefits

Source: CRS, based on memo from Kyle Burkhalter, Actuary, and Zhongde Li, Actuary, to Daniel Nickerson, Supervisory Actuary, and Karen Glenn, Chief Actuary, Social Security Administration, Office of the Chief Actuary (OCACT), "Current-Law OASDI Payable Percentages: Current-Law Revenue as a Percent of the Cost of Providing Scheduled Benefits Through Year 2099, Incorporating the Effects of P.L. 119-21—Information," August 15, 2025. Notes: Projections are based on the trustees' 2025 intermediate assumptions and the projected effects of P.L. 119-21 (the FY2025 budget reconciliation law) for the combined Social Security trust funds. In calculating the share of payable benefits, OCACT limits revenue from the taxation of benefits to the amount that would be obtained from the payable benefits.

Eliminating the Projected Shortfall

Under current law and intermediate assumptions, the trustees estimate that in about seven years the Social Security program will be unable to pay scheduled benefits in full and on time. To illustrate the magnitude of the changes needed to make Social Security solvent over the next 75 years, the trustees estimate the hypothetical immediate payroll tax increase (3.65 percentage points; from 12.4% to 16.05%) or hypothetical immediate benefit reduction (22.4%) needed to eliminate the projected financial shortfall.²⁶ The projected rising costs, relative to revenues, indicate that were current law to change in the projected year of asset reserve depletion (2034), the hypothetical changes needed to eliminate the shortfall would increase in magnitude. If action were delayed until 2034, the trustees estimate a 4.27 percentage point increase in the payroll tax rate (from 12.4% to 16.67%) or a 25.8% reduction in benefits would be needed to eliminate the projected financial shortfall.²⁷ In addition to illustrating the magnitude of changes needed to eliminate the projected financial shortfall, the previous example helps to characterize the types of solvency-related options: revenue-increasing and cost-reducing.

In practice, there are many more solvency-related measures available to lawmakers than the hypothetical examples previously discussed. For instance, each year the SSA's Office of the Chief Actuary updates a list of financial effects for over 100 commonly proposed solvency-related measures.²⁸ The Congressional Budget Office provides a similar function in their Options for Reducing the Deficit and Social Security Policy Options.²⁹ One similarity shared among these reports is the likeliness that no single provision would eliminate the financial shortfall.³⁰ For this reason, many legislative proposals addressing the program's finances include both revenue-increasing and cost-reducing measures. To highlight the wide range of policy options available to lawmakers, some common solvency-related options (five revenue-increasing and five-cost-reducing) are listed in Table 1.

The selected policy options in Table 1 highlight some of the many types of provisions that lawmakers could include in solvency-related legislation. 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. 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."³¹

Timing

Solvency-related legislation may be affected by timing in numerous ways. For instance, because of the growing imbalance between program revenues and costs, the magnitude of changes needed to eliminate the projected financial shortfall generally increases with time. This point can be illustrated by examining how some solvency-related provisions would have had an impact on the program's financial status had they been implemented in previous years.

Figure 4 and Figure 5 demonstrate how the timing of two different hypothetical provisions would have affected the program's financial status, expressed as changes to the projected trust fund ratio. The trust fund ratio is the trust fund's asset reserves at the beginning of a year expressed as a percentage of the projected total cost for the year. For instance, a trust fund ratio of 200% indicates that two years of projected benefits could be paid with asset reserves absent any additional income. A test of the program's short-range financial adequacy is satisfied if (1) the projected trust fund ratio is at least 100% at the beginning of the 10-year projection period and remains so for the entire 10-year projection period or (2) the ratio is below 100% at the beginning of the 10-year projection period but is projected to reach at least 100% within five years and remain at least 100% for the remainder of the 10-year projection period.³²

Figure 4 shows the projected trust fund ratios had the taxable maximum been eliminated in the next year (e.g., under the 2010 Annual Report's intermediate assumptions, eliminate the taxable maximum beginning in 2011). Figure 5 shows the projected trust fund ratios had all future COLAs been reduced by 1.0 percentage point in different years. As can be seen, in both the revenue-increasing (Figure 4) and cost-reducing (Figure 5) example used, the trust fund ratio would have been improved had the change been implemented sooner (e.g., 2020) rather than more recently (e.g., 2025). Therefore, a change implemented in 2026 would have a more advantageous effect on the program's financial status than the same change implemented five years later.

Figure 4. Trust Fund Ratios: Eliminate the Taxable Maximum Source: CRS using SSA OCACT cost estimates (https://www.ssa.gov/OACT/solvency/provisions/index.html). Notes: The trust fund ratio is the ratio of asset reserves (combined OASI and DI) to the cost of the program for the year.

Figure 5. Trust Fund Ratios: Reduce Cost of Living Adjustments by 1.0 Percentage Point Source: CRS using SSA OCACT cost estimates (https://www.ssa.gov/OACT/solvency/provisions/index.html). Notes: The trust fund ratio is the ratio of asset reserves (combined OASI and DI) to the cost of the program for the year.

A second way in which solvency-related measures may be affected by timing is whether a provision is implemented at once or gradually over a period of time. The examples shown above (Figure 4 and Figure 5) both demonstrate an at once approach wherein the policy change would take effect immediately. However, lawmakers may choose to delay the impact of a policy change or make the impact gradual. For instance, lawmakers could choose to tax an increasing amount of earnings above the current-law taxable maximum until the taxable maximum is eventually eliminated over a period of years. Similarly, lawmakers could choose to reduce the annual COLAs by 0.1 percentage points each year until, after 10 years, all future COLAs would be reduced by 1.0 percentage point.

Congress has previously used such an approach. Although many of the provisions included in the Social Security Amendments of 1983 (P.L. 98-21) had an immediate effect, some did not. For example, one provision of the 1983 amendments gradually increased the full retirement age (FRA; the age at which a beneficiary would be entitled to his or her full basic monthly benefit without reduction for early claiming) from 65 to 67 over a 22-year period that started for those who turned age 62 in 2000. The increase in the FRA is fully phased in (the FRA is 67) for workers born in 1960 or later (i.e., for workers who become eligible for retirement benefits at age 62 in 2022).³³

Degree

As discussed, the 1983 amendments are considered the last major reform to the Social Security program. In the 1983 Annual Report, the trustees noted that the report marked the first time in a decade that the program showed a projected 75-year actuarial balance between cost and income.³⁴ After the 1983 legislation, the program's projected cost and income rates were relatively close over the long-term. However, in the ensuing years the program has moved farther out of actuarial balance.

In many Congresses since, lawmakers have introduced legislation that would eliminate the entirety of the projected financial imbalance. Proposals such as these result in sustainable solvency, in which the estimated trust funds ratio is positive throughout the 75-year projection period and rising or stable at the end of the projection period.

Conversely, some proposals seek to address a portion of the projected financial imbalance. For illustrative purposes, one could imagine a proposal that consisted of two provisions: a cost-reducing provision that would decrease the annual COLA by 0.5 percentage points and a revenue-increasing provision that would gradually increase the taxable maximum such that 90% of earnings would be subject to the payroll tax by 2035. This pair of provisions would eliminate about 49% of the projected financial imbalance.³⁸ Such an approach would delay the projected date of asset reserve depletion while providing for a higher percentage of payable benefits at the point of depletion.

Nature

Social Security legislation and reform could be initiated and developed in various ways. In most Congresses since the 1983 amendments, lawmakers have introduced Social Security solvency-related legislation that would eliminate or delay the projected financial shortfall. Unsurprisingly, given the size and impact of Social Security, solvency has also been the subject of numerous committee hearings in both chambers.

Solvency-related reform efforts have also been championed by presidents who established national commissions to address Social Security issues. Some commissions have focused solely on Social Security financing matters while others have focused on government-wide deficit reduction. The Social Security Amendments of 1983, the last major reforms to the program, were aided by the efforts of a presidential commission. However, as discussed below, Congress has not acted upon recommendations of a presidential commission since 1983.

Past Efforts to Eliminate the Shortfall

When evaluating the current prospects for congressional action on Social Security, people often look to the circumstances and events that led to the passage of the Social Security Amendments of 1983, which was the last time Congress made major changes to the program. It can be informative to understand the role of the 1981-1983 National Commission on Social Security Reform in the development of the 1983 amendments. Understanding the commission's efforts 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.

National Commission on Social Security Reform (Greenspan Commission)

In 1981, President Ronald Reagan established the National Commission on Social Security Reform (commonly referred to as the Greenspan Commission) by executive order. The formation of the 15-member commission was precipitated by concern over the Social Security program's short-term financing crisis, caused in large part by high inflation and lower than expected wages.³⁹ The 1982 Annual Report projected that in the absence of legislative changes the OASI trust fund would become insolvent by July 1983.⁴⁰

In January 1983, the Greenspan Commission submitted its report to the Administration and Congress on recommendations to improve the short- and long-range financial condition of Social Security.⁴¹ The commission's final recommendations followed the principle of balancing tax increases with benefit reductions. 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.⁴² 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; delay the annual 1983 COLA for six months;
• 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;⁴³
• 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;⁴⁴
• 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; and
• authorize interfund borrowing by the Social Security trust funds from the Medicare HI trust fund for 1983-1987.

The commission's full package of recommendations was estimated to address Social Security's projected short-term financing deficit as well as about two-thirds of its projected long-range actuarial deficit. However, the commission could not agree on recommendations to address the other one-third of the projected long-range actuarial deficit, deferring to lawmakers to come up with proposals to do so. After the commission released its final report, President Ronald Reagan and Speaker of the House Tip O'Neil—and other members of House and Senate leadership—endorsed the report.⁴⁵ All provisions suggested in the commission's final report were included in legislation that eventually became law.⁴⁶

The House-passed version of the bill included a provision to gradually increase the full retirement age from 65 to 67 (H.R. 1900, 98^th Congress).⁴⁷ The Senate-passed version of the bill, adopted long-term financing measures along the lines of the recommendations of the Greenspan Commission and included provisions to address the remaining long-range actuarial deficit by, among other things, gradually increasing the full retirement age from 65 to 66 beginning in 2015 and gradually reducing initial benefit levels by about 5% over the period 2000-2007 (S. 1, 98^th Congress).⁴⁸

In conference, the conferees agreed to the House provision to address the remaining projected long-range actuarial deficit solely by gradually raising the full retirement age by two years from 65 to 67. Other provisions that were not part of the commission's final report include: "fail-safe" financing mechanisms; provisions affecting dependents and survivors; and provisions with relatively small impacts 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.⁴⁹ Also included in the 1983 amendments were provisions to eliminate remaining gender-based distinctions and modify the Government Pension Offset, which reduced Social Security spousal and survivor benefits for people who also received pensions from non-covered employment.⁵⁰ With their inclusion in the 1983 amendments, Social Security program rules have been gender-neutral.

The 1983 legislation was seen as solving the short-term and medium-term financing issues that had pressured Social Security for the prior 10-year period. After the 1983 legislation, the program's projected cost and income rates were relatively close over the long-term. However, in the ensuing years the program has moved farther out of actuarial balance.

Bipartisan Commission on Entitlement and Tax Reform

The Bipartisan Commission on Entitlement and Tax Reform, a 32-member panel appointed by President Clinton, was asked to examine ways to constrain the growth of Federal entitlement programs and to reform the tax system.⁵³ Led by Senators Robert Kerrey and John Danforth, the panel was composed of 22 Members of Congress and 10 people from the public at large.⁵⁴ The Commission issued an interim report in August 1994 outlining major concerns about the future growth of entitlements. On December 9, 1994, the chairmen proposed a package of options to address the issue, including measures to: gradually raise the age for full Social Security benefits to 70, establish mandatory personal savings plans using part of the current payroll tax, means test Medicare and raise its premiums and deductib1es, alter congressional and civil service pensions, and other changes. The Commission held its final meeting on December 14, 1994, but was unable to reach a consensus on specific options. Instead, it agreed to advise the President and Congress that a 30-year planning perspective is needed in fiscal policymaking to fully recognize the financial demands of entitlement programs that will emerge from the aging of the baby boomers and that laws need to be changed today to balance future entitlement promises with available funds. The chairmen's proposals and those of other commission members accompanied the final report, issued in late January 1995.⁵⁵

President's Commission to Strengthen Social Security

In May 2001, President George W. Bush established the President's Commission to Strengthen Social Security.⁵⁶ The 16-member commission appointed by the President 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 which mandated the creation of personal retirement accounts.⁵⁷ On December 21, 2001, the Commission issued a final report—Strengthening Social Security and Creating Personal Wealth for All Americans—that included three alternative plans for reforming Social Security.⁵⁸ Under all three plans, workers could choose to invest in personal retirement accounts, and their traditional Social Security benefit would be reduced by some amount. The first plan would make no other changes to the program. The second plan would slow the growth of Social Security through one major provision that would index initial benefits to prices rather than wages. The third plan would slow future program growth through a variety of measures. To mitigate the effects of benefit reductions, the latter two plans would guarantee a minimum benefit and enhance benefits for widow(er)s. There was no congressional action on any of the three plans developed by the commission.

President's Commission on Fiscal Responsibility and Reform

In February 2010, President Barack Obama established the National Commission on Fiscal Responsibility and Reform.⁵⁹ 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 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.⁶⁰ The commission made a number of recommendations with respect to Social Security benefits and tax revenues. The Social Security recommendations included revenue-increasing and cost-reducing measures that would have: increased the progressivity of benefits, indexed the full retirement age to longevity, increased benefits for older beneficiaries, gradually increased the taxable maximum to cover 90% of earnings, decreased COLAs, covered newly hired state and local government workers, among other provisions. There was no congressional action on the Social Security component of the plan developed by the commission.