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Last updated May 2005
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An introduction to Social Security
Social Security is one of America's most important and successful programs, providing over $471 billion in benefits to more than 47 million people in 2003. While Social Security is often considered simply a retirement program, about one-third of its beneficiaries are not retirees. The Social Security system provides three distinct types of benefits for workers and their families: lifetime retirement benefits for retirees who have worked at least ten years, their spouses, and their children; disability insurance for workers, their spouses, and their children; and survivors' insurance for the families of deceased workers. Social Security guarantees working and retired Americans and their families economic stability that keeps them out of poverty.
Social Security benefits are part of a social insurance program and its benefits are distinct from employer-provided pensions, Individual Retirement Accounts (IRAs), or other forms of savings. Retired workers are guaranteed an inflation-indexed payment for their entire lifetime. Other forms of saving have much more risk. For example, an employer pension program may go bankrupt, private investments face substantial risk if there is a market downturn, and workers' savings may run out. The disability insurance provided by Social Security protects workers and their families against a physical or mental disability that renders someone unable to work; the survivors' insurance provides benefits to the families of deceased workers.
The Bush Administration has been making alarming claims that the current Social Security program is "in crisis" and is unsustainable. These exaggerations simply are not true. Estimates by the Social Security trustees (using rather pessimistic assumptions) and the nonpartisan Congressional Budget Office (CBO) indicate that the trust fund is solvent for another 38 to 48 years if we do nothing. In other words, Social Security is not going broke anytime soon. Despite the fact that the Social Security trust fund is as robust today as it has been in recent years, the administration proposes to radically change the Social Security program by cutting benefits while at the same time allowing workers to create individual private accounts. While the exact provisions are not clear, any privatization proposal will not, in and of itself, do anything to ameliorate the shortfall projected in 2042 or 2052.
The administration has said that it considers Model 2 proposed by the President's Commission to Strengthen Social Security a "good blueprint" for reform. That proposal does not "fix" Social Security but instead imposes significant new costs on the existing program coupled with significant cuts in benefits. First, the government will have to borrow trillions of dollars to pay for "transitional" costs since fewer revenues will be available to pay for current beneficiaries. Second, the administration's plan will significantly cut Social Security benefits (even for those who choose not to create a private account)?with the exception of those who are at or near retirement today. For example, the CBO estimates that Model 2 would cut benefits under current law by 45% for average earners retiring in 2065. It is only through benefit cuts that the administration can pretend to address the shortfall that the Bush Administration's Social Security trustees predict when huge payroll tax revenues are diverted into private accounts. Many workers will be unable to make up these benefit cuts with their returns on their private accounts. And women, minorities, and low-income wage earners will be particularly hit by these changes. Finally, beneficiaries of the disability insurance and survivor portions of Social Security will have their benefits cut as well, with no way to close the gap.
The Bush Administration's privatization proposal will not "save" Social Security but will do just the opposite?it will erode a vital social insurance program that provides American workers and their families with a core level of income during retirement, disability, and early death.
General Information on Social Security
Social Security - facts at a glance
Frequently asked questions (FAQ) about Social Security
Frequently asked questions (FAQ) about Social Security Privatization
Key Tables and Charts
Key Publications
Key EPI Publications
Shifting risk: Workers today near retirement more vulnerable and with lower pensions
By Lee Price, July 2005 (Issue Brief)
Two Steps Back: African Americans and Latinos will lose ground under Social Security "reform"
By Ross Eisenbrey and William Spriggs, July 2005 (Issue Brief)
Looking in the wrong places: Why benefit cuts will not solve Social Security's financing problem
By William Spriggs and David Ratner, July 2005 (Economic Snapshot)
Social Security's cruelest cut: Bush's proposal slashes benefits for family members of workers who die before retirement
By William Spriggs and David Ratner, July 2005 (Issue Brief)
The DeMint plan to raid the Social Security trust fund
By Lee Price and David Ratner, July 2005 (Economic Snapshot)
Economic conditions affecting Social Security and the merits of pre-funding
By Lee Price, June 2005 (Congressional testimony, EPI Viewpoint)
Many already lack a steady job before the Social Security retirement age
By Elise Gould, June 2005 (Economic Snapshot)
Social Security price indexing proposal means benefit cuts for workers
By William E. Spriggs and David Ratner, June 2005 (Issue Brief)
Lifting cap on Social Security taxes would rescue retirement program
By Lawrence Mishel, May 2005 (EPI Viewpoint)
Growth in Social Security wealth outpaces all other sources
By Amy Chasanov, May 2005 (Economic Snapshot)
Productivity growth and Social Security's future
By William E. Spriggs and Lee Price, May 2005 (Issue Brief)
Social Security: Why put a critical middle-class program at risk?
By Lee Price, May 2005 (EPI Viewpoint)
President's proposal for deep cuts in middle-income Social Security benefits
By Amy Chasanov and Lee Price, May 2005 (Economic Snapshot)
Social Security's fixable financing issues: Shortfall in funds is not inevitable
By L. Josh Bivens, April 2005 (Issue Brief)
Coming soon to your mailbox: Government misinformation
By Amy Chasanov, March 2005 (EPI Viewpoint)
Social Security Income and the Elderly
By Michael Ettlinger and Jeff Chapman, March 2005 (Issue Brief)
Big deficit, little deficit: The Bush budget and Social Security
By Max B. Sawicky, March 2005 (Economic Snapshot)
Collision course: The Bush budget and Social Security
By Max B. Sawicky, March 2005 (Briefing Paper)
Implications of the Bush budget for people over 55
By Lee Price, March 2005 (Economic Snapshot)
Top earners get Social Security windfall, others get the bill
By William E. Spriggs, March 2005 (Economic Snapshot)
Bush plays down SSA benefits to widows, disabled
By William E. Spriggs, March 2005 (EPI Viewpoint)
Walkmans to iPods: Social Security is better equipped to provide family income protection
By William E. Spriggs, February 2005 (Economic Snapshot)
Removing earnings cap could fix Social Security shortfall
By L. Josh Bivens, February 2005 (Economic Snapshot)
Proposed Social Security price indexing would slash benefits
By Amy Chasanov, February 2005 (Economic Snapshot)
Social Security privatization's motherhood penalty
By William Spriggs, February 2005 (Economic Snapshot)
Privatization fix for Social Security is worse than doing nothing
By Josh Bivens, January 2005 (Economic Snapshot)
Proposal by the president's Social Security commission whittles away at income support
By Lee Price, January 2005 (Economic Snapshot)
Private accounts: The 'spicy sauce' to sell deep benefit cuts
By Lee Price, December 2004 (Economic Snapshot)
Social Security and income
By Josh Bivens, November 2004 (Economic Snapshot)
Related EPI Publications
Retirement Income: The Crucial Role of Social Security
By Christian Weller and Edward N. Wolff, May 2005 (EPI Book)
Health Insurance Coverage in Retirement: The Erosion of Retirement Income Security
By Christian Weller, Jeff Wenger, and Elise Gould, June 2004 (EPI book)
Retirement Made Riskier: House Pension Bill, Treasury Proposal ignore the real problems
By Sarah Harding and Christian Weller, April 2003 (Issue Brief #189)
Retirement Out Of Reach
by Christian Weller, August 2002 (Briefing Paper #129)
Retirement Insecurity: The Income Shortfalls Awaiting the Soon-to-Retire
by Edward N. Wolff, 2002 (EPI Book)
Shortchanging the next generation: Proposed Social Security cut would index benefits to 2006 living standards level, eroding retirement income for everyone thereafter
by Christian Weller, September 2001 (Issue Brief #162)
You're in good hands with Social Security: But privatization proposals would unravel its ability to insure against loss of income, disability, and death
by Christian Weller, July 2001 (Issue Brief #161)
The commission's straw man: Social Security well prepared for retirement of baby boomers in 2016
by Christian Weller, July 2001 (Issue Brief #159)
What the crash means for your retirement
by Christian Weller, May 2001 (Issue Brief #156)
Trust fund's rainy day postponed, again
by Edith Rasell and Christian E. Weller, March 2001 (Issue Brief #152)
The Problems With Privatization
Economic Policy Institute, December 2000 (Social Security Policy Brief)
Social Security and Women
Economic Policy Institute, December 2000 (Social Security Policy Brief)
Social Security: Options for Reform
Economic Policy Institute, December 2000 (Social Security Policy Brief)
Raising the Retirement Age: The wrong direction for Social Security
by Christian Weller, September 2000 (Briefing Paper #98)
The Perils of Privatization: Bush's lethal plan for Social Security
by Edith Rasell and Christian Weller, May 2000 (Issue Brief #145)
Getting better all the time: Social Security's ever-improving future
by Christian Weller and Edith Rasell, March 2000 (Issue Brief #140)
Fixing Social Security: The Clinton plan and its alternatives
by Edith Rasell and Jeff Faux, April 1999 (Briefing Paper #82)
Social Security Isn't Broken: So why does Wall Street want to fix it?
EPI Paycheck Economics 1998
The Feldstein-Samwick 'Two Percent Solution': New Social Security Proposal Is Both Inadequate and Risky
by Edith Rasell, November 1998 (Issue Brief #128)
Saving Social Security in Three Steps
by Dean Baker, 1998 (Briefing Paper #79)
Defusing the Baby Boomer Time Bomb: Projections of Income in the 21st Century
by Dean Baker, 1998 (study)
America's Golden Years Ensuring Prosperity in an Aging Society
by Edith Rasell, Max Sawicky, and Dean Baker, 1998 (Issue Brief #125)
The Distributional Effects of Raising the Social Security Retirement Age and Partially Indexing Benefits
by Edward Wolff and Howard Chernick, 1996 (Working Paper #115)
Privatizing Social Security: The Wall Street Fix
by Dean Baker, 1996 (Issue Brief #112)
Robbing the Cradle? A Critical Assessment of Generational Accounting
by Dean Baker, 1995 (study)
Links To Other Organizations
AFL-CIO
American Academy of Actuaries
American Association of Retired Persons and its Research Center
Boston College, Center for Retirement Research
Brookings Institute
Campaign for America's Future
Center on Budget and Policy Priorities
Center for American Progress
Center for Economic and Policy Research
The Century Foundation and its Social Security Network
Congressional Budget Office
Economic Analysis and Research Network
Economic Opportunity Institute (Washington State)
Employee Benefits Research Institute
Institute for Women's Policy Research
Moving Ideas
National Academy of Social Insurance
National Committee to Preserve Social Security and Medicare
Social Security Administration
The Urban Institute
Research by Other Organizations
Why progressive price indexing could lead to the unraveling of Social Security 
B Jason Furman, Robert Greenstein, and Gene Sperling, CBPP, April 2005
Pulling a Fast One? The Facts about Social Security
By William E. Spriggs, NAACP Crisis, March/April 2005
Children Get Social Security, Too
by William E. Spriggs, Poverty & Race, March/April 2005
Social Security Accurate Benefit Calculator
Center for Economic and Policy Research (CEPR)
Estimated Social Security benefit levels under President Bush's 2005 individual accounts proposal combined with a proposal to price-index Social Security benefits
Congressional Research Service, March 31, 2005
The life-cycle personal accounts proposal for Social Security: An evaluation
Robert Shiller, March 2005
An analysis of using "progressive price indexing" to set Social Security benefits
Jason Furman of CBPP, March 2005
Defaulting on the Social Security Trust Fund: What It Would Mean, and How It Would Be Done
Dean Baker of CEPR, March 9, 2005
An overview of issues raised by the administration's social security plan
Jason Furman and Bob Greenstein, CBPP, February 7, 2005
Empty promise: The benefit to African American men of private accounts under President Bush's Social Security plan
Dean Baker, CEPR, February 2005
Options to balance Social Security funds over the next 75 years
Virginia Reno and Joni Lavery, National Academy of Social Insurance, February 2005
Estimated OASDI long-range financial effects of several provisions requested by the Social Security Advisory Board-information
Memo from Chris Chaplain and Alice Wade to Stephen Goss, Social Security Administration, February 7, 2005
Thoughts on Social Security Reform
William Dudley, Jan Hatzius, and Edward McKelvey,Goldman Sachs Global Economics Paper No. 120, January 18, 2005
New Details From The President Tonight On Private Accounts Not Likely To Answer Key Questions
Jason Furman, CBPP, February 2005
New Details Indicate Administration Social Security Plan Would Entail Several Trillion Dollars In Borrowing
Jason Furman and Robert Greenstein, CBPP, February 2005
The Administrations Misleading $600 Billion Estimate Of The Cost Of Waiting To Act On Social Security
David Kamin and Richard Kogan, CBPP, February 2005
Social Security, Women, Children and the States
National Women's Law Center, February 2005
President tries to have it both ways: Using misleading numbers about a crisis while advancing a plan that would make matters worse
By Jason Furman, CBPP, February 2005
How the individual accounts in the president's new plan would work
By Jason Furman, CBPP, February 2005
New details indicate administration Social Security plan would entail several trillon dollars in borrowing
By Jason Furman and Robert Greenstein, CBPP, February 2005
Uncharted Waters: Paying Benefits from Individual Accounts in Federal Retirement Policy
Study Panel Final Report, National Academy of Social Insurance, January 2005
Bush's Numbers Racket in The American Prospect
Dean Baker, CEPR, January 2005
A Bloody Mess in The American Prospect
Norma Cohen, January 2005
Yikes! How to Think About Risk?,
Alicia Munnell, Steven Sass and Maurico Soto, January 2005
Does Social Security Face a Crisis in 2018?,
Jason Furman, CBPP, January 2005
President Portrays Social Security Shortfall as Enormous, but His Tax Cuts and Drug Benefit Will Cost at Least Five Times as Much
Richard Kogan and Robert Greenstein, CBPP, January 2005
Confusions about Social Security in The Economists' Voice
Paul Krugman, January 2005
The Social Security Privatization Crisis: Assessing the Impact on African American Families
Maya Rockeymoore of Congressional Black Caucus Foundation, January 2005
So-Called "Price Indexing" Proposal Would Result In Deep Reductions Over Time In Social Security Benefits
By Robert Greenstein, December 2004
Would Borrowing $2 Trillion For Individual Accounts Eliminate $10 Trillion In Social Security Liabilities?
By Jason Furman, William Gale, and Peter Orzsag, December 2004
Should the Budget Rules Be Changed So That Large-Scale Borrowing to Fund Individual Accounts Is Left Out of the Budget?
By Jason Furman, William G. Gale, and Peter R. Orszag, December 2004
Should the Budget Be Changed to Exclude the Cost of Individual Accounts?
By Jason Furman, William G. Gale, and Peter R. Orszag, December 2004
Twelve Reasons Why Privatizing Social Security is a Bad Idea
By Greg Anrig Jr. and Bernard Wasow, December 2004
A Bird's Eye View of the Social Security Debate
By Alicia H. Munnell, December 2004
African Americans and Social Security: Why the Privatization Advocates are Wrong
William Spriggs, November/December 2004
Scare Tactics: Why Social Security Is Not in Crisis
By Bernard Wasow, November 2004
Basic Facts on Social Security and Proposed Benefit Cuts/Privatization
By Dean Baker and David Rosnick, November 2004
Let Us Count the Ways: The Costs of Social Security Privatization are in the Details
By Christian Weller and Jeffrey Wenger, November 2004
Social Security scare campaign
By James K. Gailbraith, August 2004
Social Security: The Largest Source of Income for Both Women and Men in Retirement
Heidi Hartmann and Sunhwa Lee of the Institute for Women's Policy Research (IWPR), April 2003
Gender and Economic in Retirement
Sunhwa Lee and Lois Shaw, IWPR, 2003
The Effect of Using Price Indexation Instead of Wage Indexation in Calculating the Initial Social Security Benefit
By Alison Shelton, Laurel Beedon, and Mitja Ng- Baumhackl, July 2002
The Effect of Using Price Indexation Instead of Wage Indexation in Calculating The Initial Social Security Benefit
Alison Shelton, Laurel Beedon, and Mitja Ng- Baumhackl of AARP, July 2002
Defined Contributions from Workers, Guaranteed Benefits for Bankers: The World Bank's Approach to Social Security Reform
Dean Baker and Debayani Kar, CEPR, July 2002
Reducing Benefits and Subsidizing Individual Accounts,
Peter Diamond and Peter Orszag, June 2002
Reducing Benefits and Subsidizing Individual Accounts: An Analysis of the Plans Proposed by the President's Commission to Strengthen Social Security
By Peter Diamond and Peter Orszag, June 2002
Setting the Record Straight, The Most to Lose: Women and Social Security
Bernard Waslow, April 2002
What Would Really Happen Under Social Security Privatization?
By Greg Anrig Jr. and Bernard Wasow, December 2001
Social Security Helps Reduce Child Poverty
Valerie Rawlston and William Spriggs, 2000
Why Privatizing Social Security Would Hurt Women
Catherine Hill, IWPR, March 2000
Social Security: The Phony Crisis
By Dean Baker and Mark Weisbrot, 1999
Government Research & Resources
Memo to Senate Finance Committee re: Estimated Effect of Price-Indexing Social Security Benefits on the Number of Americans 65 and Older in Poverty
Congressional Research Service, January 2005
Updated Long-term Projections for Social Security
Congressional Budget Office, January 2005
How Pension Financing Affects Returns to Different Generations
Congressional Budget Office, September 2004
Administrative Costs of Private Accounts in Social Security
Congressional Budget Office, March 2004
2004 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds
Social Security Trustees, March 2004
Annual Statistical Supplement, 2003
Social Security Administration, July 2004
Long-Term Analysis of Plan 2 of the President's Commission to Strengthen Social Security
Congressional Budget Office, July 2004
The Outlook for Social Security
Congressional Budget Office, June 2004
Fast Facts & Figures About Social Security
Social Security Administration, 2003
State Statistics, December 2002
Social Security Administration, December 2003
Strengthening Social Security and Creating Personal Wealth for All Americans
The Report of the Presidents Commission, December 2001
Social Security: A Primer
Congressional Budget Office, September 2001
Social Security Privatization: Experiences Abroad
Congressional Budget Office, January 1999
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