Restructure Social Security: Policy Options From Report of the

Restructure Social Security: Policy Options From Report of the National Commission on Fiscal Responsibility and Reform Future Social Security Policy Options Deficit Reduction’ Gradually reduce future benefit payments to high earners while Le) increasing them for low earners by 2050 ae Gradually increase taxable maximum to 90% of covered earnings 35% by 2050 Apply refined inflation measure (chained-CPI) to cost-of-living 26% index ° Gradually increase retirement ages to 68 by 2050 / 69 by 2075 21% Other? -- Total Future Social Security Deficit Reduction 116%? Note: 1) As % of the estimated present value of Social Security trust fund cumulative deficit in future 75 years. 2) Other measures include boosting benefit to oldest old retirees and covering newly hired state and local workers after 2020. 3) total deficit reduction does not equal to the sum of individual reductions owing to policy interplay. Source: National Commission on Fiscal Responsibility and Reform, “The Moment of Truth: Report of the National Commission on KP Fiscal Responsibility and Reform,” 12/1/10. (@)E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 265 Restructure Social Security: Declining USA Household Savings Rate Creates Challenge to Reducing Benefits as Americans are Under-Saving, Thus Limiting Financial Cushion Personal Savings Rate, 1965 — 2009 Personal Savings Rate (%) BYo Nn I 3% A%, 2000s Average fp EEE ESSE a y= ss ms mom ome = sc ce em ee ee mo SR ea = Sn om = es oe mo oat ce ea me ces mo mea ol, Bison mem 2 0% [ T T T T T T T T T T T T T T T T T T T T 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 Note: Personal savings rate is calculated as the amount of savings divided by disposable income (income after taxes). P Source: BEA. (@E) www.kpcb.com USA Inc. | What Might a Turnaround Expert Consider? 266 HOUSE_OVERSIGHT_020974