Many, many commenters claim that Social Security can just be fixed by changing this or that with most progressives lining up via some version of 'Just Lift the Cap'. Well depending on what you mean by 'lift' and what level of benefits go with it you can make that work. And as an aid CBO scored 30 different policy options, including a variety of cap increase proposals, against an actuarial gap they scored at 0.6% of GDP. So that is the magic score, put together any combination of plus (revenue increases or benefit cuts) and minuses (benefit boosts for lower income recipients) that add up to 0.6 and 'Bob's Your Uncle'. Some notes below the fold, but the meat is right here. Bon appetit!
The full CBO document (linked) explores each of these 30 options at length, for an in depth education feel free to click through.
Some friends and I independently produced what we call the Northwest Plan for a Real Social Security Fix, which has gained some interest in DC policy circles and which you can Google for. We produced it before this Report was published but it turns out to be a blend between Options 2 and 3 and based on phased in FICA increases. We knew our numbers were solid but it was gratifying to get confirmation of the basic concept.
A small caveat. Some of these Options would interact, but mostly not enough to matter for the score. So if you want to mix a revenue enhancer that scores 0.9 and a low income subsidy that scores -0.3 you would have a plausible combo to solve the actuarial gap between scheduled and payable represented here.
A larger caveat. This is a 2010 Report and projections have changed some. Moreover CBO has a slightly different score than SSA which at this same time would have put the gap at 0.7 rather than 0.6. Still this is a useful corrective against certain Golden Bullet solutions, there are no fixes that allow a cap increase to offset a massive improvement in benefits for the working poor AND buy every kid a pony. On the other hand it just is not true that the only answer is to kick the olds and condemn them to die starving and freezing in the dark because 'unsustainable'. We just need to pick from the options and variations thereof.
And a final note. CBO did not score any attempt to extend FICA to 'unearned', i.e. capital income. Feel free to comment on that.