When the cashless SS Trust Fund runs out of its special bonds, the options for Congress and the president will basically be the same as they were before. The only difference from before is the "do-nothing," or default option will change.
Those options are:
(1) Raise SS taxes.
(2) Raise other taxes.
(3) Borrow money from outside the government.
(4) Cut SS benefits, whether it is through the benefit formula, across-the-board cuts, or raising the retirement age, to name a few.
(5) Cut other government services.
Once SS stopped taking in more than it paid out off and on in the last 10 years, thereby adding to the budget deficit instead of decreasing it, Congress and the President have chosen #3. But once the SS Trust Fund becomes exhausted, the "do-nothing" option will be #4. This could easily morph back into #3 to maintain the status quo.
As to what my preferred options are, I'll suggest this:
(1) increase taxation of SS benefits but index the current tax brackets, as they have not been changed.
(2) Do not increase the wage cap without increasing benefits. Keep that link, even if somewhat tenuous, intact. Or better yet, don't touch either one beyond current indexing. I would prefer a general increase of the FICA tax rate.
(3) I would raise the (full) retirement age to not more than 68, phasing it like before, but not in a way which affects anyone previously affected by the 1983 change. That is, don't move the goalposts twice for those who already had them moved once.
When I was more active with the Concord Coalition back in the late 1990s and early 2000s, we had this game called "Just Generations." It was a game where small groups of participants would come to consensus as to how to solve the long-term budget deficit. One thing we were mindful of, and was scored in our menu of options, was how they affected younger people versus older ones. We tried to balance the pain out among the two age groups.
