Mandatory Spending
Function 650 - Social Security
Establish a Uniform Social Security Benefit
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
Billions of dollars | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2025– | 2025– | |
Change in outlays | |||||||||||||
Set Social Security benefits to 150 percent of the federal poverty guidelines | 0 | -1 | -4 | -8 | -14 | -22 | -34 | -50 | -65 | -85 | -27 | -283 | |
Set Social Security benefits to 125 percent of the federal poverty guidelines | 0 | -3 | -10 | -21 | -35 | -52 | -75 | -106 | -135 | -170 | -69 | -607 | |
This option would take effect in January 2026.
Estimates displayed in this table include budgetary effects for Social Security benefits; that spending is classified as off-budget.
Initial Social Security benefits for retired and disabled workers are based on their average lifetime earnings, which are adjusted for changes in economywide wages. A progressive formula is then applied to that average amount, which means that benefits replace a higher percentage of earnings for workers with lower earnings than for workers with higher earnings. However, benefits are still higher for workers with higher earnings than for workers with lower earnings.
For retired worker beneficiaries, initial benefits are also adjusted depending on the age at which a recipient chooses to start claiming them relative to the full retirement age (FRA). (The FRA varies by the year of birth of the worker and is 67 for workers who turn 62 in 2022 or later.) People who claim benefits before their FRA receive a smaller initial benefit, and people who claim after their FRA up to age 70 receive a larger initial benefit.
This option consists of two alternatives. Under both alternatives, Social Security benefits for all newly eligible beneficiaries at their FRA would be the same in any given year—an amount that would be determined relative to the federal poverty guidelines (commonly known as the federal poverty level, or FPL) for a single person. The FPL is adjusted annually using the consumer price index for all urban consumers (CPI-U).
Under the first alternative, the benefit amount would be same for all beneficiaries, set to 150 percent of the FPL, which would equal about $1,990 per month in calendar year 2026. In 2026, about one-third of newly eligible beneficiaries would receive higher benefits than under current law and about two-thirds would receive lower benefits. Under the second alternative, the uniform benefit amount would be set to 125 percent of the FPL, equaling about $1,660 per month in calendar year 2026. That year, about one-quarter of newly eligible beneficiaries would receive higher benefits and about three-quarters would receive lower benefits.
For both alternatives, eligibility criteria for Social Security benefits and adjustments to benefit levels for early and delayed claiming would remain unchanged from current law, and all retired and disabled workers would be eligible for the same dollar amount of benefit upon entitlement. Additionally, both alternatives would provide benefits to dependents and survivors as under current law.
For information about the long-term and distributional effects of this option, see the appendix.