A Bipartisan Policy Framework to Prevent Social Security Cuts

In February 2025, Wendell Primus, Tara Watson, and Jack A. Smalligan published a Blueprint for restoring Social Security solvency to avoid the 24% cut in benefits that could occur when Social Security is expected to deplete its trust funds in 2032. Since the Blueprint was published, the size of the problem—the difference between projected incomes and costs, known as the actuarial balance—has grown bigger, largely because of legislation passed by Congress. This policy brief shows that by adjusting a few policies in the original Blueprint, solvency over 75 years can be restored even with assumptions more pessimistic than the Social Security actuary’s intermediate projection. Ultimately, Congress needs to make policy changes to stabilize Social Security’s finances. The Blueprint was crafted to demonstrate that there is a way to fix Social Security that could be acceptable to both Democrats and Republicans, but is not, of course, the only set of policies that can achieve that goal.

Deteriorating Actuarial Projections

The 2024 Social Security Trustees Report estimated the 75-year actuarial deficit of the Old-Age, Survivors, and Disability Insurance (OASDI) program to be 3.5% of taxable payroll. With the passage of the Social Security Fairness Act in early 2025, the actuarial deficit increased by 0.14 percentage points to an imbalance of 3.64% of taxable payroll. The 2025 Trustee’s Report estimates the 75-year OASDI actuarial deficit to be 3.82% of taxable payroll. The Social Security Administration (SSA) estimates that the passage of the One Big Beautiful Bill Act (OBBBA) will further increase the deficit by 0.16 percentage points for a total deficit of 3.98% of taxable payroll.

Alternative Assumptions to Prevent Social Security Cuts

Any projection that extends 75 years into the future depends upon making different assumptions about many variables: the fertility rate, the immigration rate, the interest rate, GDP growth, and more. The SSA actuaries have modeled the finances of Social Security for many years with great success and accuracy. However, there are two variables that many analysts question: the fertility rate and immigration. (Lower fertility rates and lower levels of immigration make the Social Security actuarial shortfall worse because there are fewer taxpaying workers.) For example, Warshawsky argues that the 2025 Trustee model may underestimate the true actuarial shortfall by assuming that the fertility rate will rebound from its current level of 1.6 births per woman to 1.9, instead of remaining at the lower rate. The Congressional Budget Office (CBO) also assumes the lower fertility rate persists. SSA actuaries assume immigration will be around 2 million people this year, while the evidence suggests that immigration this year could be close to zero or slightly negative.