The Social Security Administration (SSA) operates the Old Age, Survivors, and Disability Insurance program, which is the largest federal program. The SSA also runs the Supplemental Security Income program. These programs are growing rapidly and they are financially unsustainable without major restructuring. A key goal of reforms should be for Americans to depend more on personal savings to fund their retirement years and periods of disability.
The Social Security Administration will spend $873 billion in fiscal 2013, which is about $7,400 for every household in the nation.
- Social Security Retirement. Social Security faces a huge financing gap because of its pay-as-you-go structure and the aging of the U.S. population. It should be transitioned to a system of personal savings accounts, which would increase individual financial security and help to avert future tax increases.
- Social Security Disability Insurance. Growing numbers of Americans are receiving Social Security disability benefits and the system is subject to major abuses. Policymakers should tighten eligibility and reduce benefit levels, while exploring ways to move disability insurance to the private sector.
- Supplemental Security Income. This program for low-income and disabled individuals suffers from similar abuses and overspending problems as Social Security Disability Insurance. The financing and administration of Supplemental Security Income should be devolved to the states.