The plan, offered by Rep. Paul Ryan, R-Wis., would reduce benefits by gradually raising the retirement age and slowly trimming benefits for the top 70 percent of earners, The Washington Post reported Thursday.
Taken together, the provisions would cut initial benefits by about 25 percent for middle-income Americans who turn 65 in 2050, the analysis by Stephen Goss, the Social Security program's chief actuary indicated. Wealthier retirees would experience deeper cuts -- about a third of their scheduled benefits in 2050 and more than half of scheduled benefits if they turn 65 in 2080.
The report also looked at other ideas for reforming the program, including several ideas being discussed by the bipartisan deficit-reduction commission appointed by President Barack Obama. Allowing the retirement age to rise two months per year until it reaches age 70 would cut initial benefits by nearly 20 percent for anyone turning 65 in 2050, the analysis said. The commission also is discussing the possibility of trimming annual cost-of-living increases retirees receive, as well as cutting their initial benefits.
"There's been a lot of discussion about how easy it would be to cut Social Security in order to save it," said Rep. Earl Pomeroy, D-N.D., chairman of the House Ways and Means subcommittee on Social Security, who requested the report. "The new analysis reveals that these proposals result in benefits cuts ranging from 10 percent to as high as 50 percent. ... That's not what I'd call 'saving' Social Security."
Conor Sweeney, a spokesman for Ryan, said Goss did not analyze the full budget-balancing effect of Ryan's plan and ignored Ryan's proposal to guarantee a higher minimum benefit to low-income retirees.