[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                          THE SOCIAL SECURITY
                     TRUST FUNDS IN 2024 AND BEYOND

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 OF THE

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 4, 2024

                               __________

                          Serial No. 118-SS08

                               __________

         Printed for the use of the Committee on Ways and Means
         
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                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
57-014                  WASHINGTON : 2024                    
          
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                      COMMITTEE ON WAYS AND MEANS

                    JASON SMITH, Missouri, Chairman
                    
VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
DREW FERGUSON, Georgia               LINDA SANCHEZ, California
RON ESTES, Kansas                    TERRI SEWELL, Alabama
LLOYD SMUCKER, Pennsylvania          SUZAN DelBENE, Washington
KEVIN HERN, Oklahoma                 JUDY CHU, California
CAROL MILLER, West Virginia          GWEN MOORE, Wisconsin
GREG MURPHY, North Carolina          DAN KILDEE, Michigan
DAVID KUSTOFF, Tennessee             DON BEYER, Virginia
BRIAN FITZPATRICK, Pennsylvania      DWIGHT EVANS, Pennsylvania
GREG STEUBE, Florida                 BRAD SCHNEIDER, Illinois
CLAUDIA TENNEY, New York             JIMMY PANETTA, California
MICHELLE FISCHBACH, Minnesota        JIMMY GOMEZ, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio

                       Mark Roman, Staff Director
                 Brandon Casey, Minority Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON SOCIAL SECURITY

                    DREW FERGUSON, Georgia, Chairman
MIKE CAREY, Ohio                     JOHN LARSON, Connecticut
DAVID SCHWEIKERT, Arizona            BILL PASCRELL, New Jersey
RON ESTES, Kansas                    LINDA SANCHEZ, California
BLAKE MOORE, Utah                    DAN KILDEE, Michigan
RANDY FEENSTRA, Iowa                 GWEN MOORE, Wisconsin
GREG STEUBE, Florida
DAVID KUSTOFF, Tennessee
                         
                         C  O  N  T  E  N  T  S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Drew Ferguson, Georgia, Chairman............................     1
Hon. John Larson, Connecticut, Ranking Member....................     2
Advisory of June 4, 2024 announcing the hearing..................     V

                               WITNESSES

Stephen Goss, Chief Actuary, Social Security Administration......     3
Dr. Phillip Swagel, Director, Congressional Budget Office........    16
Barry Huston, Analyst of Social Policy, Congressional Research 
  Service........................................................    25

                    MEMBER QUESTIONS FOR THE RECORD

Member Questions for the Record and Responses from Stephen Goss, 
  Chief Actuary, Social Security Administration..................    69
Member Questions for the Record and Responses from Dr. Phillip 
  Swagel, Director, Congressional Budget Office..................    73
Member Questions for the Record and Responses from Barry Huston, 
  Analyst of Social Policy, Congressional Research Service.......    79

                   PUBLIC SUBMISSIONS FOR THE RECORD

Public Submissions...............................................    85

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                    THE SOCIAL SECURITY TRUST FUNDS
                           IN 2024 AND BEYOND

                              ----------                              


                         TUESDAY, JUNE 4, 2024

                  House of Representatives,
                   Subcommittee on Social Security,
                               Committee on Ways and Means,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 11:19 a.m., in 
Room 1100, Longworth House Office Building, Hon. Drew Ferguson 
[chairman of the subcommittee] presiding.
    Chairman FERGUSON. Good morning, everyone. We will call the 
subcommittee hearing to order.
    I want to thank each of you for being here today. And I 
especially want to thank our witnesses for being here today. We 
look forward to hearing from you.
    Last month, the Social Security Board of Trustees released 
its annual report on the fiscal status of Social Security 
programs, and it came as more unwelcome news for American 
seniors and workers. Like, last year, both the trustees and the 
Congressional Budget Office project Social Security's 
retirement and survivors' program will be unable to pay full 
benefits in less than a decade. What that means to the American 
people and those seniors that are near retirement or will be in 
retirement is that it could produce a benefit cut of somewhere 
between 21 and 25 percent. And the difference is that now it is 
a year later, and we are much closer to the insolvency.
    As we will hear today, the longer the wait, the harder it 
is going to be to solve. It is clear that Social Security's 
cost growth is unsustainable. Program costs average 4.5 percent 
of GDP from 1994 to 2023, and are projected to grow rapidly to 
nearly six percent of GDP by 2034 as baby boomers continue to 
reach retirement age.
    Simply put, more people are and will be collecting Social 
Security for longer periods of time. And we are looking at a 
situation where we have fewer workers. And this trend is 
projected to continue for decades.
    To add insult to injury, President Biden's recent budget 
does nothing to address the pending exhaustion of the trust 
fund. And to make matters worse, the accumulative effect is 
that it actually hurts Social Security's funding stream by 
billions of dollars over the next decade. On top of that, the 
Social Security Administration has done everything it can to 
push out rules and other policy changes that will result in 
tens of billions of dollars of new and unpaid for program costs 
that will only accelerate the trust fund exhaustion.
    Social Security is a vitally important part of every single 
American's life and retirement, so it is important that we 
don't downplay how bad the situation really is. To tell the 
American people that the most recent trustees report is good 
news because projections push back insolvency by a few months 
is misleading and simply misses the point. These programs are 
in dire trouble, and sugarcoating the problem instead of 
seeking bipartisan solutions only puts seniors and workers at 
greater risk.
    The American people rightfully expect and deserve that we 
find a way to work together to save and strengthen this 
program. This starts here with an honest assessment of the 
program's finances and a sincere discussion of the size of the 
problem we need to solve. And I invite my colleagues here today 
to join in that discussion and have a very robust debate on 
what we need to do moving forward.
    I would now like to yield to the ranking member, Mr. 
Larson, for his opening statement.
    Mr. Larson, you are now recognized.
    Mr. LARSON. Thank you, Mr. Chairman. And thank you for your 
remarks.
    And I want to thank our panelists. It is not often that we 
get the Walter Cronkite of actuaries that is here. So, I am 
pleased that we are going to hear straightforward talk.
    But let's cut to the chase. Congress has not done its job 
in over 50 years. We have not enhanced this program so that 
your constituents are better served. On average, every single 
one of our districts receives more than $200 million monthly to 
people that are on Social Security. It is arguably probably the 
best economic development plan that we have. And where do they 
spend that money? They spend it right back in the district.
    I can't help but get upset when you think about the fact 
that 10,000 baby boomers a day become eligible for Social 
Security. And they look and say, well, what has happened? Why 
hasn't Congress acted?
    We have a proposal that is out there. What Congress needs 
to do is something the public expects from us: vote. You got a 
plan. We have a plan. We are happy to put our plan up for a 
vote. What is yours? What we hear is $1.5 trillion in cuts to 
Social Security? That is your idea of saving Social Security? 
Raising the age of Social Security recipients. The American 
public knows for every year you raise the age, that is a 7 
percent cut in benefits.
    So, the opening remarks of the chairman is that we are in 
dire straits. We will see 20 percent-plus cuts by 2033 if 
Congress does nothing. So, your proposal is, well, let's do 
something. Let's make those cuts now by raising the age and 
cutting it 21 percent upfront.
    It is long overdue to stop all of the dialogue and how 
about vote. How about put out your plan. Do what the people 
have asked us to do. Everybody agrees that there is a crisis, 
that there is a need here.
    So, what did we get elected to do? I don't know how people 
go home and look themselves in the mirror and understand that 
there is 5 million of your fellow Americans that get below 
poverty level checks from Social Security. More than 70 million 
people--or close to 70 million people now who rely on Social 
Security, 40 percent of them, it is the only benefit they have. 
And you, Congress, with the responsibility of changing that, do 
nothing. You don't vote. That is what we need more than 
anything else.
    Aside from laying out the numbers and getting the news, 
good and bad, then the question is, how do you solve the 
problem? Cutting Social Security doesn't solve the problem. It 
exacerbates it.
    You mean to tell me that things haven't changed in 53 
years? Not having a COLA that works. Having 5 million-plus 
people who have paid into a system get below poverty level 
checks. What do you have against giving 23 million Americans a 
tax cut? These are the hard workers. You guys are going to work 
overtime to make sure that millionaires and billionaires get 
their tax cut. But the average working person, 23 million 
Americans that will get a tax cut, if this Congress were to 
act, you don't care about.
    So, whether it is a tax cut, whether it is getting benefits 
to the point where they are livable for people, and making sure 
that no one can retire into poverty, and repealing WEP and GPO 
and paying for it.
    Thank God for President Biden saying, hey, let's pay for 
this. Let's have people who pay nothing or next to nothing, 
millionaires and billionaires, just pay their fair share of 
what the guy making 50 or 30,000 a year has to pay all year 
long. You know what that does? It both allows us to extend the 
benefits and also allows us to extend the solvency.
    The choice is yours. If you got a better idea, put it out 
there. But it seems like the only idea is to cut Social 
Security by $1.5 trillion and to cut people's benefits by 
raising the age 21 percent across the board.
    I yield back.
    Chairman FERGUSON. Thank you.
    I now have the pleasure of introducing our witnesses for 
the day. Stephen Goss is the chief actuary at the Social 
Security Administration. Dr. Phillip Swagel is the director of 
the Congressional Budget Office. And Barry Huston is an analyst 
of Social Security policy at the Congressional Research 
Service.
    Thank you all, once again, for being here. I look forward 
to hearing your remarks. You will have 5 minutes to deliver the 
oral remarks.
    Mr. Goss, you are now recognized.

           STATEMENT OF STEPHEN GOSS, CHIEF ACTUARY,
                 SOCIAL SECURITY ADMINISTRATION

    Mr. GOSS. Thank you very much, Chairman Ferguson, Ranking 
Member Larson, members of the committee. Thank you for the 
opportunity to come and talk to you today about Social 
Security's program past, present, and future.
    Social Security started paying monthly benefits, as you all 
well know, to qualifying retired workers and family members and 
survivors in 1940. Benefits to disabled workers and their 
families started in 1957. Over the 85 years through 2024, all 
scheduled benefits had been paid in full and on time. Social 
Security provides this fundamental insurance against loss of 
earned income due to old age, disability, and death, for nearly 
all current and past workers and their families.
    Today, over 67 million people receive monthly benefits from 
the OASDI program, nearly 20 percent of the population, at a 
cost of 5.2 percent of GDP. By 2060, OASDI program cost is 
projected to rise to a stable, roughly, 6.1 percent of GDP, 
with over 23 percent of the population then expected to be 
receiving monthly benefits. But currently scheduled tax income 
remains at only 4.6 percent of GDP. So we have a shortfall to 
deal with. Over the 75 years as a whole, the unfunded 
obligation, the shortfall that we have over the period of the 
next 75 years, is 1.2 percent of GDP. We need to get these 
things back in balance.
    At the start of 2024, reserves in the combined OASI and DI 
trust funds total $2.8 trillion, nearly double the amount of 
annual payments. So our contingency reserve fund is strong at 
the moment. However, revenues to the combined OASI and DI trust 
funds are projected to be less than program costs in 2024, as 
they have been since 2010, in future years under the 
intermediate projections to the 2024 Trustees Report. So 
combined OASI and DI reserves would become depleted in June of 
2035. That is 13 months later than projected in the last year's 
report but is still on the horizon. At that time, 83 percent of 
the scheduled benefits would still be payable.
    For the OASI Trust Fund alone, which is a separate legal 
entity, it is projected to become depleted in its reserves in 
November of 2033, 7 months later than last year's report. 
Again, an incremental change with 79 percent of scheduled 
benefits then payable from that fund alone. The DI Trust Fund 
is in good shape and not projecting to have issues under the 
current projections through 2100 and beyond.
    Now, improvement in the 2024 Trustees Report is due to 
better than expected economic growth in 2023, a very good 
thing, and recognition of continued high-labor productivity and 
employment levels through 2023, and expected to go on for the 
future. In addition, lower disability incidents and prevalence 
rates have continued. We do have a rise in issues with the 
birth rate to be dealt with, obviously.
    Our projected annual shortfall for income to cover program 
costs should come as no surprise. The trustees have projected 
combined OASDI Trust Fund reserve depletion will occur between 
2033 and 2035 for the last 13 years' reports, and between 2029 
and 2042 for the last 34 Trustees Reports.
    The fundamental challenge of the changing age distribution 
at the adult population due to reduction in birth rates after 
1965 was well known even in 1983, at the time of the last major 
amendments for this program. The 1983 amendments intended to 
accumulate substantial trust fund reserves, making full payment 
of scheduled benefits possible for decades to come. But these 
amendments were understood at that time not to be a permanent 
solution.
    Prior to the 1983 amendments, income was expected to cover 
only 93 percent of program costs for the year 1983, declining 
to 78 percent of scheduled costs for 2025. After the enactment 
of the 1983 amendments, tax income was projected to exceed 
program costs through 2020, but to cover only 93 percent of 
scheduled benefits for 2025, a year yet to come, declining to 
86.5 percent by 2035, with trust fund reserves becoming 
depleted not until 2063 under those projections.
    However, annual tax income fell short of expectations after 
1983, and fell below annual program costs, starting in 2010 for 
two big reasons that had not been anticipated back in 1983. 
First, the share of covered earnings subject to the payroll tax 
declined from 90 percent in 1983, which is expected to persist, 
to just 82.5 percent over the next 17 years by the year 2000. 
Because average earnings grew much, much greater by 62 percent 
more than inflation for the highest 6 percent of earners 
between 1983 and 2000, where the average wage grew by only 17 
percent for the other 94 percent of workers across that period.
    Second, the deep recession of 2007 to 2009, with only a 
very gradual 10-year recovery reduced employment earnings for a 
decade of costing us not to have the buildup of reserves that 
was expected. As a result, trust fund reserves did not 
accumulate to what was expected in 1983. And our scheduled cost 
at this point is projected to cover--our revenues to cover only 
about 86 percent of scheduled cost in 2025, declining to 84 
percent by 2035.
    The combined OASDI reserves are now projected to become 
depleted in 2035, almost 30 years earlier than 1983 for the two 
reasons already mentioned.
    Chairman FERGUSON. Mr. Goss, we have allowed you a little 
latitude to go over by about a minute. And if we could, I am 
going to get you to yield, try to keep everybody on the 5-
minute clock. And I am sure we can get into more of this really 
important information through member questions.
    [The statement of Mr. Goss follows:]
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    Chairman FERGUSON. With that, Dr. Swagel, I am going to 
call on you for your 5 minutes.

STATEMENT OF DR. PHILLIP SWAGEL, DIRECTOR, CONGRESSIONAL BUDGET 
                             OFFICE

    Mr. SWAGEL. Very good. Thank you.
    Chairman Ferguson, Ranking Member Larson, and members of 
the subcommittee, thank you for inviting me to testify about 
Social Security.
    Social Security faces a significant financial challenge. 
Under current law, in our projections, the Old Age and 
Survivors Insurance Trust Fund is exhausted in fiscal year 
2033, and the Disability Insurance Trust Fund is exhausted in 
2061. If the two trust funds were combined, they would be 
exhausted in fiscal year 2034.
    After the trust funds are exhausted, we project that the 
resources to pay benefits in 2035 would be 21 percent less than 
the amount of scheduled benefits. And that shortfall would 
increase over time.
    In CBO's projections, about 82 million people, that is 
roughly one-fifth of the U.S. population, receive Social 
Security benefits in 2035. That is a projection. If all Social 
Security benefits were reduced by the same percentage in that 
year, lower income households would reduce their spending by 
more and increase the amount they work by more in percentage 
terms than households with higher lifetime incomes. Legislative 
action would be needed to avoid this scenario.
    The imbalance between the systems' revenues and scheduled 
benefit payments extends beyond 2034, and that imbalance grows 
over time. We project that the actuarial deficit over the next 
75 years equals 1.5 percent of GDP or 4.4 percent of taxable 
payroll. So, that is, scheduled benefits could be paid over 75 
years through 2098, if payroll tax rates were increased by 4.4 
percentage points right away, from 12.4 percent to 16.8 
percent, and that is an increase of 35 percent. That is a 35 
percent tax hike.
    Alternatively, a reduction in scheduled benefits of 24 
percent would permit full payment of those smaller benefits 
through 2098. And, of course, a combination of changes to taxes 
and benefits or relying on resources from the Treasury's 
general fund could also suffice. And policymakers, you and your 
colleagues, can have different changes apply to people of 
different incomes and people of different ages. Additional 
changes would be needed to ensure solvency beyond 2098.
    The aging of the population is a key factor affecting the 
finances of Social Security. The number of people age 65 or 
older who are less likely to work and pay payroll taxes and are 
generally eligible for Social Security benefits is projected to 
grow faster than the number of people age 25 to 54 who are more 
likely to work and to pay payroll taxes.
    Population growth is determined by births, deaths, and net 
immigration. Fertility in our projection remains lower than 
replacement. We project life expectancy will continue to 
increase. And immigration is now an increasingly important part 
of the growth of the U.S. population and the U.S. labor force. 
And all of these demographic changes affect the financial 
status of Social Security.
    A feature of CBO's work is that the demographic and 
economic projections used in our Social Security analysis are 
consistent with those used in CBO's baseline projections and 
for other purposes.
    In closing, let me note that any projection over a horizon 
of seven decades is inherently uncertain, but it is clear that 
action is needed to make Social Security financially 
sustainable.
    Thank you very much. I am happy to answer questions.
    [The statement of Mr. Swagel follows:]
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    Chairman FERGUSON. Thank you, Dr. Swagel.
    Mr. Huston, it is now time for your 5 minutes.

     STATEMENT OF BARRY HUSTON, ANALYST OF SOCIAL POLICY, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. HUSTON. Chairman Ferguson, Ranking Member Larson, and 
members of the subcommittee, thank you for inviting me to 
testify. My name is Barry Huston, and I am an analyst with the 
Congressional Research Service.
    Today's Social Security is different from the one that was 
enacted in 1935. The program matured from one that covered 
about half of workers and paid benefits only to retired 
workers, to one that covers almost all workers and pays 
benefits to retired and disabled workers and their eligible 
family members.
    This year, Social Security will pay benefits to over 67 
million beneficiaries, and about 182 million workers will work 
in covered employment. Most of these workers will become future 
beneficiaries.
    The program's ability to pay benefits to current and future 
beneficiaries is determined by its revenues, costs, and its 
trust funds. Current and projected imbalances between these 
elements indicate the program will not be able to pay the full 
amounts of scheduled benefits in about 11 years.
    The largest source of revenue is payroll taxes, about 91 
percent of revenues in 2023. The tax, evenly split between 
employees and employers, is levied on covered earnings up to an 
annual limit. This annual limit generally rises with wage 
growth in the economy. As average wages are projected to 
increase along with the number of covered workers, so too are 
projected revenues from payroll taxes.
    The second source of revenue is income from the taxation of 
Social Security benefits, about 4 percent of revenues in 2023. 
About half of beneficiaries pay Federal income tax on a portion 
of their benefits. The thresholds used to determine tax 
liability are fixed in law and not indexed. For this reason, 
among others, projected revenue from the taxation of benefits 
is expected to increase.
    In previous years, tax revenues exceeded the amounts needed 
to pay benefits. Under law, the trust funds hold excess 
revenues in interest-bearing government securities. And in 
2023, interest income on these asset reserves accounted for 
about 5 percent of revenues. However, with costs now exceeding 
revenues and increasing amounts of asset reserves projected to 
be redeemed to help pay benefits, this revenue source is 
projected to decrease and will approach zero as the asset 
reserves are depleted.
    In 2023, monthly benefits accounted for 99 percent of 
costs. Costs are expected to increase for several reasons, such 
as increasing average initial benefits and increasing number of 
beneficiaries and increasing beneficiary longevity.
    Although the benefit computation process is the same for 
all workers, average initial benefits generally increase for 
successive birth cohorts since the process index is for wage 
growth, which is typically positive. The process results in 
stable replacement rates across birth cohorts; that is, initial 
benefit levels as a percentage of career preretirement earnings 
are consistent across cohorts. It also results in 
progressivity. Workers with relatively lower career average 
earnings experience a relatively higher replacement rate.
    In the years to come, an increasing number of covered 
workers will become beneficiaries. As we are meeting life 
expectancy, as older ages continues to increase, they are 
expected to remain in current payment status for longer periods 
of time, on average. For these reasons, in addition to other 
factors, such as cost of living adjustments, costs are 
projected to increase.
    The program's revenue and costs are expected to increase in 
aggregate nominal dollars. Comparing the projected income and 
cost rates reveal that, for several decades, costs are 
projected to increase relative to revenues. This imbalance 
impacts the program's ability to pay full scheduled benefits.
    Since 2021, the program has relied on asset reserves to 
help pay scheduled benefits, and can continue to do so for 
about 11 more years. Once asset reserves are depleted, 
continuing revenues are projected to cover about three-fourths 
of scheduled benefits.
    Lawmakers may choose from a wide range of revenue 
increasing or cost-reducing provisions to help eliminate this 
imbalance. The Social Security amendments of 1983, generally 
considered the program's last major reform, use both types of 
revisions, among others.
    Depending on what provisions may be included in future 
legislation, changes may affect groups of workers and 
beneficiaries in different ways. Changes implemented sooner 
rather than later, in addition to requiring cost reducing or 
revenue increasing provisions that are smaller in magnitude, 
would allow workers and beneficiaries more time to adjust their 
behavior.
    Thank you, and I look forward to your questions.
    [The statement of Mr. Huston follows:]
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    Chairman FERGUSON. Thank you all for your testimony. And we 
will now start with questions. And I will start with that.
    Dr. Swagel, I want to start with you and talk to you 
about--you made a comment that just kind of caught me off. You 
suggested that one way of fixing this problem are general fund 
transfers to address the shortfall. If we did that, if we use 
that methodology, talk to us just very briefly about what that 
would do to the Federal debt and deficit each year, and what 
that potentially could do to interest rates and the amount of 
interest that the taxpayers are already paying.
    Mr. SWAGEL. Yes, sir. You know, as I said, the shortfall 
could be, you know, addressed in many ways. Transferring funds 
from general revenues, you know, the amount of dollars that 
would be needed in our projections is nearly $400 billion in 
2033, and about $550 billion in 2034. And, you know, in real 
dollars, the Treasury would have to come up with those 
additional dollars. That would mean, you know, either 
reductions in other spending or additional borrowing. That 
would mean more crowding out and impact on interest rates----
    Chairman FERGUSON. And given our level of debt right now, 
that does not seem like a viable option. That is not a 
question. That is a statement from me.
    I also want to ask you about in the shortfall category. You 
know, we hear a lot about, okay, the income cap right now of 
people who are making more than $168,000 a year, they are not 
paying their fair share. Currently, if you are paying above 
that, you are not--even if you are paying $168,000 a year--
paying Social Security taxes on $168,000 a year, there is still 
a shortfall. I mean, there is a difference between what you are 
paying in and what you are actually getting back.
    And then if you--and we have always tied the level of 
benefit to earnings, correct? So if you raise the cap, then, in 
theory, you would also raise the amount of earnings that people 
were eligible for down the road, or you would have to simply 
say--the answer is you are going to pay more in taxes, but you 
are going to receive less benefit. Is that a fair assessment?
    Mr. SWAGEL. No, that is right. And since the system as 
whole is progressive, you know, so thinking of lifetime 
benefits against lifetime contributions, the bottom quintile of 
people, you know, with--the bottom quintile, the lowest 20 
percent of lifetime earners gets about 2.5 times back in 
benefits as what they pay in in contributions. People in the 
middle get about 1.5 times. The top 20 percent, on average, 
gets about 1. So it is 1:1. So that is a sense which the system 
as a whole is progressive.
    Chairman FERGUSON. And it is my understanding that if we 
subjected all earnings in the U.S. to the Social Security 
payroll tax, we would still have about a $10 trillion shortfall 
over the next 75 years.
    Mr. SWAGEL. Yeah. So I don't have that number in my head. I 
can tell you, if we increase the taxable share back to 90 
percent--it is around 82.5 now--so made 90 percent taxable, 
that would delay exhaustion by 4 years. If we said everything 
above $250,000 is taxable, that would delay exhaustion by 13 
years. So it makes a difference, but it is--you know, there is 
still a challenge after that.
    Chairman FERGUSON. Mr. Goss, question for you. When you 
look at what Social Security has done in terms of enhancing 
benefits and paying out more, would you say that couples that 
retire now on average receive a much greater benefit than, say, 
couples that retired back in the nineties--adjusted for 
dollars?
    Mr. GOSS. Well, if we look at benefits as Barry indicated, 
the nature of the benefit formula is that it tends to rise with 
the average wage over time. So the people from one generation 
to the next, if they have had higher wage levels, a higher 
standard of living that Social Security benefits has been 
intended to maintain, therefore, a higher benefit level to give 
them a similar replacement rate.
    In that regard, individuals and couples now who are 
retiring and getting the benefits are not really receiving more 
than generations in the past. In fact, one of the major changes 
I have seen in the 1983 amendments was to change the normal 
retirement age, which increased it by, what, by--you know, from 
65 up to 67. And that actually lowered the average monthly 
benefit for people all as equal.
    Chairman FERGUSON. So you would argue with the fact that a 
couple who turned 65 in 1990 on average received $590,000 in 
lifetime benefits, and that is adjusted for 2023 dollars, when 
compared to a couple that turned 65 in 2020, they were 
projected to receive $812,000. And I look at it, and it looks 
like that the formula has actually increased--has pushed up the 
amount of lifetime earnings that a couple could see.
    Now, I say this to say that, you know, we have seen an 
increase in benefits over the years. It is not to argue that it 
is perfect, but we have seen that increase.
    Mr. Huston, I want to touch on one other thing, if I could, 
talking about, you know, the other things that our seniors--
and, look, seniors depend on this program, and we have an 
obligation, and it is important that we--that we honor what 
we--that Congress honors what it said it would do for the 
recipients of these benefits.
    But I look at this and I think to myself, in 50 years, 
there have been a lot of other programs that are out there to 
help seniors as well. I am going to tick through just a small 
list of these things: SNAP Program, Older Americans Act, 
housing choice vouchers, Weatherization Assistance Program, the 
LIHEAP, or Low-Income Home Energy Assistance Program, Lifeline 
programs, reverse mortgages, the Seniors Farmers Market 
Nutrition Program. My point is you can go on and on.
    And I think Congress as a whole, over the years, while it 
has made adjustments--while the formula for Social Security has 
said, we are going to see an increase in payments--but we have 
also done an awful lot to make sure that seniors have resources 
in many other areas for housing, in food assistance and, quite 
candidly, Medicare with healthcare as well. And there have been 
some great things that we have done there.
    So I think it is a little bit disingenuous to say that 
seniors don't have any other lifelines and this is the only 
thing. It is simply that seniors have a lot that they can 
depend on. And I think Congress has been very thoughtful in 
making sure that they have got the resources that they need.
    Again, I want to thank you for y'all's testimony.
    And, now, I am going to yield 5 minutes to my friend, Mr. 
Larson, for his questions.
    Mr. LARSON. Thank you, Dr. Ferguson.
    And, yeah, I almost don't know where to start. But 
basically, when I listen to the chairman speak, it is that, 
hey, you folks out there who are depending on Social Security, 
look, you already got enough. And for God's sake, what we don't 
want to do, at all costs, is make sure that billionaires pay 
their fair share. Because that would be--you know. And then, 
hypothetically, what would happen?
    Dr. Swagel, has the general fund ever been used to pay for 
Social Security?
    Mr. SWAGEL. You know, I don't know.
    Mr. LARSON. Ah. And so it has never been used but, 
hypothetically, that is what we are using here to try to say to 
the American public that somehow this is part of the--it 
contributes to the debt and deficit. That is total BS.
    Now, let me ask a couple of questions here. Mr. Goss, if we 
were to raise the retirement age by 3 years, as has been 
proposed, what would that mean in terms of cut to benefits, if 
we went from 67 to 70?
    Mr. GOSS. It would depend on how rapidly we did this. But 
at the point at which we had the retirement age raised by the 3 
years, as you had indicated earlier, that reduces retirement 
benefits, monthly benefits and lifetimes benefits, by about 6.5 
to 7 percent for each year that we raise. So an additional 3-
year increase in the normal retirement age would in fact lower 
benefits by on the order of 20 percent.
    Mr. LARSON. Now, Mr. Goss, also, because we have heard this 
question as well, what percentage of income does someone who 
makes $1 billion in wages contribute to Social Security?
    Mr. GOSS. Well, given that the most they are going to pay 
is their 6.2 percent, they and their employer, on the first 
$168,600, I think the number comes out, for a billionaire, for 
somebody with $1 billion of earnings, to about .1 percent of 
their total wages paid by them and another .1 percent paid by 
their employer.
    Mr. LARSON. What percentage is a person making $50,000 pay?
    Mr. GOSS. Well, they would pay their 6.2 percent by 
themselves and their employer matching the----
    Mr. LARSON. So, again, because we want to protect these 
billionaires and millionaires, it is unconscionable to think 
about the fact that they ought to pay their fair share, that 
they ought to be in a position where, as President Biden points 
out, if they do, we extend the solvency of the program for 66 
years, and we are able to add on benefits.
    Another question that comes up, because this happens 
frequently on the trail. Can you talk about how Social Security 
actually doesn't contribute a penny to the national debt?
    Mr. GOSS. Yes, be happy to. As I think everybody here is 
very well aware, Social Security has its trust funds, and the 
trust funds can only have positive balances. Social Security 
now has and never has had the ability to borrow from the 
general fund or the Treasury. That is in the current law. 
Anything could change in the future.
    But currently, Social Security can only hold asset 
reserves. And as a result, with the roughly $33 trillion, $34 
trillion of total Federal debt we have now, Social Security is 
actually covering approximately $3 trillion of that and not 
needing to be borrowed from the public at the moment.
    So Social Security can only really help surface some of the 
debt that the rest of the government develops. It does not 
contribute towards the debt.
    Mr. LARSON. So, for the general public to understand this, 
it is called a trust fund for a reason. And that trust fund has 
not been tapped into, nor will it ever be tapped into, unless 
Members of Congress have a different idea and want to change 
it. And they could through a vote, if they decided that this is 
the tact they would want to take. But the fact of the matter 
is, and it is a fact, that it doesn't contribute to the debt or 
deficit. And what aggravates people the most is, they pay into 
this. So does their employer. But their employer gets a tax 
write-off.
    Twenty-three million Americans get double taxed under 
current Social Security programs. And we as a body are the only 
ones that can change that. And instead, we don't put forward 
proposals that direct making the system both solvent and 
enhancing benefits, because people desperately need this money. 
Forty percent of our fellow Americans is the only thing they 
have. Twenty-eight million Americans.
    Chairman FERGUSON. The gentleman's time has expired.
    We now move to the gentleman from Ohio, Mr. Carey.
    Mr. CAREY. I want to thank the chairman. I also want to 
thank the ranking member, as well as the witnesses for being 
here today.
    Since day one, I have been a strong advocate for the 
strength and integrity of the Social Security trust fund. 
Unfortunately, if my numbers are correct, under this budget, if 
enacted, the administration's budget would cut approximately 
$17 billion to the Social Security trust fund over the next 
decade.
    Now, I am the grandson of a couple that lived only on 
Social Security. And I watched how they scrimped and saved and 
tried to do what they could. So with that being said, I am 
dedicated to working with my colleagues both on the Democrat 
side and Republican side to find some solutions.
    So, Mr. Goss and Director Swagel, the trustees in the 
Congressional Budget Office projected that, under current law, 
Social Security's Age-Old and Survivors Insurance Trust Fund 
would be depleted by 2033--we have established that--at which 
point the program will only be able to pay a fraction of the 
promised benefits. Absent any changes, what percentage of 
retirement and survivor benefits would be payable after the 
trust fund is depleted?
    Mr. GOSS. So our projections in the latest Trustees Report 
indicate that in 2033, the OASI Trust Fund alone should reach 
the point where we do deplete the reserves and have only 
continuing income coming in. That would cover about 79 percent 
at that point of the scheduled benefits that people are 
expecting.
    Mr. CAREY. Director?
    Mr. SWAGEL. Right. And we are just a little bit less than 
that. So we see the shortfall is a little bit less, but in the 
same ballpark.
    Mr. CAREY. So how is that projected to change in the years 
after 2033? Mr. Goss?
    Mr. GOSS. After 2033, that percentage will, of course, 
decline. I know off the top of my head for the total Social 
Security OASI and DI, that will drop from 83 percent, 
eventually down to 73 percent by the time we get to about 2098, 
and will be a little bit less than 73 percent payable for the 
OASI Trust Fund alone by that time.
    Mr. CAREY. Director?
    Mr. SWAGEL. Right. And, again, we have the same general 
result. You know, we see the shortfall as a bit larger, and so 
the decline in benefits, a bit larger, but it is broadly 
similar to what the trustees have.
    Mr. CAREY. Thank you both.
    Mr. Huston, the 1983 amendments were the last time that 
Social Security saw major program reforms and intended to 
address the system's funding shortfalls. Can you help us 
understand how those reforms came to be and what Social 
Security's finances looked like leading up to those reforms?
    Mr. HUSTON. Thank you. The 1977 amendments were the 
previous major reform, and they were estimated to get the 
program to be solvent for about 50 more years. The economic 
experience right after that proved to be much worse. In the 
1980 Trustees Report, they highlight that benefits would be not 
paid the full scheduled amount in under 2 years. Later in 1980, 
Congress passed a temporary reallocation of the payroll tax 
from the disability program to Old-Age and Survivors Insurance 
program.
    Later in 1981, as the situation continued to deteriorate, 
Congress authorized interfund borrowing, and President Reagan 
established what became known as the Greenspan Commission. The 
Commission's report included provisions that would have 
resolved about two-thirds of the projected shortfall and became 
the basis for the 1983 amendments. Congress later added several 
more provisions which covered about the remaining one-third of 
the shortfall. And when it passed in March, April of 1983, it 
was estimated that the OASI program was months, if not weeks, 
away from being able to pay the full amount of scheduled 
benefits.
    Mr. CAREY. Thank you for that.
    I am going to follow up to Mr. Goss. How does the projected 
cash imbalance in 2033 compare to the imbalance in the early 
1980s?
    Mr. GOSS. The projected imbalance in 2033--let's see, I 
actually had the numbers in the testimony here for 2035. We are 
at this point actually having a fairly significant imbalance in 
2035, much more than was expected after the 1983 amendments. 
Again, really primarily for the one factor of the changing 
distribution of earnings in the economy. We have actually lost, 
as mentioned, I think Dr. Swagel mentioned earlier, we have 
gone from 90 percent down to 82 percent of all covered earnings 
being below our taxable maximum. That is an 8 percent reduction 
in the amount of revenue that we would have expected. And that 
cumulatively, ever since 1983, has had a major effect on the 
level of trust fund reserves that we have. That is the primary 
reason why we have----
    Mr. CAREY. My time has expired. I thank the witnesses, and 
I thank the chair for giving me the opportunity. Thanks so 
much.
    Chairman FERGUSON. I thank the gentleman from Ohio.
    Next, the gentlelady from California.
    Ms. Sanchez, you are now recognized for 5 minutes.
    Ms. SANCHEZ. Thank you, Mr. Chairman.
    I must say that it feels like we have been here before. It 
feels a little bit like Groundhog Day in this committee, 
because each time that the subcommittee convenes to talk about 
the future of Social Security in this country, we hear plenty 
of proposed solutions on the Democratic side.
    For example, my friend, Ranking Member Larson, has pushed 
Social Security reforms again and again. He is very passionate 
about this issue. And his planned Social Security 2100 would 
increase benefits across the board, repeal WEP and GPO, and 
make Social Security work better for every American. And all of 
those benefits that we just talked about would be paid for, and 
they would serve those who need them the most.
    My Republican colleagues, on the other hand, are proposing 
significant cuts to Social Security. And while those cuts would 
be detrimental to all Americans, it would disproportionately 
impact people of color who would be affected the most by cuts. 
People of color are less likely to work for employers who offer 
pensions or any kind of retirement plans. So they are more 
likely to rely on Social Security after retirement.
    Proposed cuts to Social Security would really be a direct 
attack on those communities of color, specifically the Latino 
population, who relies almost exclusively on Social Security 
for their retirement.
    Once again, we are hearing talk about Republican plans to 
cut benefits, and in stark contrast, the Democratic plans, 
which are to increase benefits for those in need.
    I very much appreciate our witnesses coming here today to 
discuss this issue. Mr. Huston helpfully outlined what this 
subcommittee already knows, that the combined trust fund will 
hypothetically be depleted sometime after the year 2035. 
Everyone on this dais knows that this is a problem. But the 
real disagreement comes in how do we fix it.
    I, you know, hear my colleagues across the aisle maintain 
that, you know, slashing Social Security benefits or 
privatizing Social Security and raising the retirement age is 
somehow going to benefit Social Security as a whole. And I 
disagree with that.
    As my dear friend, Ranking Member Larson, always says, 
Social Security is the most successful anti-poverty program in 
our country.
    So we shouldn't be talking about slashing benefits, 
increasing the retirement age, privatizing Social Security. We 
need to find a very thoughtful path forward. And I think my 
friend, Mr. Larson's, proposal is that path forward.
    I just want to quickly talk about something that was 
mentioned in terms of who pays into the Social Security trust 
fund, and the fact that the fertility rate in the United States 
is declining, our birth rate is not replacement rate. But there 
is one potential avenue for finding the workers that we are 
going to need in the future if our economy is going to continue 
to grow and if we are going to keep the Social Security fund 
solvent, and that is immigration and immigration reform. That 
is something that I have been working on for 22 years in this 
Congress. And we have done nothing other than throw more money 
at the border, more enforcement.
    If we provided pathways to citizenship for people like 
Dreamers who were brought to this country when they were 
children, have never known another country but this, they want 
to work, they want to pay taxes, they want to pay into the 
system, if we were to increase legal pathways to citizenship, I 
think our Social Security trust fund would be in better shape.
    Is there anybody on the panel that disagrees with that?
    Okay. That is what I suspected. And yet we cannot get 
traction for a comprehensive overhaul of our broken immigration 
system so that we will have the workers of the future that we 
are going to need if we want our country's economy to continue 
to grow.
    I have nothing further, other than to say, you know, it is 
a little disheartening when we have a system right now where a 
professional baseball player who earns millions of dollars in a 
season hits the Social Security cap in their first at bat of 
the season and for the rest of the season does not pay into the 
Social Security trust fund. I think if we could balance that 
out to make it a little bit fairer for everybody, we would find 
some revenue to extend the livelihood of the Social Security 
trust fund. I don't understand why that proposal is not one 
that my colleagues on the other side of the aisle are willing 
to--are willing to consider.
    And with that, I will yield back.
    Chairman FERGUSON. As a Braves fan, we would support that 
coming all out of the Nationals' payroll.
    With that--and I thank the lady for her comments.
    With that, we will yield 5 minutes to the gentleman from 
Arizona, Mr. Schweikert.
    Mr. SCHWEIKERT. Thank you, Mr. Chairman.
    Dr. Swagel, first off, don't all workers, whether they are 
just on a work visa, a Dreamer, even if they don't have U.S. 
citizenship, they are paying a FICA tax, correct?
    Mr. SWAGEL. The ones who are in the country lawfully.
    Mr. SCHWEIKERT. Legally.
    Mr. SWAGEL. That is right. Yeah.
    Mr. SCHWEIKERT. Okay. I just want to--okay. Because that 
was a misnomer.
    I want to work through--so because there is some baseline 
problems I have between CBO numbers and the actuary report. I 
think the actuary report already understands their fertility 
calculations are substantially off from even censuses at math 
and those. But let's walk through some stuff here.
    For just this year, so let's do our 2024 year. We have 
payroll taxes, income tax from beneficiaries, and the 
interest--because they are going to make about 6 percent of the 
fund--it is going to come in as interest. I have 1 trillion, 
166 billion. Okay. I have the spend in the 2024 fiscal year of 
1 trillion, 480. Do those sort of match up with your numbers? 
That means the 2024 reaching into the trust fund will be $314 
billion this year.
    Mr. SWAGEL. Yeah, that is close to what I have got.
    Mr. SCHWEIKERT. Okay. So it is $26 billion a month is 
reached into the trust fund and used to supplement the checks 
that are going out the door?
    Mr. SWAGEL. That is right. And the money from the trust 
fund is, you know, the securities of the trust fund redeemed by 
the Treasury.
    Mr. SCHWEIKERT. Yeah. It is the special T-bills. But some 
people don't understand that there were--you know, six percent 
of the entire revenues, at least this fiscal year, on Social 
Security are actually interest that the general fund pays for 
having borrowed the money.
    Mr. SWAGEL. That is right.
    Mr. SCHWEIKERT. So you do have the weird multiplier. And 
then there is the tax on benefits, which is about four percent.
    I wanted to make sure, because there was a couple of things 
said that made it sound like the trust fund isn't already in 
play. It is in play this year. Over $314 billion will be 
borrowed from the trust fund this year--excuse me, refunded--
the trust fund will cash in.
    Mr. SWAGEL. Redeeming securities.
    Mr. SCHWEIKERT. Yeah, redeem.
    Mr. SWAGEL. That is right.
    Mr. SCHWEIKERT. A couple other things I want to walk 
through. And instead of me leading you on these, I have three 
or four charts here. What do you see is the biggest 
differentials between SSA baseline and the CBO baseline? 
Particularly, I am looking at--you have a fairly substantial 
difference in outyears on, you know, their baseline. You also 
have some different calculations on the caps.
    But first, off the top of your head, can you give me what 
you see as differences on how the CBO actuaries built their 
model compared to the SSA?
    Mr. SWAGEL. Sure. I can talk to that now, and I know Steve 
will have, you know, a lot to stay also.
    So we do have different modeling technologies. So I will 
just set that aside. You know, we do things slightly 
differently. We do current law. And, you know, they assume some 
changes in the law. You know, outside of Social Security but in 
the tax law.
    In the parameters, the sort of numbers where we have 
different GDP growth, and Steve highlighted that this year, you 
know, they have bumped up GDP growth. And that just slightly 
more than offset, you know, their moving toward, you know, sort 
of what is happening on fertility. So it is growth fertility. 
They have much higher interest rates further out.
    And then immigration. You know, we have picked up the 
immigration surge that is not yet in the population numbers. 
But working with DHS numbers, we have picked that up.
    Mr. SCHWEIKERT. And where I was really going with this was 
not to pick on the Social Security actuaries or the CBO. It was 
more, I am trying to head towards the fragility of the numbers. 
When we did our math last year, the exhaustion, the first year 
of exhaustion was $616 billion short. Now it is 400 and some.
    Mr. SWAGEL. Yeah. Yeah. And in ours--that is immigration. 
In essence, it is from last year to this year, we picked up 
immigration. And sometimes we picked up--the immigration surge 
started in 2021.
    Mr. SCHWEIKERT. Okay. So year of exhaustion, you pick up a 
couple hundred billion just on what you consider immigration 
population.
    Mr. SWAGEL. The immigration surge, that is right.
    Mr. SCHWEIKERT. Okay. But it also actually should give us a 
sense of the level of fragility if we were to go into 
recession. You know, let's say it is a mild recession, would we 
probably see--you know, because you just had a $200 billion 
change at the end of the ten, in a single cycle. I am trying to 
get some sense of the fragility of that baseline number.
    Mr. SWAGEL. I agree that a recession would affect wages, 
would affect contributions. It would also affect fertility, 
right. After the 2008 rece--you know, recession and financial 
crisis and after the pandemic, fertility declined. It came up a 
bit, but not--you know, it didn't go backward.
    Mr. SCHWEIKERT. Yeah, but then it took a big spike downward 
last year. We went to 1.63.
    Mr. SWAGEL. Yeah.
    Mr. SCHWEIKERT. And I am over my time.
    Mr. Chairman, without objection, I have a number of charts 
that we have worked on with both taking from the actuary report 
and then some notes from the joint economic economists. I would 
like to add those to the record.
    Chairman FERGUSON. Without objection, your charts are added 
to the record.
    [The information follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. SCHWEIKERT. Thank you, Chairman.
    Chairman FERGUSON. Thank you.
    Next, we will call on the gentleman from Michigan, Mr. 
Kildee. You are now recognized for 5 minutes, sir.
    Mr. KILDEE. Thank you, Mr. Chairman and Ranking Member, for 
holding this hearing.
    And to our witnesses, thank you so very much for being 
here, and perhaps more importantly, for your years of work on 
this and other subjects.
    I am from Michigan. In Michigan, over 2 million seniors 
rely on Social Security just to make ends meet. For most of 
those folks, Social Security is the most important source of 
income retirement--or retirement income. And, in fact, for 
many, it is the only source of retirement income that they 
depend on. They have contributed, these folks that I represent, 
that we all represent, have contributed to Social Security with 
every paycheck, and rightfully expect that it will be waiting 
for them when it is time for them to retire. That is sort of 
the deal.
    When you work hard, you play by the rules, you ought to be 
able to retire with dignity. Those American workers have lived 
up--paycheck to paycheck, have lived up to their end of the 
deal, and so it is really important that Congress, on behalf of 
the American people, live up to our end of the deal and make 
sure that that benefit that they paid for, that was promised to 
them, is waiting for them.
    Democrats on this committee--it has been mentioned, Mr. 
Larson's leadership on this issue, Democrats on this committee 
are focused on delivering on that promise. And we are willing, 
even if it is hard, even if it may not be perfect, we are 
willing to put our name behind a proposal to fix this problem. 
And that is why we put up our solution to shore up the Social 
Security trust funds, to increase benefits, important part of 
this provision, for current and future retirees. We do so by 
making the wealthiest Americans pay into Social Security at the 
same rate as those Bay City teachers that I represent or 
Saginaw firefighters that I represent, Midland factory workers 
that I represent are paying out of their paychecks. This 
approach stands, as has been said, in pretty stark contrast to 
the proposals or lack of proposals put forward by our 
Republican colleagues.
    Now, we haven't seen the legislative approach prepared and 
drafted and dropped in the hopper. We have done ours. But we do 
know that the Republican Study Committee, which 80 percent of 
House Republicans belong to, recently released their budget 
plan for 2025. And under their plan, Republicans would cut 
Social Security benefits by $1.5 trillion. You can say it is 
this or that or the other thing, but when you take that kind of 
money out of the program, someone is going to have to lose a 
benefit.
    This proposal which raises the retirement age and cuts 
benefits for family members couldn't be more out of step from 
what I hear back home about the solutions that people want to 
see us take up.
    For the Michiganders, the seniors that I represent barely 
getting by on their Social Security check, the answer to the 
long-term solvency of Social Security is not to increase the 
retirement age, not to cut benefits. It is time that we advance 
legislation that increases Social Security benefits to reflect 
the true cost of living that they experience and does so by 
making the wealthiest Americans, who have done extraordinarily 
well, as evidenced by some of the data dating back to the 1983 
reform, the millionaires and billionaires have done 
extraordinarily well, and they certainly can step up and do 
their fair share.
    Again, it is time to move legislation that does not cut 
benefits, that solves this problem by making sure that the 
people at the very top of our economy pay their fair share. 
That is what our legislation would do.
    I don't want to ask a question. I just want to say to Mr. 
Huston, Mr. Goss, and Mr. Swagel, thank you for the work that 
you do. Thank you for keeping us informed with the facts. The 
facts speak to the need for us to take action.
    I look forward to working, for my remaining time here in 
Congress, alongside each and every one of you to make sure we 
solve this problem. So thanks for your service to our country,
    Ms. SANCHEZ. Will you yield?
    Mr. KILDEE. I would yield to Ms. Sanchez.
    Ms. SANCHEZ. Yeah. I just want to put a finer point on the 
immigration issue. When we have an underground economy, when 
workers are not part of the legal system, they do not pay into 
the Social Security system. Is that correct? Does anybody 
disagree with that?
    Mr. GOSS. That is correct.
    Ms. SANCHEZ. So, if we had opened up legal pathways for 
folks to naturalize and get their citizenship, they then would 
be, if they were working, paying into the Social Security 
system. Is that not correct?
    Mr. GOSS. That would make a significant difference. There 
are cases where people are not legally authorized, but they may 
nonetheless have earnings reported on their behalf by their 
employer with tax revenue coming into the trust funds. It goes 
into what we call the earning suspense file. They will likely 
not ever get any benefit credit, but payroll taxes still accrue 
in many cases where people are not legally work authorized.
    Ms. SANCHEZ. But that probably isn't the norm, because I 
would expect that in a cash underground economy, nobody is 
contributing into the Social Security trust fund.
    Mr. GOSS. If people are paid cash literally, absolutely.
    Ms. SANCHEZ. So, again, if we opened up legal pathways for 
those folks to regularize their status, we could boost what 
goes into the Social Security trust fund, correct?
    Mr. GOSS. Definitely, yeah.
    Ms. SANCHEZ. Thank you. And I thank the gentleman for 
yielding.
    Mr. CAREY [presiding]. The chair now recognizes Mr. Kustoff 
for 5 minutes.
    Mr. KUSTOFF. Thank you, Mr. Chairman. Thank you for the 
witnesses for appearing today.
    If I could, Mr. Goss, if I could ask a question more on 
process than substance for a moment. I am a big believer that 
we can always look to history when we are trying to address 
issues and problems and see what was done right and see what 
was done wrong.
    From a historical perspective, giving guidance to us, can 
you talk about the 1983 process and lessons that we can learn, 
right and wrong, to help direct us?
    Mr. GOSS. Wonderful question, thanks very much. And I was 
actually there working with Moynihan and Dole and others 
throughout the Greenspan Commission and after. It was a 
wonderful process.
    I would say that what we really need to do is to do that 
more and more often, to have the kind of discussion we are 
having today, to talk about the possibilities through the 
Greenspan Commission and through the conference committee that 
actually developed the 1983 amendments. We made a lot of 
progress.
    One of the shortfalls that we had at the time was computers 
have advanced a little bit since 1983. We were not able to 
overnight develop a full annual projection of what the 
implications of reform would be at that time. We are now able 
do that literally overnight. For example, the fact that we had 
the big rise up in trust fund reserves expected in the 1983 
amendments and then dropping down at the end. Had we had more 
time, we might have been able to smooth that out and been in 
better shape. But we are now in much better shape to do it.
    If I may just add, by the way, I think Phil and I are going 
to have to talk, because our projected shortfall for the 
calendar year 2024 for the OASDI program as a whole, our 
reduction in our trust fund reserves is $100 billion. I think I 
heard $300 billion. What is curious here is that, in fact, from 
the 2023 Trustees Report last year to the new one, the economy 
did so much better in 2023 that actually we are in better shape 
now. And here is the really good news: The end of 2023 and so 
far in 2024, the economy is actually operating better now than 
we even had included in our 2024 Trustees Report. I assume that 
is probably the same for the CBO projections. So I am not quite 
sure why CBO is seeing a $300 billion drop in trust fund 
reserves where the trustees, on what are conservative 
assumptions so far for 2024, has seen only a $100 billion drop.
    Mr. KUSTOFF. Are there other lessons, good or bad, that we 
can learn from the 1983 process?
    Mr. GOSS. I think the lesson that we learned then was that 
there was great cross-aisle discussion, bicameral, bipartisan. 
It was a wonderful experience dealing with people all looking 
towards where we were. Now, of course, the one shortfall was 
that it was so late in the game, as Barry mentioned earlier. So 
the fact that we are now roughly 10 years before the point of 
reaching reserve depletion is wonderful. If we could add that 
kind of cross-the-aisle discussion and come to serious 
discussion about what we want to do for the American people, 
that would be wonderful.
    So there was great bipartisan discussion back in the day, 
but it was very late in the game. We are now in a nice position 
of being 10 years before reserve depletion to be able to 
hopefully come up with a good approach.
    Mr. KUSTOFF. Thank you, Mr. Goss.
    Mr. Huston, can I talk to you about your report for CRS? 
You have a section in there about interest income. And you show 
the disparity in interest income to about 2008, 2009, 2010, and 
then it drops off.
    Can you walk us through the early 2000s to about 2009, 
2010, and walk us through the present as it relates to interest 
income and its relevance?
    Mr. HUSTON. Sure. So as I had mentioned in my oral and my 
written testimony, there is three sources of revenues for the 
trust funds. One is the payroll taxes, another is taxation on 
benefits. And in years where there is excess tax revenues, 
those excess funds get invested in interest-bearing government 
securities. And then the trust fund earns interest on those, 
and that becomes the third source of revenue.
    Interest income that is not needed to pay benefits gets 
credited back to the trust funds. And the trust funds never 
needed to rely on that interest income till about 2009, 2010. 
Starting in 2009, the cost rates started to exceed the income 
rates, and the income stream started to be used as a means to 
help pay benefits. That has been moving forward up until 2021, 
when, in addition to the interest income, the program has also 
needed to rely in part on the trust fund assets themselves to 
help pay benefits.
    Mr. KUSTOFF. Thank you very much.
    My time has expired. I yield back.
    Chairman FERGUSON [presiding]. I would ask for just a 
little bit of leeway here from my colleagues before I call on 
Ms. Moore.
    Dr. Swagel, I believe that you--I saw you wanted to respond 
to the question about the difference between Social Security's 
estimates and CBO's estimate on the withdrawal of the $100 
million versus $300 billion.
    Mr. SWAGEL. Yeah. I mean, and since----
    Chairman FERGUSON. And if you could make this quick.
    Mr. SWAGEL. Yeah, sure, sure. Of course, there is a lot to 
numbers. So we have--it is $150 billion now that the trust fund 
expenditures exceed the income, and that is rising to $500 
billion in our projections by 2034.
    Chairman FERGUSON. Okay. Thank you for that clarification.
    Now the gentlelady from Wisconsin, Ms. Moore, you are now 
recognized.
    Ms. MOORE of Wisconsin. Thank you so much.
    And I am always delighted to talk about our premier program 
that prevents seniors from living in poverty, particularly 
important for our disabled community, women, and people of 
color.
    I want to start out by thanking one of our witnesses, Mr. 
Goss, for diligently working with me and my staff and answering 
questions that we have given you in writing.
    I think it is important, when we talk about--Mr. Chairman 
and Mr. Ranking Member--that when we talk about Social 
Security, we talk about it in real terms, that we really come 
to the table, coming together in good faith. And my concern is 
that it is not good faith to come to the table scaring young 
people, telling them not to rely on Social Security because it 
won't be there anymore. So many young people have bought into 
the idea that it is hopeless to ever rely on it or to--you 
know, that is not a realistic way of fixing it.
    It is not fair to come to the table and say to people the 
only way that we can fix it is to cut benefits by 25 percent. 
You can't say that you are working toward a solution to say 
that we ought to raise the retirement age. You know, you look 
at all the gray hair up here. It is one thing for us to be 
doing this kind of work at our age, but when I think about the 
people that I need to fix the gutters on my house, I don't 
think any of them are going to make it by increasing the age.
    But one of the things that I just wanted to review with 
you, Mr. Goss, there are many roads to the city. And before I 
talk to you, I want to talk to Mr. Swagel.
    You shared with my colleague, Ms. Sanchez, that you thought 
immigration reform was a real vital way to improve the 
receipts--the payroll receipts. And you also mentioned, as Mr. 
Schweikert well knows, that we have decreased population, and 
we are facing a fertility crisis.
    And so, you know, we have several approaches to 
immigration. But I once read the CBO report, that within a 
window of a 10-year budget window, we could see a $1 trillion 
increase minimum if we were to have some sort of immigration 
reform. Am I remembering that correctly?
    Mr. SWAGEL. Yes. What we said is that the immigration surge 
we project from 2021 to 2026 will result in about $1 trillion 
of additional revenue. We are working further on that. So we 
will have an update to that soon, but it is still on the order 
of----
    Ms. MOORE of Wisconsin. That is only 5 years, $1 trillion.
    Mr. SWAGEL. Over the 10-year period.
    Ms. MOORE of Wisconsin. Over the 10-year period.
    Mr. SWAGEL. The 5 years is over----
    Ms. MOORE of Wisconsin. Well, I just wanted to remind us of 
that.
    Mr. Goss, you sent me a really long memo. Be careful of 
what you ask for, people actually might write you back. And so 
what I asked you to analyze was how could we maintain the 
solvency of this program but yet be humane and recognize that 
people were getting older, that people were losing benefits, 
because they--5 years of their lives have gone toward 
childcare, rearing, women who never--don't get that credited, 
people over 80, kids who lost their benefit. There have been so 
many teary-eyed Members of Congress that have talked about how 
they were able to go to college after their dad died.
    And so, I propose restoring all those benefits and still 
extending the life of Social Security by 24 years. I have 42 
seconds, take it away, sir, and sort of review this thick memo 
for us.
    Mr. GOSS. Well, thank you very much. There is no question 
that we can maintain the benefits we have now, but we do need 
more revenue in the future. Because of what has happened with 
the changing earnings distribution and the changing number of 
working age people versus retirement age people in our country, 
largely because of the birth rate dropping, we do have a 
situation where to maintain the level of benefits we had 
scheduled in current law we will need more----
    Ms. MOORE of Wisconsin. I mean, it is a modest change in 
benefits. Like, right now, we have a combined contribution 
level of 12.4 percent. If we were to increase it by 13 percent 
payroll an employee, that is how we achieve that 24-year 
increase. So, you know, you pay a penny today for benefits for 
25 more years. Am I correct?
    Mr. GOSS. That is right. And let me just also go back to 
immigration that you mentioned, which is so important. We have 
less than 4 million births per year in this country, but our 
net immigration is on the order of 1 million. That is an 
enormous help in terms of maintaining our population in the 
future. We had such a drop in births because of the birth rate 
since 1965, that having elevated immigration would be a big 
help in maintaining our population and the age, distribution, 
which would have enormous ramifications.
    Chairman FERGUSON. The gentleman----
    Ms. MOORE of Wisconsin. Sorry. Mr. Chairman, let me thank 
you for your indulgence, and Mr. Ranking Member. And I will 
yield back.
    Chairman FERGUSON. Thank you, Ms. Moore.
    The gentleman from Pennsylvania, Mr. Smucker, you are now 
recognized for 5 minutes.
    Mr. SMUCKER. Thank you, Mr. Chairman.
    I refer to something Mr. Larson said. I am not even sure 
where to start here. There is a lot to talk about. This has 
been a great conversation.
    A few things I want to mention, I think. Mr. Goss, you had 
responded in an answer to a question from Mr. Kustoff about the 
Commission or the deal in 1983, and talked very positively 
about that; really people coming together and resolving this, 
putting everything on the table and making it solvent for years 
to come. We can do that again, right, and we should do that?
    Mr. GOSS. We are much looking forward to that.
    Mr. SMUCKER. Yeah. And would like to suggest to Mr. Larson 
and others who I think are, you know, sincere about the desire 
to fix Social Security, there is a difference between proposing 
a bill that doesn't go anywhere and having a real bipartisan 
discussion about resolving this. And so, I guess, I would like 
to suggest the fiscal commission that we had recommended that 
looks at both debt and Social Security really is an attempt to 
do that. And I know you have spoken out----
    Mr. LARSON. Would the gentleman yield?
    Mr. SMUCKER. Let me finish my sentence and I would be happy 
to.
    Mr. LARSON. Sure.
    Mr. SMUCKER. I know you have spoken out against that and, 
you know, I am telling you in all sincerity that I think that 
we could resolve this if we had that kind of conversation with 
the American people. We could do what has been done in 1983. 
And we could take your bill and others and put them together 
and really resolve this for the American people. I can tell you 
that I am certainly interested in doing that, people on our 
side are interested in doing that. And we are willing to put 
everything on the table.
    And so, yes, I will yield.
    Mr. LARSON. So what is it you are putting on the table, 
number one? And there are many Social Security proposals that 
exist out there, not just Social Security 2100.
    But also, there is a big difference between the Greenspan 
Commission and the commission that was proposed behind closed 
doors with only a select group of people with a decision that 
would require only an up or down vote is----
    Mr. SMUCKER. Well, and I----
    Mr. LARSON. That is not a democratic--let's sort through 
this, let's have this exposed to the public, let's go through 
this, and let's put all those discussions on the table. And I--
--
    Mr. SMUCKER. So I am going to reclaim----
    Mr. LARSON [continuing]. Totally agree with you that people 
like yourself and others are very sincere about this, except 
the proof is in the pudding.
    Mr. SMUCKER. And I will take my time, because I would love 
to get to a lot more here. But I would love to continue to have 
that discussion. I would love to not just get a no on that, 
because I can tell you, we are sincere about it and we could 
put everything on the table to try to solve this.
    I do want to--on your point on the debt, so very briefly so 
that people understand this, initially when Social Security was 
put in place, we were taking in more money coming in than was 
going out, correct? When did that change? When did Social 
Security no longer begin to receive each--more money annually 
than they were paying out?
    Mr. Goss?
    Mr. GOSS. Well, most recently that has occurred in 2010. It 
was expected to be in 2020 at the time of the 1983 amendments, 
but because some of the changes----
    Mr. SMUCKER. So since 2010, we have been paying out more 
than we have been taking in?
    Mr. GOSS. Exactly.
    Mr. SMUCKER. And within 9 years, the difference--the trust 
which was the difference that has been accumulating over time 
that has been borrowed and is being paid back, in 9 years, that 
expires, right? That is gone. We no longer have excess funds. 
Am I right on that?
    Mr. GOSS. On a combined basis, maybe 10 years, on that 
order.
    Mr. SMUCKER. So at that point, unless something changes, 
people will no longer get all of their Social Security benefits 
because we don't have money to pay it, correct?
    Mr. GOSS. Under current law----
    Mr. SMUCKER. Yes.
    Mr. GOSS [continuing]. We cannot pay what is not in the 
fund.
    Mr. SMUCKER. Or if at that time Congress decides to make it 
up by taking on additional debt, that is a choice we could 
make, right? We could continue to pay benefits, if nothing has 
changed, by taking on additional debt and paying for those 
benefits.
    Mr. GOSS. Unprecedented, but anything is possible.
    Mr. SMUCKER. But at that point, it would add to the debt, 
right?
    Mr. GOSS. If Congress were to change the law and say that 
we will borrow from the public----
    Mr. SMUCKER. The only point I am making--and I would love 
to have more conversation about this publicly, that is why we 
need a commission to talk about this--is that this will 
contribute--there is a fundamental problem: We have far fewer 
workers than we do retirees. That ratio is far different, and 
so we need more workers.
    By the way, I agree with Ms. Sanchez, who I don't often 
agree with, on immigration. It is something that it is a 
partial solution here. We need a lot more workers, we should be 
talking about legal immigration.
    But it is a great conversation. I wish others would agree 
that we need to continue to have this conversation. This is how 
I think a commission could work. We would take this 
conversation across America. We would begin to have a real 
understanding of the facts and how they exist. We just can't 
have that conversation in 5 minutes each here. I only get 4 if 
I give some to you. But, like, I would love to continue this 
conversation.
    But thank you, Mr. Chairman, for your indulgence of time 
here.
    Chairman FERGUSON. Thank you, Mr. Smucker.
    Next, we will go to our dear friend from the great State of 
Illinois, Mr. Schneider, you are recognized.
    Mr. SCHNEIDER. Thank you.
    And I will say to not just my friend, my next-door 
neighbor, Mr. Smucker, I look forward to the conversation. I 
think it is important that we have it. I will challenge this 
one premise: I don't think it is a binary option.
    And, Mr. Goss, I am going to ask you about the trust fund 
in a second, but it is not just necessarily going to debt. 
There is no reason, I am not advocating this, but we could 
raise taxes to pay for it. There are whole ways to do it. Or we 
could, as was mentioned earlier in the conversation, increase 
the percent of income debt paid into Social Security as a piece 
of it. We need to have a discussion around all of those things.
    And, Mr. Goss, I took a quick look at your biography. You 
are a little bit older than me. I graduated college in 1983. I 
want to make sure that we are going to be in the same way. You 
were actually here in 1983 when they were talking about Social 
Security. When I graduated, every one of my classmates and my 
cohort were told Social Security won't be there for you because 
it is insolvent, and then Congress acted. So we are talking 
about the trust fund being depleted.
    Why is there a trust fund in the first place? And I will 
get the leading question, wasn't the plan to create a trust 
fund for a period of time that would rise and then ultimately 
fall? Isn't that the design from the 1980s?
    Mr. GOSS. Well, the trust fund--we oftentimes refer to the 
money in the trust funds as a contingency reserve. This is not 
an advanced funded program. If we were a fully advanced funded 
program, our trust fund reserves would actually be about 25 
times annual cost. We are only at about 1.5 or so times annual 
cost now because it is supposed to be a contingency reserve. 
If, as some have mentioned, we were to hit another recession at 
some point and our income started to drop relative to our cost, 
we need to have some time to draw on those contingency reserves 
so that you all will have time to make changes to address that 
issue.
    Mr. SCHNEIDER. But the goal was to buy time in the 1980s. 
And here I am now 40 years--40-plus years since then, and 
people that I went to school with, that I grew up with, are 
beginning to retire. And for many of them, their retirement and 
the security of their retirement is standing on a foundation of 
Social Security that they didn't believe would be there for 
them 40 years ago. But because of the work we did in this--work 
those before us did in Congress, extended it. And I think now 
it is falling on our shoulders to figure out how do we make 
sure that the next generation, the young people and the young 
people graduating today.
    You know, in 1983 when I graduated, we had the recession. 
It was the tail end of the recession, the economy had great 
success ever since. The kids graduating today first graduated 4 
years ago from high school in the teeth of COVID, now are 
graduating, and the challenges are different. The least we can 
do is stand there for them. But I think there is also a way 
that we do it.
    So, you know, the Republican Study Committee's proposal of 
cutting Social Security by $1.5 trillion puts a burden on those 
who can least afford it who are depending on Social Security. 
The idea of raising the retirement age--you know, life 
expectancy is in many cases tied or at least there is a 
correlation to income. And those who are in the highest income 
brackets, when they retire, let's assume at 67 right now, their 
life expectancy at retirement is another 20-plus years. For 
those who are in the lowest quintile, their life expectancy in 
retirement is less than 10 years. It is a factor of health; it 
doesn't matter why.
    If we raise the retirement age from 67 to 70 on these 
people, we are literally cutting their expected retirement by 
fully a third. People who have worked their entire life, who 
have followed the rules, who have struggled their entire life 
to make ends meet, and we are to tell them that their golden 
years are going to be cut by a third? That just doesn't seem 
fair.
    So, we need to have these conversations, we need to be 
working together, Republicans and Democrats, across the aisle, 
but we have to do it in a way that recognizes the original 
intent of Social Security, an insurance program to give 
Americans, after a lifetime of service and contribution to 
their communities and their Nation, a dignified and secure 
retirement.
    And that is why, Mr. Smucker, I look forward to working 
with you--we just have to walk one office over--but with our 
other colleagues to have these conversations, and I do agree, 
we have to take it to the public.
    And I am grateful for our ranking member, Mr. Larson, your 
leadership and work, and you have done incredible yeoman's 
effort with Social Security 2100. How do we take this not just 
for another 20 or 30 years. I think earlier it was said that--
Dr. Swagel, I think you were asked the question. You said if we 
took it to 90 percent, we would have 13 years. Thirteen years 
is great if you are in your 80s. If you are 25 years old, 13 
years doesn't solve the problem. How do we add 75 years to this 
to do it in a way that reflects our values as a country, the 
hardworking American individuals and their enterprises are 
doing to grow our country.
    And so, I am over my time. I am sure I have lots of 
questions for all of you, but I don't want to keep us longer. 
Let me just say thank you to the chairman and ranking member 
for this hearing. We have to get this done. It is our 
generation who is benefiting from Social Security that needs to 
make sure that the next generations have the same benefits that 
we have.
    I yield back.
    Chairman FERGUSON. I thank the gentleman.
    Next, the gentleman from Iowa, Mr. Feenstra, you are now 
recognized for 5 minutes.
    Mr. FEENSTRA. Thank you, Chairman Ferguson, Ranking Member 
Larson.
    Thank you also, Dr. Swagel and Mr. Goss and Mr. Huston, 
thank you for being here today.
    We have got, obviously, a lot of concerns with Social 
Security, and we have got to resolve them. But we also have to 
be singing from the same song book, understanding what is 
happening.
    Dr. Swagel, I have got a lot of things to talk about, but I 
want to just ask you, do Social Security payments create debt?
    I mean, I am hearing from the other side that there is this 
view that it doesn't. And I would like you to explain to me, 
does it create debt?
    Mr. SWAGEL. You know, there are lots of ways to look at it, 
and I realize that is part of the confusion. The $150 billion 
that I think Steve and I both, you know, talked about, today 
that is being funded by the Treasury, the cash has to come from 
the Treasury to get that $150 billion.
    Mr. FEENSTRA. It has got to redeem its assets.
    Mr. SWAGEL. Exactly.
    Mr. FEENSTRA. Correct? I mean, Social Security has got to 
redeem its assets.
    Mr. SWAGEL. Yes. It is an asset for Social Security, but it 
is a liability for the Treasury. The Treasury borrows----
    Mr. FEENSTRA. Thank you. And so what is the Treasury going 
to do again? So you have go to redeem the assets, but how does 
the Treasury redeem its assets?
    Mr. SWAGEL. To come up with the cash, the Treasury----
    Mr. FEENSTRA. Yeah, comes up with the cash by selling 
bonds, right?
    Mr. SWAGEL. Selling bonds, everything----
    Mr. FEENSTRA. Thank you. Yeah, exactly right. So it 
actually is adding to our debt, right?
    Mr. SWAGEL. To redeem the assets in the trust fund, the 
Treasury has to borrow and create debt.
    Mr. FEENSTRA. Yes, it has got to create debt. Yes.
    Mr. Goss.
    Mr. GOSS. So if we redeem $100 billion of debt that is owed 
to the trust funds and we trade that for $100 billion that is 
now owed to the public, it is merely a swap. The total Federal 
debt is unchanged.
    Mr. FEENSTRA. But you still have got to--you have got to 
sell bonds to do that. The Treasury still has got to sell bonds 
to do that. Is that a fair statement?
    Mr. GOSS. It has to sell bonds to the public by redeeming 
the same amount of bonds that it now--that are held by the 
trust fund.
    Mr. FEENSTRA. Thank you.
    But, Mr. Swagel, can you answer that?
    Mr. SWAGEL. Yeah. You know, the numbers that we focus on 
are debt held by the public.
    Mr. FEENSTRA. Yes.
    Mr. SWAGEL. So what Steve is saying is correct, the debt 
held by the public goes up.
    Mr. FEENSTRA. The debt held by the public, yes. But, I 
guess, what I am trying to say is that you still have got to 
sell Treasury bills, you still have got to sell T-bills.
    Mr. SWAGEL. That is right, to the market.
    Mr. FEENSTRA. To the market. All right. And when you do 
that, that is, in essence, getting a loan, that is going 
further into debt.
    Mr. GOSS. You are redeeming one loan and creating another.
    Mr. FEENSTRA. What I am trying to have everybody understand 
here is that we have got a problem, okay? We have got a 
problem. And I think we all agree to this that we have a 
problem. And there is a lot of insightful ways that we can look 
at this, but the fact of the matter is, is that, you know, in, 
what is it, 2032 now, the CBO's outlook--I think it is 2032, am 
I right, fair statement?
    Mr. SWAGEL. It is 2033.
    Mr. FEENSTRA. 2033.
    Mr. SWAGEL. The end of 2032----
    Mr. FEENSTRA. Right. So, Dr. Swagel, and so what is going 
to be the percentage cut per Social Security recipient right 
now at 2033?
    Mr. SWAGEL. So we have about 21 percent.
    Mr. FEENSTRA. Twenty-one percent. So what you are telling 
the public, I just want to make sure we are fair here, you are 
telling the public that they are going to see a 21 percent cut 
in their Social Security if we do nothing.
    Mr. SWAGEL. That is correct.
    Mr. FEENSTRA. Okay. Everybody get that? I just want to make 
sure the public gets that. Twenty-one percent cut in 2033, if 
we do nothing. So that means we have got to act, that means we 
have got to do something.
    Thank you, by the way, for holding this because this is 
very important.
    So what I did, I think the seniors--I created a Seniors 
Saves Act that creates an accurate forecast. I think right now 
the CBO, the 10-year outlook showing the outlays is not an 
accurate forecast because it just continues in full regardless 
of the trust fund's exhaustion.
    Can you talk about this a little bit, Dr. Swagel?
    Mr. SWAGEL. Yes, for sure. So under the Balanced Budget Act 
of 1985, our baseline projections are required to show outlays 
as if the trust fund continues even after it is exhausted, so 
the scheduled benefits.
    Mr. FEENSTRA. Yes.
    Mr. SWAGEL. We show both the schedule and payable, but the 
baseline by law shows the scheduled.
    Mr. FEENSTRA. Yes. And again, here's the problem: It is a 
false narrative, right? I mean, we are making assumptions here. 
You don't have to answer that.
    I just want everybody to understand that we have got to 
have accurate data. We have got to make sure the CBO is telling 
everybody, and just like I am telling everybody, by 2033, you 
are going to get a 21 percent cut in your Social Security if we 
don't do something. So you might want to tell your Congressmen 
and women, you better act.
    Thank you. I yield back.
    Chairman FERGUSON. I thank the gentleman from Iowa.
    Thanks again to each of you for being here. I would like to 
say--we have got one more member coming in before we wave the 
flag here, so we are going have one more.
    I was going to cut you off, but Mr. Larson insisted that 
you get your 5 minutes. So thank you, John, for that.
    So we will now recognize Mr. Estes for 5 minutes.
    Mr. ESTES. Thank you, Mr. Chairman. And thank you Mr. 
Larson for looking out for me. I appreciate that, my good 
friend.
    And I thank you all for being here today to talk through 
some of these issues that are so important for everyday 
Americans. You know, today's hearing obviously is critically 
important as both the CBO and the trustees have, on their most 
recent assessment, projected that Social Security's trust fund 
will be unable to pay full retirement benefits starting in 
2033. According to the projections, that means that tens of 
millions of seniors and their families who rely on the programs 
would experience immediate benefit cuts.
    Unfortunately, a lot of those folks are already 
experiencing cuts, thanks to the sky-high inflation that is 
19.9 percent since January 2021. And rising prices hurt those 
on a fixed income and just like so many of our seniors.
    You know, a key driver of inflation is an uncontrolled and 
insatiable desire to spend. Our debt now stands at $34.6 
trillion, and grows by $100,000 a second. It is simply 
unsustainable.
    Even though we have got our spending under control in 
Congress, we still have a problem. And discretionary spending, 
actually the spending that we get to vote on as Members counts 
for less than 30 percent of all government spending. And CBO 
projects that Social Security will eclipse all discretionary 
spending, including defense by 2029.
    So if we are going to make real changes to preserve Social 
Security, we have got to talk about responsible reform. I know 
in an election year there is a lot of rhetoric about how do you 
cut Social Security, but I think we all can agree we don't want 
seniors to suffer through that process. And the truth is, if we 
put our heads in the sand and do nothing else, American seniors 
who will suffer the most. As it stands now, in the next decade, 
if no action is taken, Social Security recipients will start 
receiving $0.75 on the dollar when insolvency is reached.
    I want to talk a little bit about, you know, what is the 
impact and how we are being impacted. And something that is 
obviously having an impact on Social Security is illegal 
immigration. Since President Biden took office, there have been 
more than 2.15 million encounters on the southwest border 
alone, and we can't be sure how many people have crossed into 
our country.
    Mr. Goss, how do the Social Security trustees account for 
the impact of illegal immigrations in your assumptions and has 
it been accounted for in the current Trustees Report?
    Mr. GOSS. Absolutely. We always have--we look at total 
immigration, both immigration subject to the legal limits and 
also undocumented immigration coming into the country. By the 
way, the undocumented are generally looked at as people who 
come across the border without documentation.
    Many of these people come to the country and eventually 
become legal permanent residents or may have children while 
they are here who will then be citizens. That actually 
contributes positively to the economy and to Social Security.
    So on the bottom line, really, immigration of all forms is 
actually a positive in the realm that we are in now where the 
birth rates in the country are as low as they are. So 
immigration is actually a positive.
    Mr. ESTES. It is positive in the short term before those 
individuals start taking benefits, right?
    Mr. GOSS. Well, it is positive also in the long term, 
because if we have more people coming into the country, whether 
they are initially undocumented or not, if they come in in 
their 20s or 30s, which is generally the age range for new 
immigrants, if they have children, then that adds to the future 
population. It adds to the growth of our population, which is 
very much a positive.
    Mr. ESTES. Right. I mean, we are a country of immigrants, 
so we want to continue to have, you know, legal immigration 
that has an impact and be able to come out of that shadow 
economy.
    Do you take into account any dealings with how many of 
those folks that have come here illegally and not had a legal 
right to cross the border, that more likely working in the 
shadow economy, that they are paying--paid cash under the 
table, in which case they wouldn't be captured, as far as being 
able to pay payroll taxes?
    Mr. GOSS. If people are literally paid cash then, of 
course, there is going to be no record of that towards benefits 
or towards their paying in payroll taxes. However, in many 
cases, where people are either undocumented or have come on a 
temporary visa and overstay it, they are not legal permanent 
residents, in many cases, those individuals will, through their 
employers, still be paying payroll taxes that go into the trust 
fund, and very likely they will never receive benefits.
    So in addition to the possibility they are having children 
on our shores, there is a possibility of that kind of 
immigration actually having a positive. We had a little 
actuarial note back in 2013 that walks through this in some 
detail.
    Mr. ESTES. Well, I am about out of time but, Dr. Swagel, 
did you have anything that you could include and talk about 
your assumptions?
    Mr. SWAGEL. Oh, okay. No. Just the same thing that, you 
know, we are looking carefully at immigration and the share of 
the immigrants who are paying into the system and the share who 
are collecting benefits. It is something we are working on 
carefully right now.
    Mr. ESTES. All right. Thank you.
    And, Mr. Chairman, I thank you for your indulgence. And I 
am out of time. I would like to ask more questions, but I will 
yield back. Thank you.
    Chairman FERGUSON. Thank you.
    Again, I want to thank our witnesses for being here today. 
And please be advised that members have 2 weeks to submit 
written questions to be answered later in writing. Those 
questions and your answers will be made part of the formal 
hearing record.
    With that, the subcommittee stands adjourned.
    [Whereupon, at 12:54 p.m., the subcommittee was adjourned.]
      

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                   PUBLIC SUBMISSIONS FOR THE RECORD

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