Instructions: Several reforms have been suggested to solve the funding issues with the Social Security program. Write a policy memo (750-1000 words) discussing the pros and cons of three reforms – two listed below and one of your choosing. For this memo, you are welcome, though not required, to include arguments from outside readings – make sure to cite any sources you use. Pay particular attention to:
Efficiency implications: through potential behavioral responses to the reform
Equity implications: differential impacts by demographic group (income, race, age, etc.)
Reform 1. Discuss the impact of the following two changes to the retirement age (hint: which do have different implications)
Increase Early Entitlement Age from 62 to 65
Increase Full Benefits Age from 67 to 70.
Reform 2. Discuss the impact of the following two changes to the benefits generosity
Reduce benefits for beneficiaries with high asset levels, i.e., wealth
Reduce the rate at which the Average Indexed Monthly Earnings are converted to the Primary Insurance Amount for the top bracket (i.e., AIME over $4,917) from $0.15 to $0.10
Reform 3. Choose a third reform suggested in the reading or from your own research
Format: Please include the following sections to your memo and write in the style that is not too technical or jargon-y; for example, similar to the three NPR pieces we have heard in class – informative, but engaging for an audience with limited prior knowledge of the policy topic.
Structure:
Introduction: policy context of need for Social Security reform
Reform 1
Reform 2
Reform 3
Conclusion: your summary of the issues discussed
The grading rubric and reference reading is attached. This reading is from Jonathan Gruber, Public Finance and Public Policy, 7th edition. Please cite if using.
