    [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

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    57-014                  WASHINGTON : 2024

    -----------------------------------------------------------------------------------

                          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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