MW A flat $1,660 monthly Social Security benefit for everyone? It's one proposed CBO remedy.

By Brett Arends

Even this radical rethink would only pay for about 12% of the cost of the tax cuts currently being considered by Donald Trump and congressional Republicans

Replacing all future Social Security benefits with a flat monthly payment of $1,660 per retiree - and $2,250 for a couple - is among the policy options offered by the Congressional Budget Office to help rescue the program's finances.

That radical action, which would be sure to produce a massive political backlash across the spectrum, would slash benefits for about three-quarters of future beneficiaries, while raising them for about one-quarter, the CBO says. The average benefit for all retirees and survivors is currently about $1,900 a month.

Such a change would make the program look more like the state pensions in many other developed countries, where the emphasis is on providing a basic income floor in retirement for everyone.

If such a drastic move seems like a product of fantasy, it shouldn't. Something radical is likely to be forced on the government and the public, and soon, based on the current trajectory. Social Security is due to run out of money in a decade, and, according to its own trustees, to be made whole, it needs a $22.6 trillion cash injection today, equal to about three-quarters of annual U.S. GDP.

Yet, according to the CBO's own numbers, even this drastic surgery on the Social Security program would only pay for about 12% of the cost of the tax cuts currently being considered by the president and Congress.

The total savings from reimagining Social Security as a flat benefit equal to 125% of federal poverty levels would be just $607 billion over 10 years or, to put it more simply, about $60 billion a year.

The total savings from reimagining Social Security as a flat benefit equal to 125% of federal poverty levels would be just $607 billion over 10 years or, to put it more simply, about $60 billion a year.

That compares with a total cost of the tax cuts being considered of between $400 billion and $550 billion a year, depending on whom you ask, how much they end up cutting, and what you figure happens to the interest payments on the ballooning national debt.

The bad news extends to most of the other policy options presented by the CBO. Cutting the annual cost-of-living adjustments (for Social Security and other government programs) to match a lower inflation measure could save just $28 billion a year. Raising the retirement age to 70 would save just $10 billion a year over the next decade, even if in the long run it would save much more. Even the most drastic tax increases, like imposing the 12.4% Social Security tax on all incomes over $250,000, or raising the Social Security payroll tax for everyone by two full percentage points, would raise only about $145 billion a year, says the CBO. Those, still, are a fraction of the costs of the planned tax cuts.

Even if we take the lowball estimate for those cuts, at $400 billion a year, the nonpartisan deficit hawks at the Committee for a Responsible Federal Budget now warn that the tax cuts on the table in Washington are roughly equal in size to the entire Social Security shortfall over the next 10 years.

"Policymakers are considering an extension of expiring parts of the Tax Cuts and Jobs Act (TCJA) as part of a reconciliation bill, which could reduce revenue by nearly $4 trillion through Fiscal Year (FY) 2034," the CRFB writes. "We estimate that this is as large as the entire Social Security shortfall, not only over the next decade but over the long term. In other words, extending the TCJA would be the fiscal equivalent of doubling Social Security's projected cash shortfall."

The context for this is that the national debt has nearly doubled since 2016, from $19 trillion to $36 trillion, and now exceeds 100% of annual gross domestic product - a ratio last seen, briefly, in 1946. The Congressional Budget Office sees it hitting a record 118% of GDP in a decade and 156% of GDP - a level never before seen, or even imagined - by 2055. That's without counting any of the proposed tax cuts.

That also excludes the extra amounts needed for Social Security and Medicare. The hole in the Social Security trust fund is estimated by the trustees at $23 trillion, but that figure is calculated on the assumption that it's paid off today. If it will be paid off only over time, possibly not even starting until the trust fund runs dry in 2035, the sum would be much higher.

Meanwhile, President Donald Trump's approach to all this demonstrates political cunning. He is insisting today that Social Security and Medicare be "protected," while fighting for massive increases in the deficits. Eventually these deficits will force huge changes to Social Security and Medicare, possibly including huge cuts to the benefits for many and radical changes, such as a lower universal benefit. By the time those happen, Trump will have left office.

-Brett Arends

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May 20, 2025 15:19 ET (19:19 GMT)

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