by Calculated Risk on 2/09/2005 02:32:00 PM

A report from The Center for Retirement Research at Boston College analyzes the impact of the Bush Administration's proposed Price Indexing on Social Security. Their conclusion:

"The conclusion that emerges from this review of price indexing is that it creates a potentially unstable system. Price indexing does more than simply cut benefits below the amounts scheduled under current law, it cuts them more each year. Eventually benefits will become trivial relative to workers’ earnings. If the goal is to restore balance to the Social Security program by cutting benefits, an across-the-board cut of 20 percent for those under age 55 or an increase in the normal retirement age to 70 would achieve the same result over the next 75 years without putting the system on a downward trajectory."