How Would a Sliding Scale Benefit Formula Work?
Currently, Social Security benefits keep pace with the standard of living of the workers who pay into the system. This is accomplished by adjusting the benefit formula to the level of wages that workers earn. If benefits were instead adjusted by prices, which rise more slowly than wages, benefits would be less than under current law. Benefits would fall further and further behind a workers pre-retirement standard of living, and provide less and less adequate income in retirement. Future retirees would receive benefits based on todays standard of living, no matter how much our economy grows and living standards rise. Under a sliding scale benefit formula, benefits would still fall behind the standard of living for most workers. This is because it would subject high earners to full price-indexing, and hit the middle class with a blend of wage- and price-indexing. Only the lowest-earning workers would be exempt from cuts. For example, once fully phased in: A worker who had earned $37,000
