Fixing Social Security: A CED Policy Update

This report presents CED's plan for strengthening and modernizing the Social Security system. The plan acknowledges that some changes must be made to Social Security to prepare it for the challenges that lie ahead, and to make it more attractive to a new generation of workers; but CED also recognizes that the essential safety net provided by Social Security must be preserved. CED recommends creating a two-tier system that would both restore the fiscal solvency of Social Security and convince young contributors who perceive a low and diminishing return on their contributions that Social Security will provide a meaningful benefit to them. The first tier would return the current basic system to long-term fiscal solvency through relatively modest adjustments. The second tier would "add-on" a new system of individually controlled personal retirement accounts to increase the rate of return for younger workers.