What it will take to fix Social Security

Social Security is the largest single program in the federal budget. A recent blog post from the Congressional Budget Office (CBO) reports that in 2017, Social Security benefits will cost about 4.9 percent of total U.S. GDP. Over the next 30 years, that will grow to 6.3 percent as millions of boomers retire and collect benefits.

The CBO calculates that current annual revenues from Social Security taxes equal about 4.6 percent of GDP, and it expects that amount to remain flat or decline slightly to 4.5 percent over next 30 years. The main reason for the lack of growth in Social Security taxes relative to GDP is that in the decades to come, more Americans will be retired and fewer will be working and paying taxes.

As a result, the gap between benefits paid and revenues collected will grow from its current rate of 0.3 percent of GDP to 1.8 percent by 2047.

The CBO analyzed costs for 36 possible changes to Social Security that would help eliminate the gap. These possible changes fall into five categories:

• Increase revenues