The commission’s report was released in January 1983 and became the basis for the Social Security Amendments of 1983 that was signed into law in April of that year.

Why It Worked

There were several important dynamics that contributed to the commission’s success, which may hold important lessons for lawmakers today:

• Urgency. The OASI Trust Fund was months away from depletion. If no action had been taken, beneficiaries would not have received their benefits on time. In 1981, there was not a statutory mechanism for across-the-board cuts as there is today; rather, benefits were delayed until there was enough revenue accumulated to cover the scheduled benefits. That meant beneficiaries could have gone weeks without their benefits. The emergency was clear and imminent, and lawmakers took it seriously.
• Commitment. The commission met nine times throughout 1982, finding agreement on the magnitude of the problem but difficulty on consensus recommendations. That pushed a sub-group of the commission — Senator Dole (R-KS), Senator Moynihan (D-NY), Robert Ball (Commissioner of the Social Security Administration), Alan Greenspan (economist and 13th chairman of the Federal Reserve), and Representative Conable Jr. (R-NY) — to accelerate negotiations with buy-in from top White House officials. The ultimate package they presented to the broader commission was endorsed by 12 of the 15 members, who then presented it to President Reagan in January 1983.
• A balanced, bipartisan approach. Commissions can remove a heated political issue from the entrenched partisanship of Congress. The Greenspan Commission took advantage of that dynamic by bringing together respected leaders from inside and outside of Congress and the Administration who pursued a balanced reform package with both revenue and spending components. This approach of shared sacrifice gave the full recommendation legitimacy and momentum that helped it overcome partisan gridlock.
• Gradually phased-in solutions. A key attribute of the Commission’s recommendations and subsequent amendments by Congress was to phase-in tax and benefit changes so as not to harm retirees or those nearing retirement. For example, the combined employer-employee payroll tax increase phased in over seven years, from 10.8 percent in 1983 to 12.4 percent in 1990, where it remains today. The amendment included by Congress to increase the full retirement age (FRA) from 65 to 67 did not begin to phase-in until 2000 and will not be fully phased in until 2027.
• Bipartisan trust. Key lawmakers from both the Democratic and Republican parties embraced taking on Social Security reform. Democratic House Speaker Tip O’Neill worked closely with Republican President Ronald Reagan to get their parties on board, and they privately agreed to fully accept the bipartisan commission’s recommendations. Additionally, Senator Bob Dole leveraged both his role as a commission member and chairman of the Senate Finance Committee to prominently voice support. Because respected leaders from both parties, Congress, and the White House were willing to take political risks, rank-and-file lawmakers felt confident enough to support as well. And even though Social Security has been coined the “third rail of politics,” every member of Congress on the Greenspan Commission who sought re-election [indeed] won.

Where Social Security Stands Today

The 1983 reforms helped extend the program’s solvency for decades. In the 1984 Trustees report following the enactment of the 1983 amendments, Social Security was not projected to be exhausted in the 75-year projection period, but given legislative, demographic, and economic changes since, it was not enough to sustain the program in perpetuity. No comprehensive reforms have been enacted in the four-plus decades since the Greenspan Commission, though both the W. Bush and Obama Administrations tried to utilize commissions to advance solutions. Now, the OASI Trust Fund is projected to be depleted by 2032 — the closest the trust fund has come to depletion since the crisis that prompted the Greenspan Commission. The projected depletion date is so close that the Senators elected in the 2026 midterms as well as the President elected in 2028 will be serving their terms when the program is unable to pay out full benefits.

The fiscal challenge is also larger today in dollar terms compared to 1983, making it even more difficult compared to then. That is partially due to worsening demographic conditions: the worker-to-beneficiary ratio has declined dramatically, and longer life expectancies mean benefits are paid for a longer period. Those outlay-increasing conditions coupled with no increased revenue collection have led to widening deficits and looming trust fund depletion.