Understanding Progressive Indexing
The Social Security system is currently generating a substantial revenue surplus, but as the baby boomers start retiring the surplus starts to shrink, and by 2018 the system is running a deficit. Simultaneously increasing the number of retirees per worker and the inflation-adjusted benefits going to each retiree would put an unprecedented strain on the system and require substantial reform. Given that we cannot do anything about demographics, constraining the inflation-adjusted increases in benefits for high-wage earners is a logical place to turn to ensure future solvency.