Chairman Kohl, Ranking Member Martinez, and members of the Committee. Social Security is the largest spending program of the federalgovernment, the largest tax paid by most workers and the largest sourceof income for most retirees. It also faces a significant long-termfunding challenge. For these reasons, I am glad you chose to hold this hearing and am thankful for the opportunity to testify here today.
In my testimony I wish to highlight three points.
First, Social Security's long-term shortfalls worsened significantly in the latest Trustees Report, and is expected to continue to worsen if reform is delayed.
Second, population aging, not rising per capita health care costs, is the principal driver of overall entitlement costs and the largest threat to the budget; and
Third, Social Security policy should encourage longer work lives and simplify the program's complex benefit formula.
Andrew G. Biggs is a resident scholar at AEI.