Social Security faces a $16.8 trillion long-term funding gap, which congressional Democrats have vowed to fix. But Social Security reform is far more than simply a budget challenge. Social Security is the largest federal spending program, the biggest tax most workers pay, and the biggest source of income for most retirees, and so it affects how people work and save. A new economic analysis from the Penn Wharton Budget Project shows that how we fix Social Security can either grow the economy or shrink it.

Most Social Security reform proposals simply tweak the tax or benefit formulas, with Democrats and Republicans having predictable preferences regarding what to change. But after two decades of working on Social Security, I believe a 1930s-era program needs more fundamental updates for the 2030s and beyond. If we invented Social Security today, it would look much different from the system we inherited from the Great Depression.