Social security reform may first target high-income earners
Social Security costs reach $1.5 trillion annually, and demographic changes threaten the program’s survival.
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The trust fund, which supplements the payroll taxes that come in to pay monthly Social Security benefits, is projected to run out in the last three months of 2032, which would force an immediate across-the-board 22% benefit cut, the board’s latest report said.
For the past 16 years, the cost of Social Security’s retirement program has exceeded the amount it receives from payroll taxes, forcing it to draw down its trust fund reserves to make up the shortfall. Last year, the trust fund was projected to run out in 2033, but that deadline was moved up in August to the end of 2032 under tax provisions in the One Big Beautiful Bill Act, passed nearly a year ago.
If Congress does not act and allows the trust fund to be emptied, the program will only pay out what the government collects in taxes. The Nonprofit Committee for a Responsible Budget estimates that on average, beneficiaries will lose about $500 a month.
“This should be a wake-up call. Congress needs to act,” said Myekia Minter Jordan, chief executive of AARP, a nonprofit, nonpartisan group representing seniors. “Americans have worked hard and paid into Social Security throughout their lives, so it makes sense that they would rely on it in retirement.”
Why is November important to Social Security?
Analysts said the senators elected in November will be in the group that would either deplete Social Security’s trust fund or enact reforms.
“While these bankruptcy dates may seem abstract and far away, the reality is that senators elected in 2026 will be in office when Social Security reaches bankruptcy status,” said Margaret Spellings, president and CEO of the Bipartisan Policy Center. “The question is no longer whether these challenges need attention, but whether Washington will find the will to act.”
According to the nonprofit, nonpartisan Peterson Foundation poll, conducted jointly by the Democratic Party’s Global Strategy Group and the Republican Party’s North Star Opinion Research, in late May:
- 96% of voters nationwide want candidates to clearly explain their plans to prevent automatic cuts to Social Security benefits.
- This includes 96% of Democrats, 92% of independents, and 97% of Republicans.
- It also includes at least 94% of voters in the 18-29 and 18-29 age groups. 30-44; 45-54; 55-64; and over 65 years old.
“This research shows that voters across party lines overwhelmingly want solutions from candidates this election season,” said Michael Peterson, the foundation’s chief executive officer.
How can Congress protect Social Security benefits?
It’s not that there’s a lack of ideas to “fix” Social Security so that benefits don’t get cut, there’s just a lack of will. In the past few years, these have included:
- “Six-digit limit,” or capping annual Social Security benefits for married couples at $100,000.
- Raise or eliminate the cap on income that can be taxed to fund Social Security benefits. In 2026, only income up to $184,500 will be taxed to pay benefits.
- Raise payroll taxes by 12.4% on your income that goes towards paying Social Security. Payroll taxes are typically split 50-50 between you and your employer, so you each pay 6.2%.
- Raise your Full Retirement Age (FRA) to maximize your Social Security benefits. Until the 1980s, age 65 was considered the FRA, but in 1983, when Social Security faced bankruptcy, Congress passed legislation to gradually raise the full retirement age to 67. In 2026, the FRA will be 67 years old, and some researchers believe it should be raised again.
“As in 1983, lawmakers can enact reforms that guarantee the fiscal health of the program for another 75 years or forever,” wrote Stephen Nunez, director of stratified economics at the progressive Roosevelt Institute. “In fact, we could have done so (at significantly lower cost) at any point in the last 20 years.”
“Congress has many options to close the deficit and secure the Social Security Trust Fund for future unforeseen developments. The question is not whether Social Security can be rebuilt, but who will pay for it when it is rebuilt.”
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday..
