Social Security's retirement trust fund could be depleted by the fourth quarter of 2032, according to a new annual report from the program's trustees. That projection is several months sooner than previous estimates, and it has renewed pressure on Congress to act.
When the Old-Age and Survivors Insurance fund runs out, only 78% of scheduled benefits would be payable to retired workers, their spouses and children, and survivors of deceased workers, according to CNBC. Millions of Americans depend on those monthly payments.
The revised timeline has pushed a bipartisan group of lawmakers toward a proposal to lift the cap on earnings subject to Social Security payroll taxes. Currently, earnings up to $184,500 are subject to those taxes. Once a worker's earnings hit that cap, they stop paying into the program for the remainder of the year. Workers earning $1 million in annual wages stopped paying Social Security payroll taxes for 2026 as early as March 9, according to the Center for Economic and Policy Research.
On Tuesday, Sen. Elizabeth Warren, Democrat of Massachusetts, and Sen. Bernie Moreno, Republican of Ohio, co-wrote an op-ed stating they are working together on legislation to lift the payroll tax cap.
At a Senate Finance subcommittee hearing Wednesday focused on the future of Social Security, Sen. Bernie Sanders, Independent of Vermont, said it's time to "ask the wealthiest people in this country, who have never had it so good, to start paying their fair share of taxes."
Sanders has introduced the Social Security Expansion Act, which is co-sponsored by Warren and nine other Senate Democrats. The bill would raise taxes on wages, salaries, and self-employment earnings over $250,000 and also increase the net investment income tax. It includes provisions for certain benefit increases.
A separate proposal from Rep. John Larson, Democrat of Connecticut, called the Social Security 2100 Act, would apply payroll taxes to income over $400,000 and also provide benefit increases. That bill was introduced in 2023 and drew 189 Democratic co-sponsors, but has not been reintroduced in the current session of Congress.
Moreno's involvement as a Republican co-author was described as an "enormous breakthrough" by Larson in a statement.
The payroll tax cap is adjusted annually to track national wage growth. That means any gap between the current cap and a higher threshold where taxes would resume would gradually close over time, depending on how wages grow.
Social Security reform passed in 1983, when the program was also running low on funds, was designed to provide 75 years of solvency, which would have extended the program's finances to 2058. That timeline was shortened, the trustees' report indicates, largely due to rising income inequality and the effects of the Great Recession.
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