Senators Push for Big Change to Social Security to Save the Program

Senators are working to protect the Social Security benefits that are a major component of millions of Americans' retirement plans. Senator Elizabeth Warren (D-MA) and Senator Bernie Moreno (R-OH) published a joint op-ed on June 23 highlighting Social Security's looming insolvency and urging Congress to take action to save the program.

The op-ed proposed a potential solution of lifting the Social Security payroll tax cap. Lifting the cap would be a significant change for the program, and it's one potential solution to avoiding an automatic benefits reduction.

The Social Security insolvency problem

The 2026 Social Security Trustees report projects that the Social Security trust fund may be depleted by the fourth quarter of 2032. That new projection suggests the fund may run out one quarter earlier than projected in 2025.

If the fund runs out, the revenue generated by payroll taxes would only be sufficient to pay 78% of scheduled benefits. Benefits would immediately be cut by 24%, which amounts to a reduction of about $500 in benefits per month, which is more than an average retired household spends on groceries for a month. While benefits wouldn't end, the reduction in their amount could significantly impact vulnerable Americans, including those who entirely depend on Social Security benefits to live.

How the payroll tax cap works

Payroll taxes help partially fund the Social Security program, but there's a cap on the amount of annual income that's taxed. For 2026, a 12.4% tax is only applied to income up to $184,500. Income beyond $184,500 is exempt from Social Security taxes, even if individuals make significantly more.

Because of the tax cap, low- and mid-earners must pay taxes on their entire income, but high earners only pay taxes on a portion of their income.

"This is a no-brainer," the Senators write. "The wealthiest Americans, who have benefited the most from America's opportunities, should contribute the same percentage of their income as a factory worker in Chillicothe, Ohio, or a teacher in Worcester, Mass."

The push to eliminate the tax cap

The op-ed presents eliminating the payroll tax cap to increase revenue for the Social Security program, arguing that the tax cap is structurally unfair. "Why should a middle-class nurse pay a larger share of her paycheck than a wealthy corporate lawyer?" the op-ed poses. "This is doubly unfair in an economy in which top earners' wages, over time, have pulled far ahead of those of the average worker."

The op-ed argues that eliminating the tax cap may help preserve Social Security's structure in which workers contribute to the program from their paychecks, helping ensure those same workers may later retire.

What eliminating the tax cap might do

According to an analysis performed by the Peter G. Peterson Foundation, eliminating the tax cap might raise an additional $3.4 trillion in revenue for the program from 2026 through 2035. The change might close 48% of the program's 75-year funding gap.

The idea has gained bipartisan support, and a 2025 Bipartisan Policy Center poll found that 65% of Democrats and 62% of Republicans support the idea of lifting the tax cap.

The argument against eliminating the tax cap

Critics of the idea, including the Tax Foundation, argue that lifting the cap would increase taxes on high earners and wouldn't be enough to fully restore long-term solvency to the program.

Changing the tax cap structure would also alter the program's earned-benefit design, in that it would tax income without providing a corresponding benefit increase for those taxpayers.

Other potential solutions for Social Security

Lawmakers have proposed numerous other solutions to address Social Security's insolvency. Republicans have proposed raising the retirement age, prompting Americans to delay their retirement because of today's longer life expectancy.

Lawmakers could also potentially reduce Social Security benefits for workers earning higher incomes, since such workers are more likely to have their own savings and retirement investments to support them during retirement.

It's also possible for lawmakers to explore implementing Social Security taxes on investment income, like capital gains and dividends, which currently isn't subjected to a Social Security tax.

Bottom line

The idea to eliminate the payroll tax cap sits alongside the House Cole-Suozzi commission bill, which calls for the creation of a bipartisan, independent commission of 13 members to identify solutions to Social Security's long-term solvency. It's the most congressional activity on the topic of Social Security solvency in years, as the 2032 trust fund depletion deadline now looms just six years out. Lawmakers are increasingly feeling the pressure to identify and implement a solution to fix the program.

Keep in mind that the cuts to Social Security reflect what might happen if lawmakers don't implement a solution, and the legislative activity surrounding the program is encouraging. Even so, it's a good idea to revisit your retirement budget and recalculate it based on a reduced Social Security benefit to check up on your retirement readiness.