Sen. Durbin Believes Congress Can Compromise On A Plan To Save Social Security

The following op-ed is by Senator Dick Durbin (D-Illinois). He believes that though an open debate the current Congress can come together and find a workable plan to fund Social Security far into the future. I'm not sure that's true, but he deserves to have his say. Here is what he has written: 

Seventy million Americans count on Social Security to afford food, medication, housing and utilities. It’s a bedrock promise to Americans that, after a lifetime of hard work, they will have a secure retirement.

The program is there for the grandfather who worked his whole life trying to provide for his family but has seen his savings run out. Or the widowed mother who stayed home to raise four children and is counting on Social Security for retirement income.

But according to a report published last month by the Social Security Board of Trustees, the program will face a shortfall in just six years, when its trust fund runs out. In 2032, Social Security will only be able to pay 78% of benefits. That means seniors and other beneficiaries across the country would see an average cut of $450 per month. For many, losing $450 means rent or utility bills or a prescription is no longer affordable. And that cut would especially hurt the nearly one out of five Social Security beneficiaries with no other source of income.

Some critics believe the most prudent course of action is to delay the legislative process of extending solvency. They believe that a more favorable balance of power in Washington will yield their desired policy outcome. But if Democrats refuse to act until we control both chambers of Congress and the presidency — a feat that would take at least two election cycles — we run the risk of skating even closer to the insolvency cliff.

Meanwhile, delaying action makes the policy choices more drastic. Had Congress acted in 2009, a payroll tax increase of less than 2% would have kept Social Security solvent for 75 years. Today, payroll taxes would have to increase by nearly 4.5% to close that gap.

Republicans and Democrats alike were elected to make responsible decisions for Americans. If we want real solutions to rescue Social Security before it is too late, we need buy-in from both parties.

Sixteen years ago, Congress had an opportunity to preserve Social Security through the bipartisan group known as the Simpson-Bowles Commission. I served on that panel. The plan we came up with was far from perfect, but it would have secured the program an additional 75 years of solvency. Ultimately, it failed to garner enough support, and our inaction led to today’s challenge.

It’s easy to be cynical about the problem. That’s why one-third of young Americans think Social Security will not be around for them when they retire. Faced with the skyrocketing costs of attending college, buying a home and starting a family, they feel the deck is unfairly stacked against them.

But we do not need to resign ourselves to a doomsday scenario. Nor do we need to wait for the elusive “perfect political moment.” Many of my colleagues have worked for years on serious, meaningful proposals to address the looming insolvency cliff. Yet, they’ve never received votes on the Senate Floor. We do not have a shortage of ideas; we have a lack of will.

Recently, with the support of a bipartisan group of senators, I introduced legislation to ensure Congress finally takes up this challenge. The PROMISE Act would open the Senate and House to debate and vote on different proposals in a transparent and bipartisan way. Under my bill, the fixes proposed in recent years would get the chance for full debate and consideration.

Some of my closest allies may think this notion — restoring the Senate to its long-forgotten moniker of the most deliberative body on earth — is too radical. I respectfully disagree.

Under our bipartisan plan, we would gather public input and testimony, the Senate and House committees would hold hearings, mark-up and adopt amendments, debate and consider alternate proposals on the floor — for days and days if necessary. Any measure would still need a filibuster-proof 60 votes on the floor. Such extensive deliberation is almost unheard of in today’s Senate, but it is sorely needed.

And we would do it all in a transparent way. Amendments for consideration would be published in the Congressional Record — a far cry from the backroom, late-night, secret deals for which Capitol Hill is often critiqued.

While some may disagree with this approach, I trust we share the goal of protecting and preserving Social Security for all. Americans sent us to Congress not to observe problems, but to solve them, and there is no greater long-term challenge before Congress than saving this program. Let’s not run away from our responsibility.

Senators Warren And Moreno Have A Plan To Save Social Security

The following is by Senators Elizabeth Warren (D-Massachusetts) and Bernie Moreno (R-Ohio) in The New York Times:

One of us is a Republican from Ohio who built a business that generated hundreds of jobs. The other is a Democrat from Massachusetts who built a career protecting consumers from financial tricks and traps.

We don’t agree on everything, but here’s one thing we do agree on: Congress must act now to save Social Security for generations of Americans to come.

Social Security is a core component of our nation’s promise — a covenant between the federal government and Americans who pay into it throughout their working years so they can retire with dignity.

That promise is at risk of unraveling. For years, seniors in Ohio and Massachusetts have told us how concerned they are about the future of Social Security. A new report from the trustees who oversee the Social Security Trust Funds shows they are right to worry: Unless Congress acts, the fund from which most Social Security beneficiaries are paid will be significantly depleted by late 2032. After that, Social Security benefits could be cut by more than 20 percent.

That’s just six years away. Instead of cutting benefits for the retirees who count on Social Security, we need to take bipartisan action to protect those benefits, reward work and restore fairness.

That starts with a common-sense solution: lifting the Social Security payroll tax cap.

For 2026, the payroll tax cap, or taxable maximum, is $184,500. Workers and their employers each pay 6.2 percent on wages up to that amount (self-employed individuals pay 12.4 percent). Today, the maximum Social Security withholding for one worker is $22,878, or 12.4 percent of $184,500. Not a penny more, even if an individual’s salary far exceeds $184,500. Since the vast majority of Americans make less than that, most people are paying Social Security taxes on 100 percent of their earnings while the highest earners are paying on only part of theirs.

Why should a middle-class nurse pay a larger share of her paycheck than a wealthy corporate lawyer? This is doubly unfair in an economy in which top earners’ wages, over time, have pulled far ahead of those of the average worker.

According to one estimate, eliminating the payroll tax cap would inject around $3 trillion into the program over the next 10 years. Lifting the cap so that all income is treated the same would generate substantial revenue that would extend the solvency of Social Security for another generation.

Our plan would also help to safeguard Social Security’s earned-benefit structure, in which workers make contributions to the program from their paychecks. This structure has delivered a basic level of retirement certainty for generations. One 2025 poll found that 65 percent of Democrats and 62 percent of Republicans support lifting the cap, “including a significant majority of respondents with annual household income over $200,000.”

This is a no-brainer: 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.

Most Americans work into their 60s or 70s. Throughout their working lives, they pay into Social Security with the understanding that it will help them support themselves in retirement. With rising prices and artificial intelligence causing economic uncertainty for the future, Social Security must remain a stable foundation to help retirees afford life’s basic necessities.

Social Security was created by overwhelming bipartisan congressional majorities. Today, members of Congress from both parties must come together again to save it. That’s why the two of us are working together on legislation to remove the cap on Social Security taxes and extend the solvency of our retirement system. Americans deserve nothing less. Preserving the American dream for our children and grandchildren depends on it.

The REAL Reason For The Social Security Funding Shortfall

In the following post, Robert Reich tells us the real reason for Social Security's funding problem:

The trustees of the Social Security fund said Tuesday that the fund will be depleted by late 2032, a year earlier than the trustees’ projection last year of 2033. If nothing is done, benefits will automatically be cut six years from now.

The common understanding is that Social Security’s shortfall is due to the huge postwar baby boom, now retiring, and to America’s increasing life expectancy. The usual recommended fix is to reduce Social Security benefits or raise the age of eligibility. As Speaker of the House Mike Johnson, warned Monday, “entitlement programs” like Social Security “have to be adjusted and fixed.” He said Republicans will introduce a plan to do that. Brace yourselves. 

I used to be a Social Security trustee, and I call bullsh*t.

The baby boom can’t be blamed for Social Security’s shortfall. The Greenspan Commission, which in 1983 recommended the reforms that Congress then made — raising Social Security payroll taxes and also raising the eligibility age for collecting Social Security benefits — knew all about the baby boom and figured it into its calculations. (Early boomers like me can now start collecting full benefits at age 66; late boomers born after 1960 have to wait until they’re 67 to collect full benefits.)

Americans’ increasing life expectancy isn’t at fault, either. While wealthier Americans are living longer, that’s not the case for lower-income Americans. The Urban Institute estimates that life expectancy in the top 20 percent of income-earners is 91 years for people born in the 1990s, four years more than people born in the 1950s. Yet the life expectancy in the lowest 20 percent of income-earners is fewer than 80 years. 

So what’s the real cause of the Social Security shortfall? What did Greenspan’s commission fail to predict? Widening inequality.

Remember, the Social Security payroll tax applies only to earnings up to a certain cap. This year, that cap is $184,500. Earnings at or below this amount are taxed at 12.4 percent. The cap rises every year according to a formula roughly matching inflation.

Back in 1983, the cap was set so the Social Security payroll tax would hit 90 percent of total income in America. That 90 percent figure was built into the Greenspan Commission’s fixes. The Greenspan commission assumed that, as the cap rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 83 percent of total income in America. It went from 90 percent to 83 percent because a steadily larger portion of the nation’s total income has gone to the top.

In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today, the top 1 percent takes in more than 20 percent.

This year, someone earning $1 million in wages stopped paying any Social Security payroll tax at the beginning of March. Jeff Bezos probably stopped a few minutes past midnight on January 1. Elon Musk, a few seconds after midnight on January 1. (In point of fact, Bezos, Musk, and other robber barons of this Second Gilded Age get all the cash they need by borrowing against their fortunes, rather than bother with pesky wages, so they probably pay a pittance in Social Security taxes.)

Logically, then, to get back to 90 percent, the ceiling on income subject to the Social Security payroll tax has to be raised. 

If all income in excess of $400,000 were subject to the Social Security payroll tax, Social Security’s solvency would be guaranteed forever. We could also expand Social Security benefits. 

So there’s no reason even to consider reducing Social Security benefits or raising the age of eligibility. The logical and necessary response is simply to raise the cap, Mike Johnson and other Republican shills for the oligarchs to the contrary notwithstanding. 

Additional background:

Social Security is America’s most effective anti-poverty program. Last year, it lifted 23.5 million Americans out of poverty, including 16.5 million seniors. Before its creation, about half of our nation’s seniors were living in poverty. Today their poverty rate is just 10.3 percent. Without Social Security, nearly 4 in 10 seniors would have had incomes below the official poverty line.

Hollowing out of private pensions makes Social Security all the more important. One in 5 Americans 50 and older have zero retirement savings. Meanwhile, the average Social Security benefit at the start of last year was $1,975 a month ($23,700 annually).

Social Security is also the federal government’s biggest children’s benefit program through its disability and survivors’ benefits. In 2024, 1.7 million children received Social Security benefits, and the vast majority are eligible to receive survivors’ benefits if a parent were to pass away. Additionally, millions more children are part of a household where all or part of the household income comes from Social Security. Social Security is estimated to lift close to 1 million children out of poverty each year.

Other fixes that have been introduced in Congress:

1. The Social Security Expansion Act

Senators Bernie Sanders and Elizabeth Warren have introduced this plan for several Congresses. (It is cosponsored by Budget Committee Members Merkley, Whitehouse, Van Hollen, and Padilla.)

 

The bill imposes Social Security taxes on wages above $250,000 and applies the same 12.4 percent rate to capital gains and business income. That would boost benefits for almost all retirees by $200 per month, using a more generous measure of inflation to calculate the cost-of-living increase, and setting a minimum benefit at 125 percent of poverty. When estimated in 2023, it achieved 75-year Social Security solvency solely by increasing taxes on incomes above $250,000.

2. Medicare and Social Security Fair Share Act

Sen. Whitehouse and Rep. Boyle introduced this bill starting in the last Congress. Budget Committee Member Van Hollen is a co-sponsor. It adopts the tax increases of the Sanders bill, adjusted to start at $400,000. The bill has no benefit increases, so it significantly overshoots solvency, and there would be extra revenue. The bill achieves 75-year solvency for both Social Security and the Medicare Hospital Insurance trust fund.

Social Security Funding Can Be Fixed (If Republicans Are Voted Out Of Power)

 

The following post is by economist Paul Krugman:

On Tuesday the Social Security Trustees released their latest report on the system’s finances. The numbers didn’t change much: Unless something is done, the Old Age Survivors and Disability Insurance (OASDI) program, Social Security’s official name, will be unable to pay full benefits starting in either 2032 or 2034, depending on some technical issues. That’s not far away: If the Trustees are right, the prospect of a Social Security crisis will loom over the next presidential administration.

It’s important to understand, however, the nature of the looming crisis. It won’t be an economic crisis. It won’t even be a serious fiscal crisis. Whatever you may have heard, Social Security isn’t in danger of going bankrupt.

What we’re facing, instead, is potential political crisis. Congress and the White House could easily take action to sustain America’s retirement system. But given the current state of our politics, there’s no guarantee that they will.

There is a widespread misunderstanding of how Social Security works. While Social Security was designed to look like a pension fund, it isn’t. A pension fund pays benefits out of a stock of assets it has accumulated over time. In contrast, Social Security operates as a government transfer program, like food stamps or Medicaid.

Now, unlike food stamps — but like the highway trust fund — Social Security is on paper supported by a dedicated tax, the payroll tax, that is assigned to that program. But I say “on paper” because from an economic point of view assigning the payroll tax to Social Security is just an accounting convention. What matters for the U.S. economy is the overall balance between government spending and government revenue, not the difference between one type of spending and one source of revenue. So there’s no inherent economic significance to the fact that by 2034 payroll tax receipts will be insufficient to cover promised benefits.

There is, however, a legislative issue. As long as the Social Security Administration can pay benefits out of payroll taxes and its cash reserve, there’s no need for Congress to vote each year to authorize benefits — they just keep going out until further notice. However, once those resources become insufficient, benefits will fall —by 17 percent according to the Trustees — unless Congress passes new legislation that “tops up” Social Security’s finances.

Yet the current administration and Republican party are such extremists that there is a real risk that Social Security will be held hostage on behalf of their goals. If this should come to pass, the hostage-takers will claim that shoring up Social Security is unaffordable.

Right on cue, Mike Johnson, the Trump-sycophant Speaker of the House, declared on Monday that “entitlement programs” like Social Security “have to be adjusted and fixed,” and that Republicans will introduce a plan to that effect next year.

But this is a ploy, because while the cost of maintaining Social Security benefits at their promised level isn’t trivial, it is in fact affordable. According to the Trustees’ report, the actuarial balance of OASDI up through 2050 — the amount of additional funds it would need to keep paying full benefits for the next 25 years — is 1.06 percent of GDP. To put that number in perspective, the Trump administration proposes increasing military spending next year by $420 billion, equivalent to about 1.4 percent of GDP – without any discussion of whether that’s affordable

Yet how did we get to the point where Social Security will need to be topped up? The main answer is that we have an aging population, with a growing ratio of retirees collecting benefits to workers paying into the system:

Trump’s anti-immigration policies are making this problem worse. According to the Trustees’ report, lower immigration will deepen Social Security’s financial hole because many immigrants are working-age adults who will pay into the system for decades before they collect benefits. In fact, this problem may be much bigger than the report acknowledges: The report’s baseline assumption is that we’ll have net immigration of almost 1.2 million people a year, and even the pessimistic case assumes 750,000 a year. Meanwhile actual net immigration has already been cut far below that — and may now be negative.

Moreover, Social Security is being financially damaged by growing income inequality in America. Payroll taxes are levied only on wages up to $184,500, and they don’t touch capital income. With the distribution of income increasingly shifting from labor to capital, as well as becoming more unequal among wage-earners, revenue from the Social Security payroll tax has been falling as a share of national income. From 1990 to 2024, it fell from 5.02 percent of gross domestic income to 4.46 percent.

Which brings me to the question that, these days, we ask about everything: How might Social Security be affected by the advent of AI?

A short answer: If, as many of us fear, AI accelerates rising income inequality, it will further reduce the payroll tax receipts that currently pay for Social Security and further endanger its finances.

On the other hand, if AI, as its advocates promise, leads to faster economic growth, it will increase the potential tax base that could and should be used to support Social Security and other social insurance programs. But to take advantage of that larger base, we’ll have to get serious about taxing wealth and capital income.

Is Social Security in trouble? Yes, but only because of the way its financing is currently structured — a structure that no longer works well because our society and economy have become so unequal. Moreover, Trump’s immigration policies are further endangering its already deteriorating financial condition.

So don’t believe Republicans’ gaslighting that it will be necessary to cut Social Security benefits. All that is necessary to preserve Social Security is political will to raise taxes on the wealthy and a sensible immigration policy.