Hamill: Can Congress save grandma’s check again?

Social Security is heading toward a crisis that will affect nearly every American household, and Congress is running out of time to fix it. The program's trust fund is projected to be depleted by 2035, at which point benefits would be cut by approximately 22 percent across the board — unless lawmakers act. A new bipartisan Senate bill proposes scrapping the wage cap on Social Security taxes to keep the program solvent through 2090, but the political math remains daunting.

The scale of the problem is straightforward even if the politics are not. When Social Security began paying benefits in 1940, the eligibility age was 65 — two years above the average male life expectancy. Today, the average American lives well past retirement age, collecting benefits for decades longer than the system's architects anticipated. The ratio of workers paying into the system versus retirees drawing from it has shifted dramatically: in 1960, there were roughly five workers per beneficiary. Today, that ratio has fallen to about 2.7 to 1, and it continues to decline as the Baby Boomer generation ages through retirement.

What the bipartisan bill would do

The proposed legislation, which has attracted co-sponsors from both parties, would eliminate the cap on earnings subject to Social Security taxes. Currently, income above $168,600 is not taxed for Social Security purposes. Removing this cap would generate an estimated $1.4 trillion in additional revenue over the first decade, according to the Social Security Administration's Office of the Chief Actuary.

The bill also includes provisions for gradually raising the full retirement age, reflecting increases in life expectancy, and adjusting the benefit formula to provide a higher minimum benefit for low-wage workers who have spent 30 years in the workforce. These changes are designed to address the program's solvency while making it more progressive — the people who would pay more in taxes are high earners who are currently shielded from Social Security taxes on most of their income, while the people who would benefit from the enhanced minimum are the most vulnerable retirees.

The bill's supporters argue that the current cap creates a regressive tax structure. A worker earning $50,000 pays Social Security taxes on every dollar of income. A worker earning $1 million pays Social Security taxes on less than 17 percent of their income. Eliminating the cap would make the system's funding structure more equitable, even if it means higher taxes for top earners.

The political obstacles

The challenge is that Social Security reform has been a political third rail for decades, and for good reason. More than 67 million Americans receive Social Security benefits, and millions more are approaching eligibility. Any proposed change triggers immediate opposition from the constituency it affects most directly — older voters who vote at the highest rates of any demographic group.

Democrats have generally opposed benefit cuts, arguing that Social Security is an earned benefit, not an entitlement, and that reducing payments would push millions of seniors into poverty. Republicans have opposed tax increases, arguing that lifting the cap would discourage work and investment while doing nothing to address the program's structural cost growth. Both sides have a point, and both sides have used the issue to mobilize their respective bases.

The bipartisan bill attempts to thread this needle by combining revenue increases with benefit adjustments, but it faces resistance from both flanks. Progressive groups argue that any benefit reduction — even one phased in gradually — is unacceptable when the solution could simply be to tax high earners more. Conservative groups argue that any tax increase legitimizes a program that should be partially privatized or means-tested.

There is also the matter of political timing. Congress has a well-documented pattern of waiting until the last possible moment to address Social Security shortfalls, and 2035 feels distant enough to allow continued inaction. The history of Social Security reform is instructive: the 1983 amendments that saved the program from insolvency were passed just months before the trust fund was projected to run dry. The political pressure of imminent crisis was necessary to force a deal.

Why waiting makes the fix harder

Every year that passes without reform narrows the available options and increases the magnitude of the adjustments needed. The Social Security trustees' 2025 report projected that the trust fund reserve will be depleted by 2035. After that point, the program will only be able to pay benefits from incoming payroll taxes — roughly 78 percent of scheduled benefits.

For the average retiree receiving $1,900 per month, a 22 percent cut means losing roughly $420 per month, or $5,040 per year. For retirees who rely on Social Security as their primary income source — roughly 40 percent of beneficiaries — a cut of that magnitude would push many below the poverty line.

The longer Congress waits, the steeper the adjustments required. If reform had been enacted in 2020, a combination of modest tax increases and gradual benefit adjustments could have closed the gap with minimal disruption. By 2030, the required changes will be significantly larger. By 2034, the options will be limited to sharp benefit cuts, major tax increases, or both.

The broader economic context

The Social Security debate is happening against a backdrop of rising economic anxiety. Inflation has eroded the purchasing power of fixed incomes. Housing costs have consumed an increasing share of retiree budgets. Healthcare expenses continue to grow faster than general inflation. And the shift from defined-benefit pensions to defined-contribution plans like 401(k)s has left many workers with insufficient retirement savings.

For younger workers, the question is not whether Social Security will exist when they retire — it almost certainly will, in some form — but whether it will provide enough to matter. Polls consistently show that adults under 50 doubt they will receive Social Security benefits at all, despite the program's legal structure making full elimination virtually impossible. This skepticism has real consequences: workers who discount future benefits may save less, invest more conservatively, or delay career decisions in ways that hurt the broader economy.

What This Means For You

If you're currently receiving Social Security, the 2035 deadline matters because it could reduce your monthly benefit by hundreds of dollars unless Congress acts. If you're still working, it matters because you're paying into a system that may not deliver what it promised. The bipartisan bill to eliminate the wage cap is the most serious reform proposal in years, and it's worth understanding where your representatives stand on it. The current cap means someone earning $168,600 and someone earning $10 million pay the same amount in Social Security taxes — a fact that strikes most Americans as unfair regardless of their political affiliation. Whether the fix is removing the cap, raising the retirement age, adjusting benefits, or some combination, the math is clear: doing nothing guarantees a 22 percent cut. Doing something means making choices that will inevitably displease someone. The question is whether Congress will make those choices on its own timeline or be forced into them by the trust fund's depletion.