A new government report showing Social Security’s long-term finances continue to weaken is renewing pressure on Congress to address the program’s funding shortfall as lawmakers advance competing proposals to strengthen the system.
The annual report from the Social Security and Medicare trustees, released Wednesday, projects that the trust fund supporting retirement and survivor benefits will have enough reserves to pay full scheduled benefits through 2033.
If Congress does not act before then, the program would rely on incoming payroll tax revenue, which would cover approximately 77% of scheduled benefits.
The outlook for the combined retirement and disability trust funds also slipped. Trustees now project those funds can pay full benefits until 2034, one year sooner than forecast in last year’s report.
After that point, revenue would be sufficient to cover about 81% of scheduled benefits. The disability insurance trust fund is expected to remain financially sound for the remainder of the 75-year projection period.
Trustees noted that the program’s financial outlook has been impacted by the Social Security Fairness Act, which President Donald Trump signed into law earlier this year.
The measure repealed two provisions that had reduced benefits for many public-sector retirees who also received pensions from jobs not covered by Social Security, thereby increasing the program’s projected costs.
The report arrives as lawmakers continue to offer competing visions for strengthening Social Security without reducing benefits.
Senator Bernie Sanders of Vermont has introduced the Social Security Expansion Act, which is co-sponsored by Senator Elizabeth Warren and nine other Senate Democrats. The bill would require wages, salaries and self-employment income above $250,000 to be subject to Social Security payroll taxes while increasing certain benefits. It would also raise taxes on investment income and apply those taxes to specific business earnings.
Representative John Larson of Connecticut has championed a similar legislation in the House. His Social Security 2100 Act would apply Social Security payroll taxes to earnings above $400,000 while expanding benefits.
The measure, introduced in 2023 and co-sponsored by 189 Democrats, has not yet been reintroduced this Congress.
A bipartisan effort has also emerged in the Senate. On Tuesday, Senator Elizabeth Warren and Senator Bernie Moreno of Ohio stated in a joint opinion article that they are working together on legislation to lift the payroll tax cap, arguing the change would improve Social Security’s long-term finances.
The trustees again urged lawmakers to act before the trust funds’ reserves are depleted, stating that earlier action would provide policymakers with more options and allow workers and retirees additional time to prepare for any changes.
More than 70 million Americans receive Social Security retirement, survivor or disability benefits.
