Social Security Fix Proposed by Sens. Elizabeth Warren and Bernie Moreno The Social Security fund could face insolvency as early as 2032, according to a report released earlier this month by the program’s trustees. The analysis, which cited declining birth rates, reduced immigration, and the retirement of Baby Boomers, warned that the program’s old-age and disability funds would exhaust their resources unless Congress intervenes. A separate projection from the same report suggested combining the two funds could push insolvency to 2034. This marks a shorter timeline than previous estimates, which had projected insolvency by 2033 or 2034. In response to the looming crisis, Senators Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio) proposed a bipartisan solution in an opinion piece published in the New York Times. Their plan calls for removing the current cap on income subject to the Social Security payroll tax. Under the existing system, the 12.4% payroll tax applies only to earnings up to $184,500 annually, with income above that threshold exempt from taxation. The proposal would extend the tax to all income levels, potentially generating $3.4 trillion in additional revenue over the next decade. This change could address more than half of the program’s projected funding gap, according to an analysis by the nonpartisan Peterson Institute. The lawmakers argued that the current structure disproportionately benefits high earners, as most Americans earn below the cap. “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,” Warren and Moreno wrote.#social_security #urban_institute #senator_elizabeth_warren #senator_bernard_moreno #peterson_institute
