Social Security’s enormity defies a simple description. The 12.4 percent payroll tax that funds the program is the biggest tax most workers pay. It’s the largest source of income for the over 59 million Americans who receive retirement benefits. Its budget is bigger than Medicare’s or the Pentagon’s. But sheer size doesn’t make Social Security invincible.

Within 10 years, the New Deal trust fund created nearly 89 years ago will be insolvent, unable to pay the full promised benefits to retirees, survivors and the disabled. The size of the impending crisis matches Social Security’s massive impact on its beneficiaries, as an insolvency would trigger a 23 percent across-the-board benefit cut, to rich and poor alike. The poverty rate among seniors will skyrocket.

But here is the most worrying fact: The federal government, including presidents and members of Congress from both political parties, have known about this problem in precise detail for over three decades and have done nothing to fix it. The topic has surfaced in the 2024 presidential campaign with former President Donald Trump and President Joe Biden offering hollow pledges that such a devastating financial shock to millions of people won’t happen on their watch.

Is it too late to save Social Security?

The answer is no. How to save it is a bit more complicated.

Presidents and members of Congress from both political parties have known about this problem for over three decades and have done nothing to address it.

The last set of comprehensive Social Security reforms took place in 1983, when a Democratic-controlled Congress came together with Republican President Ronald Reagan to enact a set of courageous policy changes to prevent insolvency that was merely months away. The 1983 reforms were intended to make Social Security solvent for at least 75 years, but it soon became apparent that something was wrong with those projections. By 1990, actuaries projected the program’s trust funds would run dry in the 2030s, little more than four decades hence.

And since then, the story has not changed in any significant way. A reader of a New York Times story from that era about the reasons behind the future crisis would know pretty much everything that today’s media coverage tells them: Increased life spans coupled with lower birthrates reduces the ratio of workers paying into Social Security to beneficiaries drawing funds out. To stabilize the situation, either taxes flowing into Social Security must increase or benefits flowing out must be reduced.

The options for restoring solvency also are well known: Congress could increase the Social Security payroll tax rate, or raise the $168,600 ceiling on salaries subject to that tax. Congress could reduce the initial benefits retirees receive, either in a uniform or a progressive way. It could increase the retirement age, forcing Americans to wait longer to receive full benefits. Or, it could reduce annual cost of living adjustments, which increase benefits after retirement to maintain their purchasing power in the face of rising prices.

None of these ideas are new.

What is new is how little the current president and the man running to replace him have to say about the issue.

Biden has cast himself as a defender of Social Security. “Many of my Republican friends want to put Social Security and Medicare back on the chopping block again,” the president said in his State of the Union address. “I will stop them.”

Politically, this is a potent message, which explains why Biden repeats it so often.

But what the president forgets is that anyone who wants to cut Social Security needn’t chop anything. All they must do is wait: Under current law, benefits will be cut 23 percent when the trust funds run dry, and that is slated to happen all by itself by 2034. And so Biden himself must propose steps to stop benefit cuts, not merely pledge to oppose those who favor reducing benefits.

Seemingly, congressional Democrats delivered just such a plan to the president. In 2019, 89 percent of House Democrats had co-sponsored the Social Security 2100 Act, legislation that would maintain and even increase Social Security benefits and keep the program solvent in perpetuity. That legislation did two things: First, it phased out the “cap” on wages subject to payroll taxes, making all earnings taxable. And second, it gradually raised the 12.4 percent payroll tax rate to 14.8 percent. Together, these tax increases assured that full benefits could be paid, as the act’s title promises, until 2100 and beyond.

How did Biden react? He rejected this plan. As part of his election campaign, Biden pledged not to increase taxes on anyone earning less than $400,000. This eliminated the Social Security 2100 Act’s increase in the payroll tax rate, which supplied nearly half of the plan’s new revenues.

Congressional Democrats introduced a revised version of their legislation that eliminated the increased payroll tax rate. But instead of maintaining solvency until 2100, this new bill — clumsily retitled Social Security: A Sacred Trust — added only five years to the life of Social Security’s trust funds while still hitting high-income Americans with the largest peacetime tax increase in U.S. history. The “Social Security 2038 Act” doesn’t exactly roll off the tongue.

While congressional Democrats rolled over for Biden’s tax pledge, the conservative Republican Study Committee has put out a solvency plan that defies Trump’s wishes.

To be clear, I believe that Democrats have the stronger political hand on Social Security. Americans like the program and the nation’s burgeoning senior population would prefer to see someone else’s taxes increased than see their own benefits cut. Nevertheless, the strong hand on Social Security reform isn’t a winning hand: Making Social Security solvent without reducing benefits involves far larger tax increases than most Americans ordinarily would support. But enabling Social Security to pay full benefits while exempting more than 99 percent of Americans from higher taxes just isn’t practicable.

Republicans, for their part, are in an even less enviable position. Traditionally, Republicans have favored addressing Social Security’s funding gap by reducing benefits rather than increasing taxes. President George W. Bush, for whom I worked, argued for a series of benefit reductions that would protect nearly one-third of the poorest of seniors while gradually and progressively reducing benefits for those with higher earnings.

Trump, as in many areas, is a different kind of Republican when it comes to Social Security reform. He has attacked what he views as the austerity wing of the Republican Party, which seeks to address budget deficits by slowing the growth of entitlement spending. “We’re going to take care of our Social Security,” Trump says. “People have earned that.”

Unfortunately, when it comes to Social Security, the former president appears to have no plan to keep the program solvent. While he has repeatedly pledged never to cut Social Security benefits, he has repeatedly failed to identify a means for avoiding those cuts — which, once again, happen automatically unless the federal government identifies additional revenues for the program. By 2034, Social Security will face annual deficits exceeding $360 billion, and growing. No reduction to so-called waste, fraud and abuse; no expansion of oil drilling; no elimination of aid to Ukraine would fill that gap.

But in that void I see the faintest glimmer of hope. While congressional Democrats rolled over for Biden’s tax pledge, thereby dooming their Social Security reform plan, the conservative Republican Study Committee has put out a solvency plan that defies Trump’s wishes by putting benefit reductions squarely on the table.

The committee’s membership includes around 80 percent of House Republicans, including Speaker Mike Johnson. The group produces its own budget proposals, outlining its own favored strategies to reduce the budget deficit and debt without increasing taxes. As part of its most recent budget, released in March, the committee took a shot at Social Security reform. Its proposals “include modest and delayed changes to the Primary Insurance Amount benefit formula, the retirement age, auxiliary benefits for high income earners, and gradually moving towards a flat benefit,” a benefit structure similar to that of the United Kingdom, Australia and New Zealand, and one that I favor.

The Republican Study Committee proposes three specific changes to Social Security benefits. First, it would modestly reduce benefits for “individuals who are not near retirement” and whose career-average earnings were over $80,000. This change would make Social Security more progressive by reducing benefits for high-earning Americans.

Next, the committee would “make modest adjustments to the retirement age for future retirees to account for increases in life expectancy.” While the proposed budget is not specific, likely this entails automatically indexing the full retirement age for Social Security benefits to increases in longevity. This indexing would keep the ratio of working years to retired years constant, essentially splitting the gains from longevity on a proportionate basis.

And third, the committee “would limit and phase out auxiliary benefits for high income earners.” This change would, for instance, limit benefits to the nonworking spouse of a high-earning worker.

On cue, congressional Democrats protested: California Democratic Rep. Linda Sanchez declared the Republican Study Committee plan would “end Social Security as we know it.”

In fact, my concern is that the committee’s plan would not change Social Security enough — to make it solvent, that is. The proposal is not specific enough regarding the size and timing of the benefit reductions to come up with a precise estimate, but based on the Social Security Administration actuaries’ projections of similar reforms and my own guesstimates of how much savings are lost by protecting current and near-retirees, I would guess the committee proposals would address perhaps 15 percent of Social Security’s long-term funding gap. That leaves a long way to go.

The conservative Republican Study Committee budget does significantly less to fix Social Security’s long-term funding gap than even the Democrats’ scaled-back “Social Security: A Sacred Trust” legislation. So the Democrats clearly win on that front.

But where the Republicans win is in defying rather than acquiescing to their leader and presidential nominee. Former President Trump wields power in the Republican Party that Biden, even as sitting president of the United States, does not.

And defying party leadership is what both sides need to do if we are to fix Social Security before a meltdown occurs, a meltdown that could drag the federal budget down with it. Everyone involved in finding a solution knows that it is easier to fix Social Security if we act sooner rather than later and if we spread the pain of tax increases and benefit cuts over as many people as possible.

Yet, for decades, our elected officials have failed to act on that precept. The reason, for them, is simple: Even if early action on Social Security is better for the country and the economy, it is not better for the politicians who have to carry it out. They must tell Americans that the deal they have been sold — if you pay this percentage of your income into Social Security while you’re working, you’ll receive back benefits based on that formula — must be broken. While politicians talk about keeping promises, Social Security reform, mathematically, can be about little other than breaking promises. If politicians must break promises, by raising Social Security taxes or reducing benefits, the best way is to do it together.

Members of Congress are privately far more realistic about what Social Security reform will involve than their public statements would belie.

Indeed, together is the only way Social Security is likely to be saved. One lesson in U.S. politics is that it’s very difficult to enact significant policy changes on a party-line basis. President Bill Clinton attempted to reform health care and failed. President George W. Bush staked his political capital on Social Security reform, which didn’t even come close to passing through Congress. President Barack Obama succeeded in passing the Affordable Care Act, but by the thinnest of margins at a time when Democrats held huge majorities in both the House and Senate. Our political system, unlike those of nations with parliamentary systems, just isn’t built for big changes.


But we cannot simply issue more debt to paper over Social Security’s funding gap. Researchers at the Wharton School of Business recently concluded that, on its current track, “the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt.” Adding Social Security to the debt burden could bring on a crisis even sooner.

That is why a bipartisan entitlement commission, such as the one proposed in the bipartisan Fiscal Stability Act co-sponsored by Sens. Mitt Romney, R-Utah, and Joe Manchin, D-W.Va., is probably the best hope for Social Security reform before a crisis hits. Some protest that important policy changes should not be made behind closed doors. And I would agree, if three decades of open-doors policymaking had not clearly failed to bring a solution. Moreover, having spoken to members of Congress behind closed doors, I can say they are far more realistic about what Social Security reform will involve than their public statements would belie. Republicans have admitted to me that tax increases are likely; Democrats have said that a higher retirement age may happen, too. To save Social Security, politicians must, for a moment, put politics aside.

Andrew G. Biggs is a senior fellow at the American Enterprise Institute and a former principal deputy commissioner of the Social Security Administration.

This story appears in the June 2024 issue of Deseret Magazine. Learn more about how to subscribe.

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