Social Security is one of the pillars of retirement security in America; it will, however, face some formidable financial tests over the next decades. According to the latest projections by the program’s trustees, in the absence of legislation, the combined trust funds are projected to be depleted by 2035, at which time only 83% of scheduled benefits would be payable.
Impact of recent legislation
Due to the introduction, for instance, of the Social Security Fairness Act, benefits would be increased for the estimated 3-million-plus workers also receiving public pensions, speeding up the depletion date by six months. That, quite frankly, is what underlines the fact that bold reforms which are vital to the long-term viability of the program simply cannot afford any longer to be delayed.
Public opinion on making up the shortfall
In one recent poll of solutions to the Social Security funding gap, conducted by the National Academy of Social Insurance, AARP, the National Institute on Retirement Security and the US Chamber of Commerce, with Greenwald Research as the survey contactor, found 85% of the more than 2,200 Americans surveyed favor eliminating the funding gap by maintaining or increasing benefits even if doing so requires increasing taxes on some or all Americans. Tyler Bond, research director for the National Institute on Retirement Security said “They’re willing to pay more, not to get extra benefits for themselves, but just to close the financing gap to prevent indiscriminate across-the-board benefit cuts.” While 15% wanted to avoid a tax increase “even if the system cannot cover all promised benefits.”
Preferred policy changes
They did this by a trade-off analysis, in which participants were asked to make preferred policy changes and show willingness to financially support such changes. Results indicate consensus among all political affiliations, income levels, age groups, and educational backgrounds.
The most popular policy option was removing the payroll tax cap on workers making more than $400,000. In 2025, employees and employers each pay Social Security taxes on earnings up to $176,100. Workers earning above the cap no longer pay payroll taxes for the rest of the year. The change would reimpose payroll taxes starting at $400,000 in earnings, without providing additional benefits to those affected.
The second most popular option was an increase in the payroll tax rate: Employers and employees currently pay 6.2% apiece to fund Social Security; under the change, the rate for both would increase to 7.2%.
Other popular reforms include;
Changing the COLA formula to better reflect the spending patterns and inflation that older Americans face, offering caregiver credits to those who take time out of the workforce to care for children under age 6, and offering a bridge benefit to workers in physically demanding jobs to ease the penalty for early retirement.
The least favourite was testing benefits, done by reducing the benefits for those with higher incomes, especially individuals with annual retirement income-excluding Social Security-of $60,000 or more and married couples with $120,000 or more.
All these proposed reforms combined would “wipe out the funding shortfall in Social Security and leave a small 1% surplus,” according to Bond.
Historical support for Social Security
There is a finding consistent with those from the National Academy of Social Insurance, which examined over four decades of polling data on Social Security. Public support for the program remains strong, it found. “Not only do people consider Social Security a really important program, but they really want to make sure we’re spending enough on the program so that it can be there when people are ready to collect their benefits,” said Bond.
