In a rare sign of bipartisanship, Sens. Bernie Moreno (R-OH) and Elizabeth Warren (D-MA) joined forces to find a “common-sense solution” to preserve Social Security for future generations.
The Social Security trust fund for retirees is expected to be significantly depleted by late 2032, according to a trustees’ report released by the Social Security Administration earlier this month. This means that only 78% of scheduled benefits in the fourth quarter of 2032 would be paid if the trust fund is depleted as projected. The 2025 report estimate previously set the depletion date for early 2033.
In other words, the nation’s largest retirement program will become insolvent in six years unless reforms are made.
Moreno and Warren proposed lifting the Social Security payroll tax cap to inject over $3 trillion into the program over the next decade, citing an estimate from the Peter G. Peterson Foundation. However, the SSA says eliminating the payroll tax cap would only address half of the shortfall in the program’s finances.
This year, the maximum amount of earnings subject to the Social Security payroll tax is $184,500. Both employees and employers pay a 6.2% rate on earnings below that income amount, totaling 12.4%. The tax doesn’t apply to anyone who earns above $184,500 in the same way it applies to people who make less.
Wealthy Americans pay the Social Security tax only on a capped portion of their earned income, whereas lower-income workers, most of whom make below the tax cap, pay on 100% of their total earnings.
“Lifting the cap so that all income is treated the same would generate substantial revenue that would extend the solvency of Social Security for another generation,” the two senators wrote in a New York Times op-ed published on Tuesday.
Furthermore, they made the case that high earners “should contribute the same percentage of their income as a factory worker in Chillicothe, Ohio, or a teacher in Worcester, Mass.”
Lifting the tax cap would directly raise taxes on high earners, particularly affecting those in high-tax states such as California.
Republican lawmakers, excluding Moreno, generally do not support eliminating the Social Security payroll tax cap because the action could lead to a significant tax hike on businesses and high-income earners.
“Social Security was created by overwhelming bipartisan congressional majorities,” Moreno and Warren said, referencing the 1935 Social Security Act.
“Today, members of Congress from both parties must come together again to save it,” they added. “That’s why the two of us are working together on legislation to remove the cap on Social Security taxes and extend the solvency of our retirement system. Americans deserve nothing less. Preserving the American dream for our children and grandchildren depends on it.”
The Washington Examiner contacted the Senate Budget Committee and the Senate Finance Committee for comment on the proposal to eliminate the Social Security payroll tax cap. Moreno and Warren are members of the Senate Budget Committee and the Senate Finance Committee, respectively. Both panels are chaired by Republicans.
SOCIAL SECURITY RETIREMENT TRUST FUND WILL BE EXHAUSTED BY 2032, TRUSTEES SAY
A spokesperson for Sen. Mike Crapo (R-ID), chairman of the Senate Finance Committee, declined to comment but noted a subcommittee hearing focused on the future of Social Security will be held at 3 p.m. Wednesday.
Moreno and Warren are also on the Senate banking committee, which does not have primary jurisdiction over Social Security.