Americans will soon elect a group of senators who will take office in January 2027 and serve until early 2033. In the final months of that term, the Social Security retirement trust fund is expected to be depleted, leading to 22% benefit cuts, not just for the wealthy, not just for new retirees, but for everyone, including widows living off survivors' checks.
Somehow, this has not yet penetrated the national consciousness.
The precise moment is a projection. Cuts are not. They are activated automatically by law: Once the trust fund is empty, Social Security can pay only what it collects. And the zero hour continues to advance towards us. This trustees report of the year advanced the projection a full year. The program has promised to pay out approximately $30 trillion more than it will raise over the next 75 years.
However, few candidates talk about this seriously. It's worth not saying anything. Evidently, many lawmakers believe that the political cost of telling voters the bad news today outweighs the cost of allowing cuts to happen tomorrow. That's how we ended up just one term away from disaster.
When politicians raise the problem, they make the solution seem easy. Sens. Bernie Moreno (R-Ohio) and Elizabeth Warren (D-Mass.) would like you to believe that removing the cap on payroll taxes would solve the problem. That solution fails on its own terms.
Using data from the Social Security Administration's own actuaries, my colleague Jack Salmon shows that eliminating the tax maximum closes only 58% of the gap. National Review'Ramesh Ponnuru noticed last month that would drive the federal marginal rate on top wages to an unsustainable 49.4%, and overall rates would rise past 60% in high-tax states, including California and New York.
Senators are not the only ones who want to tax their way out of this problem. in one recent survey, 89% of Americans age 65 and older favored protecting benefits for current retirees, even if doing so requires higher taxes on younger workers.
That position is popular only because it is based on the image of retirees living solely on Social Security. That image, partly the product of erroneous data, does not capture the situation.
In a March 2025 government survey, 24% of seniors reported that Social Security provides 90% or more of their income. But when Census Bureau researchers compared the responses to IRS returns and benefit records, they found that retirees frequently omitted their 401(k) and IRA withdrawals, making the real figure only about 14%. Meanwhile, 58% of retirees earn less than half their income from the program.
The remaining 42% are retirees who should be protected by any type of Social Security reform. They already get a raw deal under the current formula, which protects wealthier seniors much better.
Like Romina Boccia and Ivane Nachkebia of the Cato Institute documented last month, Seniors ages 65 to 74 had a median net worth of $410,000 in 2022, compared to just $135,600 for people ages 35 to 44 (who pay a significant portion of taxes). About 34% of Social Security money goes to taxpayers with adjusted gross incomes over $100,000. Too often, Social Security is not so much a needs-based program as a transfer of wealth from the young and dispossessed to the old and well-off.
TO March 2026 document Committee for a Responsible Budget says it clearly: Despite facing large deficits, Social Security now pays the wealthiest couples about $100,000 in annual benefits, more than five times the poverty line for a retired household. “In inflation-adjusted terms,” he adds, “the maximum benefit for couples has doubled since 1990 and is projected to double again around 2070. At that time, the wealthiest couples will receive $200,000 in combined benefits.”
The best reform is one proposed by Boccia: Return Social Security to a mission of poverty prevention. The Congressional Budget Office estimates that giving new recipients a flat benefit equal to 125% of the poverty level (about $1,660 a month) would erase the entire 75-year deficit while increasing benefits for those earning the least.
Next, indexing eligibility comes down to longevity and allowing workers to own compound assets through personal accounts, rather than relying on a political promise that the next generation must be forced to fulfill.
I'm sure many people won't like reading this and will wonder why we can't just borrow to pay benefits. The answer is that between Social Security, Medicare and interest payments, we are short $115 trillion over 30 years. The moment Congress commits to borrowing so much, the likelihood of a historic burst of inflation increases. Even this painful increase in the price level would not devalue the debt enough to save us, since Social Security benefits are indexed to inflation. The obligation would survive; retirees' bond portfolios and other assets would lose value.
The senators we elect this year will not be able to avoid these decisions. Don't let them avoid the question either.
Rugy Veronica He is a senior fellow at the Mercatus Center at George Mason University. This article was produced in collaboration with Creators Syndicate.
