Washington Lawmakers Tackle Social Security Trust Fund Depletion
Source: cnbc ·
Washington lawmakers face a pressing deadline to address the depleting Social Security retirement trust fund, according to a recent report from the program's trustees.
Key takeaways
- Social Security's retirement trust fund, OASI, may be depleted by the fourth quarter of 2032, with 78% of benefits payable.
- Lawmakers Sen. Elizabeth Warren and Bernie Moreno are working on legislation to lift the payroll tax cap to improve Social Security's solvency.
- High earners do not pay into Social Security for the rest of the year once they hit the $184,500 cap.
- Sen. Bernie Sanders proposed the Social Security Expansion Act, which would raise taxes on wages over $250,000 and provide benefit increases.
- Rep. John Larson's Social Security 2100 Act would subject income over $400,000 to Social Security payroll taxes and provide benefit increases.
Why it matters
The depletion of Social Security's retirement trust fund has significant implications for the program's solvency and the financial security of millions of retired workers, their spouses, and children. Lawmakers are pushing for reforms, including lifting the payroll tax cap, to ensure the program's long-term viability and prevent benefit cuts. The outcome of these efforts will have far-reaching consequences for the economy and the competitiveness of the US in the global market.
What to watch
- The Senate Finance subcommittee hearing on the future of Social Security on Wednesday.
- The reintroduction of Rep. John Larson's Social Security 2100 Act in the current session of Congress.
- The impact of uneven wage growth on Social Security solvency and potential reforms to address this issue.