Social Security remains one of the most popular programs operated by the federal government. Unfortunately, the program has a major flaw: its trust fund, which has provided for benefits over the last seventy years, is now paying benefits out faster than it can receive them in taxes. This means that Social Security will eventually run out of money; when it does, benefits will need to be scaled back to keep the Social Security Administration from going into debt. Most estimates suggest that these cuts would take away roughly 20 percent of Americans’ Social Security benefits.

The trust fund still has enough money to function for more than a decade. However, conventional estimates have suggested that it will run out of money in 2035, if no solution is agreed to on Capitol Hill. The problem is a political one; while the measures that could prevent the trust fund from expiring—namely, raising taxes or cutting benefits—could be passed in Congress, both ideas have attracted immense political opposition from fiscal conservatives and retiree advocacy groups. However, as Social Security cuts would be political suicide for whoever would be forced to approve them, it is very likely that a compromise will be worked out.

And it will need to be worked out soon. A recent report put out by the Treasury Department moved the expiration date forward a year, estimating that the trust fund will be empty by 2034. The advancement appears to have been brought about in part by the Coronavirus pandemic, which caused massive job losses—decreasing the amount of Social Security collected—and also causing many Americans to retire and claim their Social Security benefits early, arguably saving the Social Security Administration money in the long run but dramatically increasing its short-term obligations. 

There are a number of possible solutions to this problem. The simplest are evening out the balance of payments by making slight decreases to benefit payments, and by increasing Social Security taxes, even though both these measures will face stiff opposition in Congress. One proposed innovative solution has been eliminating the upper limit for Social Security taxes; under the current system, Americans making more than $142,800 per year in income do not need to pay Social Security taxes on any money above that amount. If this loophole were eliminated, it would go a long way toward plugging the gap – and could even allow Congress to raise the payments slightly, as one lawmaker recently proposed.

Trevor Filseth is a current and foreign affairs writer for the National Interest.

Image: Reuters