Social Security is 90. Can It Be Saved for Future Generations?

Newsweek

3 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
August 14 marks Social Security's 90th anniversary - an achievement underscored by both its longevity and the scale of its impact.
Social Security was created during the Great Depression to provide financial security for Americans. Signed into law by President Franklin D. Roosevelt on August 14 1935, as part of the New Deal, it established a federal safety net funded through payroll taxes. It initially offered retirement benefits for workers aged 65 and older, with later expansions adding disability insurance and survivor benefits. The program's goal was to reduce poverty among the elderly and stabilize the economy by ensuring a basic income.
More than 73 million Americans now receive benefits from the program, making it one of the most significant pillars of the nation's social safety net.
But its future is far from secure. According to the latest report from the Social Security Trustees, the program's two trust funds - the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) funds - are projected to reach insolvency by 2034. At that point, benefits would be funded solely through incoming payroll taxes, triggering an automatic cut of around 21 percent unless Congress acts.
This is not the first time Social Security has faced a funding cliff. In the early 1980s, the trust funds were similarly close to depletion. Lawmakers responded with reforms that included faster payroll tax increases, a gradual rise in the retirement age, and taxation of some Social Security benefits. Those measures extended the program's life, but four decades later, a new crisis looms.
Today, as the crunch point sits less than a decade away, three distinct approaches have been tabled by lawmakers.
Composite image created by Newsweek.
Composite image created by Newsweek.
Photo-illustration by Newsweek/Getty
The Fair Share Act
Introduced by Democrats Sheldon Whitehouse and Brendan Boyle, the Fair Share Act is aimed at shoring up Social Security and Medicare by targeting the highest earners. The bill would require taxpayers with incomes over $400,000 to pay Social Security taxes on all wage, self-employment, and investment income above that threshold.
Under the current system, most taxpayers pay Social Security taxes on all their income - but because of the $160,200 wage cap, wealthier Americans stop contributing once they pass that amount in earnings.
"This legislation would significantly extend Social Security solvency and would extend Medicare solvency by an estimated 20 years," Whitehouse and Boyle said.
Tax attorney Nik Agharkar, owner and managing member of Crowne Point Tax, called the Fair Share Act "the clearest path to achieving long-term solvency" of the three options, noting that it could fund the program for 75 years.
"Since the proposals made in the Fair Share Act increase taxes on our highest earners, which reverses decades of erosion to our payroll tax bases, while leaving middle- and lower-income workers untouched, it would likely be considered the most 'fair,' but certainly high-earners would disagree," Agharkar told Newsweek.
A New Investment Fund
A bipartisan offering comes from Republican Senator Bill Cassidy and Democratic Senator Tim Kaine. Their plan would create an additional investment fund separate from the existing trust funds. Unlike Social Security's current assets - which are invested exclusively in special-issued U.S. government bonds - the new fund would diversify into stocks, bonds, and other investments to secure higher returns.
The proposal envisions an up-front $1.5 trillion investment to give the fund 75 years to grow. During that time, the Treasury would temporarily provide the cash needed, to be repaid once the new fund matures and begins supplementing payroll tax revenue.
"There is a nationwide appetite to implement a bipartisan, commonsense plan like ours," Cassidy and Kaine wrote in a Washington Post op-ed. "Waiting until the Social Security Trust Fund is on the eve of crisis would have difficult and preventable consequences. Congress should seize the moment."
Michael Montgomery, a political scientist at the University of Michigan-Dearborn, said this approach could represent the political middle ground.
"Because it neither takes from future beneficiaries - something Democrats will oppose - nor requires high earners to contribute more - something Republicans will oppose - Cassidy-Kaine may be 'just right' for addressing Social Security and Medicare funding if our profoundly-divided Congress has the will to act," Montgomery told Newsweek.
Raising the Retirement Age
Another idea comes from the Republican Study Committee, which in March 2024 proposed "modest adjustments" to the retirement age for future retirees to reflect rising life expectancy. While not an official administration policy, the group includes 170 GOP lawmakers, among them allies of President Donald Trump.
The committee said current seniors and those near retirement would not be affected. But analysis by the Congressional Budget Office shows that raising the age to 69 - up from the current 67 - could cut lifetime benefits by up to 13 percent for anyone born after 1971. The Committee for a Responsible Federal Budget has said it would only close 35 percent of the funding gap, meaning that if implemented, it would need to be used in tandem with other policies to make a meaningful impact.
Political "Goldilocks"
Michael Montgomery framed the three proposals as a "political 'Goldilocks' scenario," and that political realities remain a significant barrier in a "deeply divided Congress."
The Fair Share Act's reliance on higher taxes for the wealthy could likely face stiff resistance from Republicans, while the investment fund requires a massive one-time outlay that could be politically unpalatable in Congress. Raising the retirement age, while less costly in budget terms, could be politically toxic given its impact on working-class Americans.
Nik Agharkar cautioned that none of the options are ideal. "We should do more to get Congress to increase spending on Social Security through budget negotiations," he said, warning that political gridlock could push the issue to the brink.
How Do Americans Feel?
Social Security is often referred to as the "third rail" of American politics due to its enduring popularity. So it comes as no surprise that Americans want a say in how to fix the funding crisis. A July 2025 survey from The Senior Citizens League (TSCL), one of the nation's largest nonpartisan seniors groups, shows that the most popular solution, backed by 50 percent of respondents, is eliminating the cap on earnings subject to payroll taxes, like in the Sheldon-Whitehouse proposal.
Other favored options include creating a fast-track process for Congress to vote on Social Security legislation (38 percent), increasing the payroll tax rate (31 percent), and applying the 6.2 percent tax to investment income for high earners (29 percent).
More drastic or market-linked proposals received far less support: only 19 percent backed investing payroll taxes in stocks or other assets, 18 percent supported raising the retirement age to 70, and just 1 percent favored reducing cost-of-living adjustments.