A 22 Percent Social Security Cut Is Coming. Will the Senate Act?

Once the trust fund is empty, Social Security can pay out only what it collects. Yet few candidates are talking about this in any serious way.

Americans will soon choose a set of senators who will take office in January 2027 and serve through early 2033. In the final months of that term, Social Security's retirement trust fund is expected to run dry and trigger benefits cuts of 22 percent—not just for the wealthy, not just for new retirees, but for everyone up to and including widows living on survivors' checks.

Somehow, this has yet to sink into the national consciousness.

The precise timing is a projection. The cuts are not. They're activated automatically following the law: Once the trust fund is empty, Social Security can pay out only what it collects. And the zero hour keeps moving toward us. This year's trustees report pulled the projection forward a full year. The program has promised to pay out roughly $30 trillion more than it will take in over the next 75 years.

Yet few candidates are talking about this in any serious way. It pays to say nothing. Evidently, lots of legislators believe that the political cost of telling voters the unhappy news today exceeds the cost of letting the cuts occur tomorrow. That's how we ended up just one term from disaster.

When politicians do raise the issue, they make the fix sound easy. Sens. Bernie Moreno (R–Ohio) and Elizabeth Warren (D–Mass.) want you to believe that eliminating the cap on payroll taxes would fix the problem. That solution fails on its own terms.

Using data from the Social Security Administration's own actuaries, my colleague Jack Salmon demonstrates that scrapping the taxable maximum closes only 58 percent of the gap. National Review's Ramesh Ponnuru noted last month that it would push the federal marginal rate on top wages to an untenable 49.4 percent, and overall rates would climb past 60 percent in high-tax states like California and New York.

The senators aren't alone in wanting to tax our way out of this problem. In one recent survey, 89 percent of Americans aged 65 and older favored protecting current retirees' benefits even if doing so requires higher taxes on younger workers.

That position is popular only because it rests on the image of retirees living off nothing but Social Security. That image, partly an artifact of bad data, fails to capture the situation.

In a March 2025 government survey, 24 percent of seniors reported that Social Security supplies 90 percent or more of their income. But when Census Bureau researchers matched responses with IRS filings and benefits records, they found that retirees frequently omitted their 401(k) and IRA withdrawals, making the real figure only about 14 percent. Meanwhile, 58 percent of retirees draw less than half their income from the program.

The remaining 42 percent are the retirees that Social Security reform of any kind should protect. They already receive a raw deal under the current formula, which does a much better job of protecting wealthier seniors.

As the Cato Institute's Romina Boccia and Ivane Nachkebia documented last month, seniors aged 65 to 74 had a median net worth of $410,000 in 2022, compared with only $135,600 for those aged 35 to 44 (who pay a significant share of the taxes). Roughly 34 percent of Social Security dollars go to filers with adjusted gross incomes above $100,000. Too often, Social Security is less a need-based program than a transfer of wealth from the young and unpropertied to the old and comfortable.

A March 2026 paper from the Committee for a Responsible Budget puts it plainly: Despite facing large deficits, Social Security now pays the wealthiest couples roughly $100,000 in annual benefits, more than five times the poverty threshold for a retired household. "In inflation-adjusted terms," it adds, "the maximum couple's benefit has doubled since 1990 and is projected to double again around 2070. By that point, 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 beneficiaries a flat benefit at 125 percent of the poverty level (roughly $1,660 a month) would erase the entire 75-year deficit while raising benefits for the lowest earners.

Next, index eligibility ages to longevity and allow workers to own compounding assets through personal accounts rather than relying on a political promise that the next generation must be conscripted to keep.

Many people will dislike reading this, I'm sure, and wonder why we can't just borrow to pay for the benefits. The answer is that between Social Security, Medicare, and interest payments, we're short by $115 trillion over 30 years. The moment Congress commits to that much borrowing, the likelihood of a historic inflation burst increases. Even this painful hike in the price level would not manage to devalue enough debt 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.

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