Key facts
- Senators Dick Durbin and Bill Cassidy are pushing a bill to establish a process for Congress to ensure Social Security solvency for 50 years.
- The proposal involves the Social Security Advisory Board collecting public input and submitting draft legislation.
- Senator Bill Cassidy has also proposed a $1.5 trillion investment fund, financed by borrowing, to help cover future Social Security shortfalls.
- Senators Elizabeth Warren and Bernie Moreno support lifting the cap on the Social Security payroll tax, which currently applies to income up to $184,500.
- Other proposals include applying the payroll tax to income above $400,000 or $250,000, and taxing capital gains and dividends.
Lawmakers are exploring various proposals to prevent a projected 22% cut in Social Security benefits, which could occur in six years. Senators Dick Durbin (D-Ill.) and Bill Cassidy (R-La.) are spearheading an effort to establish a process for Congress to address the program's solvency for at least 50 years. Their bill would direct the bipartisan Social Security Advisory Board to gather public input and submit draft legislation.
This proposed process would then lead to the bill being placed on the Senate and House calendars for debate and potential amendment. Passage would require a three-fifths vote in the Senate and a simple majority in the House. However, the initiative faces challenges, with some lawmakers hesitant to take difficult votes, and organizations like AARP have expressed concerns about the procedural limitations of the bill.
Senator Cassidy has also introduced a separate proposal with Senator Tim Kaine (D-Va.) that involves creating a $1.5 trillion investment fund. This fund would be financed by Treasury borrowing and invested in higher-risk assets over 75 years, aiming to cover a significant portion of the projected $26.6 trillion needed to maintain Social Security payments. Debt watchdogs, however, have labeled this a "dangerous, debt-funded gamble."
Another approach gaining traction is lifting the cap on the Social Security payroll tax. Senators Elizabeth Warren (D-Mass.) and Bernie Moreno (R-Ohio) are advocating for this change, arguing it would create a fairer system where wealthier individuals contribute a larger share of their income. According to the Peter G. Peterson Foundation, eliminating the cap could generate over $3.2 trillion in a decade. Other proposals, such as one from Senator Sheldon Whitehouse (D-R.I.) and Representative Brendan Boyle (D-Pa.), suggest applying the tax to income above $400,000, with additional provisions for Medicare. Progressive lawmakers are also backing a bill to lift the cap on earnings above $250,000 and include capital gains and dividends.