What Happened?

Social Security is now spending more than it takes in. In 2025, the program collected $1.45 trillion in revenue but paid out $1.61 trillion in benefits, according to a new report from the Congressional Research Service, the nonpartisan agency that provides research to Congress. To cover the gap, Social Security is drawing down the reserves it built up over decades.

Without action from Congress, the trust funds are projected to run dry by 2034.

Why Does it Matter to Me?

About 71 million Americans currently receive monthly Social Security checks. Millions of workers pay into the program through payroll taxes, expecting benefits when they retire.

If the reserves run out and Congress does nothing, the program could pay only about 83 cents of every dollar in scheduled benefits starting in 2034. That would mean an automatic cut for retirees, disabled workers, and survivors who depend on those payments.

Both Sides, Now

Congress would have to act to prevent a shortfall, and the options fall into two broad categories: bring in more money or pay out less.

On the revenue side, options include:

  • Raising the payroll tax rate above the current 6.2 percent paid by both workers and employers
  • Removing the earnings cap that limits Social Security taxation to a set amount of income each year

On the cost side, options include:

  • Raising the age at which workers can claim full benefits
  • Reducing or adjusting the annual cost-of-living increases that keep benefits in line with inflation

Supporters of revenue increases argue they protect benefits without cutting what retirees receive. Supporters of cost reductions argue they put the program on a sustainable path without raising taxes on workers. The Congressional Research Service report notes that changes made sooner would need to be smaller in scale than changes made closer to the 2034 deadline.

No specific proposal has passed Congress, and the report does not advocate for any particular approach.

What Happens Next?

The closer Congress gets to 2034 without acting, the larger any fix would need to be. Policymakers could pursue higher taxes, reduced benefits, or some mix of both, but any change requires legislation to pass both the House and Senate and be signed by the president. There is no vote scheduled and no bill currently on a path to passage.

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