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What to know about the Social Security fix proposed by Sens. Elizabeth Warren and Bernie Moreno
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Key Points:
- The Social Security trust fund is projected to run out of money by 2032, earlier than previous estimates, due to demographic shifts and reduced revenue sources, prompting urgent calls for reform.
- Senators Bernie Moreno (R-Ohio) and Elizabeth Warren (D-Mass.) proposed a bipartisan plan to lift the current $184,500 cap on income subject to Social Security payroll taxes, potentially generating $3.4 trillion over the next decade.
- Their proposal aims to tax all income above the cap, which could close more than half of the program’s funding gap and help avoid benefit cuts, though it faces opposition from some conservatives who view it as a significant tax increase.
- Alternative reform options include raising the payroll tax rate by one percentage point, which could generate $601 billion over 10 years, or creating an independent commission to devise long-term solutions, as proposed in a recent bipartisan House bill.
- Without legislative action, Social Security benefits are expected to be automatically reduced by about 25% in 2032, highlighting the urgency for Congress to address the program’s financial challenges.
