Higher-income Americans should pay more into Social Security to keep the program solvent enough to continue paying full benefits to beneficiaries, according to former Social Security Administration Commissioner Martin O’Malley.
O’Malley said in an interview aired Monday on NewsNation’s “The Hill” that lawmakers should raise the cap on earnings subject to Social Security payroll taxes rather than pursue benefit reductions. In 2026, the maximum amount of earnings subject to the 6.2% Social Security payroll tax is $184,500. Any income above that is exempt from the Social Security tax.
If no action is taken, the trust fund that supplements incoming payroll taxes to pay monthly Social Security benefits is projected to be depleted in the last three months of 2032, which would force an immediate across-the-board 22% benefits cut, the latest Board of Trustees report said last week.
“It’s only 6% of us that experience any benefit from the cap and an even smaller percentage — three or four — who benefit from scrapping the cap on income above $250,000,” O’Malley reportedly told host Blake Burman. “Most Americans, Blake, think it is unfair that wealthy people don’t pay the same tax rate as a custodian in a school or a teacher.”
O’Malley’s idea is one of many that have been offered up to prevent Social Security benefit cuts. Others have included raising the full retirement age, increasing the payroll tax or capping the benefit.
For the past 16 years, the cost of Social Security’s retirement program has exceeded the amount it receives from taxes collected from paychecks, forcing it to dip into its trust fund reserves to cover the shortfall. Last year, the trust fund was forecast to run out in 2033. Then, in August, the date was moved up to the end of 2032 because of tax provisions in the One Big Beautiful Bill Act that passed almost a year ago.
If Congress allows the trust fund to empty, the program will pay out only what the government collects in taxes. On average, beneficiaries would lose about $500 a month, the nonprofit Committee for a Responsible Budget estimates.
“This should be a wake-up call: Congress needs to act,” said Myechia Minter-Jordan, chief executive at AARP, a nonprofit, nonpartisan organization representing older adults. “Americans have worked hard and paid into Social Security their entire lives, and they deserve to count on it when they retire.”
Why Is November Key for Social Security?
Senators elected in November will be part of the class that either lets Social Security’s trust fund run dry or reforms the program, analysts noted.
“These insolvency dates may feel abstract and far away, but the reality is that the senators elected in 2026 will be in office when Social Security reaches insolvency,” said Margaret Spellings, president and chief executive of the Bipartisan Policy Center. “The question is no longer whether these challenges demand attention. It is whether Washington will find the will to act.”
According to a Peterson Foundation poll conducted by Democratic firm Global Strategy Group and Republican firm North Star Opinion Research in late May:
96% of voters nationwide are urging candidates to clearly explain their plans to prevent automatic Social Security benefit cuts.
That includes 96% of Democrats, 92% of independents and 97% of Republicans.
It also includes at least 94% of voters across each age bracket: 18 to 29, 30 to 44, 45 to 54, 55 to 64, and 65 and over.
The “survey makes it clear that, across party lines, voters overwhelmingly want solutions from candidates this election season,” said Michael Peterson, the foundation’s chief executive.
How Can Congress Protect Social Security Benefits?
There has been no lack of ideas — only lack of will — to fix Social Security so benefits don’t get cut. Over the past several years, proposals have included:
The “six-figure limit,” or capping annual Social Security benefits at $100,000 for couples.
Raise or eliminate the income cap on earnings taxed to fund Social Security. In 2026, only incomes up to $184,500 are taxed to pay for benefits.
Increase the 12.4% payroll tax on income that goes to Social Security payments. The payroll tax is typically split between employee and employer, so each pays 6.2%.
Raise the full retirement age. Until the 1980s, 65 was considered full retirement age, but in 1983, with Social Security facing insolvency, Congress passed legislation that gradually raised it to 67. Some researchers think it should be raised again.
“As in 1983, legislators can institute reforms that will ensure the fiscal health of the program for another 75 years, or in perpetuity,” wrote Stephen Nuñez, the Roosevelt Institute’s director for stratification economics. “In fact, they could have done so at any point in the past two decades (at considerably less cost).”
Congress has “a host of options to close the fiscal shortfall and secure the Social Security Trust Fund against future unanticipated developments. The question is not whether we can fix Social Security, but rather who will bear the costs when we do.”
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to their free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
