Overview

• A report from the Committee for a Responsible Federal Budget projects the retirement trust fund will run dry by late 2032, two years earlier than trustees’ estimates.
• Eliminating federal income taxes on Social Security benefits is estimated to reduce program revenues by between $1.05 trillion and $1.45 trillion over 2025–2035.
• When the trust fund is exhausted, payroll tax revenues will cover only about three-quarters of scheduled benefits, triggering an automatic 24 percent cut.
• Fewer than half of Americans recognize that payroll taxes fund current retirees, and younger workers show more willingness to accept cuts than older generations.
• Options such as phased payroll-tax increases, lifting the taxable wage cap and modest benefit tweaks have been put forward, but lawmakers remain deadlocked.