Social Security's coffers are so low even Republicans are talking about raising taxes — even if they 'get smeared'

The trust fund underpinning Social Security's finances is scheduled to dry up in 2032, putting millions of retirees at risk of benefit cuts by the end of the next president's term. Some Republicans are starting to break with the party's longstanding opposition to tax increases to address the problem.

"We've got too many people who say, 'Well, we have to stay within the current income level or stay at the current tax rate,'" Rep. Tom Cole of Oklahoma, chair of the House Appropriations Committee, told the Washington Post in an interview. "I'm willing to look at the tax rate. I am willing to raise the amount of income through tax."

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Such remarks from an influential Republican like Cole serve to deepen the GOP's willingness to at least entertain tax increases to extend the lifespan of a politically popular program like Social Security. In June, Social Security's trustees issued an annual report that said the program would be able to pay full benefits to retirees and disabled Americans until the fourth quarter of 2032, one quarter earlier than it had projected last year. At that point, the fund would be obligated to slash benefits by 22% to strengthen its financial footing.

Other Republicans are echoing Cole. "You'll probably have to do something on the payroll half of the money being paid into the system," Rep. Lloyd Smucker of Pennsylvania, who sits on the tax-writing House Ways and Means panel, recently told Roll Call.

Lifting the payroll tax cap gets a fresh look

In June, Democratic Sen. Elizabeth Warren of Massachusetts and Republican Sen. Bernie Moreno of Ohio proposed wiping away the cap on Social Security payroll taxes, which are currently set at 12.4% and evenly divided between a worker and their employer. The payroll tax cap currently affects only the first $184,500 of wages and self-reported income, and that sum is annually indexed for inflation.

The pair called it a "no-brainer" solution to a vexing policy problem in a New York Times op-ed published June 23. "With rising prices and artificial intelligence causing economic uncertainty for the future, Social Security must remain a stable foundation to help retirees afford life's basic necessities," Warren and Moreno wrote.