In investing, they warn you that past performance is no guarantee of future results. That’s wise. But there’s still ample cause for skepticism that Congress will successfully tackle the looming shortfall in Social Security funds, now predicted to hit in the fourth quarter of 2032.
That’s only one quarter earlier than the program’s trustees forecast last year. But consider that we are now one year later – so the margin for legislative maneuvering to salvage what is technically called Old-Age and Survivors Insurance is that much narrower.
“Upon reserve depletion in 2032, projected income is sufficient to pay 78 percent of scheduled benefits,” the trustees said. “This percentage declines gradually to 62 percent by 2100.”
You read that correctly: The empty trust fund would cut benefits paid by 22%. The program, one of the most popular government programs ever devised, directly covered 62.3 million people at the end of 2025.
The report also reflected changes in the trustees’ expectations in three areas that will hurt future revenues:
- Declining fertility. They lowered their expectations to 1.75 children per woman, down from 1.9 in 2025. (Social Security largely depends on payroll taxes paid by current workers to pay benefits to retirees.)
- Dropping numbers of immigrants, both legal and undocumented.
- President Donald Trump’s signature “One Big Beautiful Bill Act,” which made his first-term tax cuts permanent and gave some seniors a temporary break on taxes on their Social Security income.
On the other hand, the report revised upwards its estimates for real gross domestic product per hour worked (labor productivity) and average real earnings, which will benefit the Social Security trust fund.
So where to now?
Possible Fixes
The principal long-term challenges for Social Security are the retirement of the baby boomers and the declining birth rate. Those are costs and revenues on the program’s balance sheet.
Either costs have to come down, perhaps through cuts in benefits, or revenues have to go up, or some mix of both. The report urges Congress to “phase in necessary changes gradually and give workers and beneficiaries time to adjust.” But it also urges lawmakers to implement changes “sooner rather than later.”
The report highlighted the need for speed by showing that delays mean policymakers will have to take more drastic – and therefore probably more unpopular – steps. A payroll tax increase might have to be several percentage points larger, for example.
In 2024, the Government Accountability Office surveyed the options to reduce program costs, notably by reducing the size of benefits and changing eligibility requirements, or increasing revenues through higher payroll taxes or other revenue streams.
The impact of some reform proposals is hard to predict, because they depend on “factors such as economic conditions,” the GAO said. The effect of the frequently heard call to invest Social Security funds in private-sector securities, for instance, would depend on the stock market’s performance.
Interesting Political Wrinkle
Michael Peterson, CEO of the Peter G. Peterson Foundation, said in a statement responding to the trustees report that the crisis is “highly predictable, and fully avoidable.” The foundation focuses on America’s fiscal health.
Peterson urged bipartisan action to fix the program and noted the salience of this year’s midterm elections.
“It’s important to recognize that the senators we elect this year will be in office when Social Security becomes unable to pay out full benefits, so this must be a central campaign issue,” he said.
Whether this is a political carrot (“You saved my Social Security”) or political stick (“You were in charge when my benefits got cut”), it would certainly seem to be an incentive.
Photos You Should See – June 2026
