Social Security faces a major funding shortfall, with projections showing its main trust fund could run out by 2032. At a Senate Budget Committee hearing, lawmakers warned that benefits could be cut by about 25% once the fund is depleted.
Senator Lindsey Graham cited demographic pressures, while Senator Jeff Merkley noted the shortfall could hit within the current political cycle. Experts said programme income will fall short of costs in all future years, requiring revenue increases, benefit reductions, or both.
About 72 million Americans are expected to receive benefits in 2033. Proposals discussed included creating a government-backed investment fund, raising payroll taxes, lifting income caps, adjusting retirement age, and means-testing benefits.
Senator Tim Kaine stressed that delaying action will worsen the problem. Social Security currently pays nearly $1.6 trillion annually to over 70 million beneficiaries. Established in 1935, the programme now faces strain from longer life expectancy and lower birth rates, intensifying pressure on Congress to act.