Social Security faces 2035 depletion, advocates call to lift payroll tax cap

Social Security’s solvency debate is narrowing to a simple question of who pays. The program’s combined trust funds are projected to cover full scheduled benefits until 2035, but earnings above $184,500 in 2026 escape the payroll tax entirely, leaving advocates arguing that lifting the cap would ask more from high earners while leaving most middle-class workers untouched.

The timing matters because benefit cuts would not begin until the trust funds were depleted. The Social Security Administration’s latest trustees’ report says the Old-Age and Survivors Insurance trust fund can pay 100 percent of scheduled benefits until 2033, while the combined Old-Age, Survivors and Disability Insurance funds can do so until 2035. After that, continuing program income would cover about 83 percent of scheduled benefits. The Congressional Budget Office’s 2024 projections are slightly more pessimistic, putting combined exhaustion in fiscal 2034 and estimating that benefits paid from incoming revenue in 2035 would be about 23 percent smaller than scheduled benefits.

That makes the payroll tax cap the central policy lever. Social Security payroll taxes apply only up to the taxable maximum, and the Social Security Administration says that ceiling was $3,000 when the program began in 1937. It has risen over time, and the taxable maximum is now $184,500 for 2026. Broadening that base would raise more revenue without cutting the checks that current retirees and near-retirees expect before depletion arrives.

The broader financing picture has also shifted since the 1983 amendments, which the Social Security Administration describes as a comprehensive overhaul of coverage, financing and benefits. A Bipartisan Policy Center analysis says payroll taxes now cover about 83 percent of earnings, down from 90 percent in 1983, underscoring how much of the wage base sits outside the tax. That gap has become more consequential as lawmakers debate whether to preserve current benefits, trim them, or finance them differently.

Recent legislation has already complicated the arithmetic. The Social Security Fairness Act of 2023, enacted on January 5, 2025, repealed the Windfall Elimination Provision and Government Pension Offset, and the 2025 trustees report says it worsened the long-range actuarial deficit. AARP says the trust-fund surplus will be depleted in 2034 unless Congress acts, with annual revenues then covering only about 83 percent of scheduled benefits. The depletion date is still years away, but the policy choices are already on the table.