Social Security faces a funding shortfall by 2032 unless Congress acts, according to the program’s annual trustees report released in June. The retirement trust fund that provides benefits to more than 71 million Americans will be depleted in the fourth quarter of 2032, one year earlier than previously projected, at which point incoming payroll taxes will cover only 78% of scheduled benefits, triggering an automatic 22% cut across the board.
The looming crisis has prompted a bipartisan group of senators to introduce the PROMISE Act, or Protecting Retirement Opportunities and Maintaining Income Security for Everyone. The bill would establish a formal legislative process to force Congress to debate and vote on Social Security reform before the trust fund runs dry.
Senators leading the effort include Dick Durbin, the Democratic Whip from Illinois; Bill Cassidy of Louisiana; John Cornyn of Texas; Tim Kaine of Virginia; Angus King of Maine; and Thom Tillis of North Carolina. “Social Security is the bedrock promise of a secure retirement, earned after a lifetime of hard work,” Durbin said in a statement. “But the longer Congress waits, the more difficult it will be to address the program’s financial shortfall.”
The move underscores a persistent challenge: despite years of warning about Social Security’s deteriorating finances, Congress has proposed numerous reform plans but brought almost none to a vote. The PROMISE Act aims to change that by creating a mandatory process that would require the Social Security Advisory Board, an independent bipartisan committee, to send a base bill to Congress after gathering public input. Any recommendations would have to ensure at least 50 years of solvency for the program.
The base bill would be introduced by Senate and House majority leaders, or by other members of Congress if they do not. It would then go to the Senate Finance Committee and House Ways and Means Committee for consideration, hearings, and amendments. The bill would be brought to both chamber floors for 100 hours of debate, during which lawmakers could propose substitute amendments. An amendment would need 60 votes to pass in the Senate, and the final bill would require a minimum of 60 Senate votes as well.
The trustees report showed the program’s long-term financial outlook has worsened significantly. The 75-year solvency gap—the amount needed to pay all scheduled benefits over three-quarters of a century—rose to 4.42% of payroll, up from 3.82% in the previous year. The Committee for a Responsible Federal Budget, a nonpartisan think tank, called this shift evidence that “Social Security’s financial outlook has substantially worsened.”
Some experts have warned that the depletion date poses risks to the broader economy and could trigger a fiscal crisis if Congress does not address the shortfall. The PROMISE Act also includes a solvency review process every 10 years that would activate the same floor procedures if another funding shortfall is projected, creating an ongoing mechanism for periodic reform.
The timing is significant: Durbin is retiring at the end of his current term, and Cassidy failed to win his recent primary reelection bid. “I want to get it done before we leave, so there is impetus to get it done,” Cassidy told CNBC in June. Cassidy has proposed what he calls a “big idea” fix modeled after changes made to the federal Railroad Retirement system under President George W. Bush, which would create a separate investment fund for Social Security.
Other reform proposals being debated include raising the payroll tax rate, removing or raising the cap on earnings subject to the Social Security payroll tax (currently set at $184,500), and gradually increasing the full retirement age. Senators Elizabeth Warren and Bernie Moreno recently co-wrote an op-ed calling for removing the payroll tax cap entirely.
Sources
- CNBC — Details on the PROMISE Act, senators involved, their statements, the 78% benefit payment projection, and the 75-year solvency gap rising to 4.42%
- Peter G. Peterson Foundation — Confirmation that the retirement trust fund is projected to be depleted by 2032, with 22% automatic benefit cuts
- Social Security Administration — Confirmation that the trust fund will be depleted in late 2032 and that incoming payroll taxes will cover about 78% of scheduled benefits
- Committee for a Responsible Federal Budget — Statement on the PROMISE Act and assessment that Social Security’s financial outlook has substantially worsened
- CBS News — Reporting on the PROMISE Act establishing a legislative procedure to preserve Social Security’s trust funds for 50 years
