What can Congress do about this funding issue?
According to experts, there are two ways for the US government to solve the current funding issue. The SSA can either increase tax revenue or cut benefits for people.
Reducing benefits could mean increasing the full retirement age again or cutting benefits for everyone. Congress could also pass legislation that would generate more revenue for the SSA. There are two ways in which this can be done. The US government either increases the payroll tax rate or raises the maximum amount subject to Social Security payroll tax from $147,000.
The last time the federal program faced a reserve deficit was in 1983. The funding issue was handled through bipartisan legislation that, among other measures, charged an income tax on Social Security benefits and gradually raised the full retirement age from 65 to 67.
The Social Security 2100 Act, recently introduced by House Democrats, would boost retirement benefits for low-income employers, reintroduce the payroll tax rate for those making more than $400,000, and change the consumer price index to which the cost-of-living adjustment is tied.
According to the experts we’ve talked to, legislation regarding Social Security can’t be passed through reconciliation (this procedure allows the Senate to pass legislation with a majority of 51 votes). This means that any legislation would require support from both Republicans and Democrats.
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