What Might It Take to Repair Social Security—and What Could It Cost Workers?

Shoring up Social Security’s approaching financing gap could ultimately require higher taxes for American workers, as lawmakers come under mounting pressure to act before the program reaches a serious cash shortfall.

The most recent trustees report says the Old-Age and Survivors Insurance Trust Fund, which pays retirement and survivor benefits to millions of Americans, is projected to run out of reserves in 2032. After that, incoming revenue would be enough to cover only 78 percent of scheduled benefits, implying an across-the-board cut of 22 percent.

That would not mean Social Security stops paying altogether, since payroll taxes would still continue to flow into the system. But unless Congress changes the program’s financing, the money coming in would no longer be sufficient to support benefits at their currently promised levels. Social Security’s costs have exceeded total income since 2021 and are expected to remain above income throughout the trustees’ 75-year projection window.

The impact of letting the shortfall persist would extend well beyond retirees. In July 2026, about 71.3 million people were receiving Social Security benefits, including roughly 57.6 million retirement beneficiaries, 5.8 million survivor beneficiaries and nearly 8 million disability recipients.

Because the gap is so large, almost any full solution would involve a trade-off somewhere, whether through added revenue, reduced future spending or some mix of both.

What Might Workers Have to Pay?

One possible fix would be to raise the Social Security payroll tax rate. At present, workers pay 6.2 percent of their earnings into Social Security, employers pay another 6.2 percent, and the combined rate is 12.4 percent. In 2026, the tax applies only to the first $184,500 of earnings. Self-employed workers pay the full 12.4 percent themselves.

If the financing gap were closed entirely through higher payroll taxes, workers’ current 6.2 percent contribution could rise to roughly 8.3 percent to 8.7 percent, according to scenarios cited by the Cato Institute, a libertarian think tank, in its 2025 paper, “Congress Can’t Outgrow or Inflate Away the Social Security Financing Problem.”

For a worker earning $50,000, that would amount to roughly $1,100 to $1,200 more each year. Someone making $100,000 could pay about $2,100 to $2,500 more, while a worker at the 2026 taxable maximum of $184,500 could see an increase of around $3,900 to $4,500 annually.

Those estimates reflect only the worker’s share. If the tax remained split evenly, employers would be responsible for an equal amount.

Still, raising the rate for everyone is only one of the options under discussion.

Broadening Taxes on Higher Earners

Another idea gaining traction in Congress would expand the share of high earners’ wages subject to Social Security tax.

In June, Democratic Senator Elizabeth Warren of Massachusetts and Republican Senator Bernie Moreno of Ohio said they were working together on legislation to lift the payroll tax cap. Under current rules, someone earning $184,500 pays Social Security tax on the same maximum amount of wages as someone earning far more. Warren and Moreno have argued that lifting the cap could generate more revenue without raising Social Security taxes for workers below the threshold.

The proposal has also drawn some support from other Republicans. House Appropriations Committee Chair Tom Cole of Oklahoma told The Washington Post that he would be open to considering both a higher payroll tax rate and a larger share of income subject to tax. Cole has also said options that reduce future spending, including changes to the retirement age, should be considered alongside new revenue.

Another proposal, introduced in 2025 by Senator Bernie Sanders of Vermont, Senator Warren and House Democrats, would subject income above $250,000 to Social Security taxes while boosting benefits by $2,400 a year. Sanders’ office said the plan was intended to keep Social Security fully funded for 75 years.

The Congressional Budget Office has also examined raising the taxable share of earnings and applying payroll taxes to income above $250,000 as possible policy choices. In a 2024 analysis, the office estimated that the latter approach would reduce federal deficits by about $1.43 trillion over the 2025-to-2034 period, though that estimate was not a formal recommendation.

Other Options Congress Could Consider

Tax increases are not the only ideas on the table. Republican Senator Bill Cassidy of Louisiana has promoted creating a separate investment fund that would operate alongside Social Security. His plan would place $1.5 trillion into the fund over five years and invest the money in hopes of generating returns that could help cover future program costs.

Cassidy has also joined Democratic Senator Dick Durbin and other lawmakers from both parties on the PROMISE Act, which would set up a congressional process for developing a long-term Social Security solution rather than spelling out a specific package of tax and benefit changes.

Benefit reductions could also become part of any eventual deal. Options reviewed by the Congressional Budget Office have included gradually raising the full retirement age and trimming benefits for some higher earners. Those approaches would lower program spending, but they would also alter the benefits received by affected retirees.