The Senate Finance Subcommittee on Social Security, Pensions, and Family Policy met June 24, to weigh the future of Social Security. Members and witnesses agreed on the urgency of a looming shortfall but were divided over how to close it.
Without congressional action, the program’s primary trust fund is projected to run dry in 2032, triggering an automatic 22% benefit cut for every beneficiary.
Chairman Chuck Grassley (R-IA) used his opening statement to argue that revenue alone cannot fix the program, warning that the gap “cannot realistically be plugged simply through tax hikes on the wealthy” — the Democrats’ favored solution, nor by only curbing waste, fraud, and abuse — the Republican one.
Democrats press to lift the cap
Ranking Member Bernie Sanders (I-VT) used the hearing to promote his Social Security Expansion Act, S. 770, which would extend the Social Security payroll tax to all income above $250,000, including investment income. Under current law, the tax applies only to wages up to $184,500, leaving earnings above that cap untouched.
“My goal is to increase Social Security benefits, expand the solvency of Social Security … but do it in a way that benefits working people, and ask the wealthiest people in this country, who have never had it so good, to start paying their fair share of taxes,” Sanders said.
Nancy Altman, president of Social Security Works, endorsed that approach, telling the subcommittee that decades of widening income inequality have pushed a growing share of earnings above the cap and drained the program of revenue. In her written testimony, she cast the choice as one of priorities: “Whether Social Security’s modest benefits are increased or cut is a question of values, not affordability.”
Senator Ron Wyden (D-OR) pressed the fairness theme, contending that wage earners such as nurses and electricians have payroll taxes withheld from every paycheck while high earners can arrange their affairs to avoid them. Altman agreed the disparity was unfair. Citing public opinion, she said every poll shows Americans across the spectrum “want this solved on the revenue side, not with a single penny of benefit cuts.”
Business advocates push back
Elizabeth Milito, vice president and executive director of the National Federation of Independent Business (NFIB) Small Business Legal Center, warned that lifting the cap would reach well beyond the wealthy. She testified that 85% of small businesses are organized as pass-through entities, reporting their business income on their owners’ individual returns.
In her written testimony, Milito argued the bill is “not simply a tax increase on wealthy individuals but on the revenue a small business owner needs to operate, grow, and expand their small businesses.” Because the $250,000 threshold is not indexed for inflation, she added, a levy that initially hits a small number of owners “could become a tax on many, many more taxpayers, savers, and small businesses in the future.”
Senator Ron Johnson (R-WI) sharpened the point, arguing that a roughly 12% payroll tax increase would drain money that small business owners would otherwise plow back into equipment and jobs. Milito, who pegged the measure at $33.8 trillion in new taxes, told members flatly, “you can’t tax your way out of fiscal crisis.”
The case for balance
Shai Akabas, vice president of economic policy at the Bipartisan Policy Center, urged a middle path. He testified that the 2032 cut would cost a married couple of two average earners roughly $10,600 a year.
Akabas agreed that higher earners should contribute more but cautioned against leaning on revenue alone, telling the subcommittee that “increasing revenue, including through changes to the taxable maximum, should certainly be on the table as part of a comprehensive solution.”
Lifting the cap without adjusting the benefit formula, he warned, would sever the link between contributions and payouts that he said underpins the program’s durability. In his written testimony, he put it plainly: “There is no credible reform package that relies exclusively on one side of the ledger.”
The hearing also exposed a divide over the benefit side. Senator Thom Tillis (R-NC) questioned why gradually raising the retirement age for workers decades from retirement should be off the table. Altman countered that Social Security “is insurance, it’s not saving,” and that indexing benefits downward would amount to a cut.
Calls for a bipartisan commission
Witnesses and members repeatedly invoked the 1983 overhaul as a template. Akabas pointed to the Bipartisan Social Security Commission Act of 2026, H.R. 9187, introduced by Representatives Tom Cole (R-OK) and Tom Suozzi (D-NY), as a way to force both parties to share the political risk.
Senator Bill Cassidy (R-LA) warned that delay would only raise the price, turning the projected 22% benefit cut into a 28% one, while Senator Catherine Cortez Masto (D-NV) and Akabas noted that broader immigration reform would add workers, and revenue, to the system.
Grassley returned to the case for compromise, invoking the last major fix: “As in 1983, Republicans and Democrats will need to sit down together to consider a wide range of reform options. It’s the only way we’ll find a solution that can clear 60 votes to pass the Senate.”
For Akabas, the cost of waiting was the through line. “When both parties decide the cost of inaction exceeds the cost of action, a deal gets made,” he told the subcommittee. “The American people are at that point. Congress needs to catch up.”
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