Social Security faces a funding challenge that could affect millions of Americans who depend on their monthly checks, and the lawmakers taking control of Congress will have to decide how to address it.
Democrats won control of both chambers in the 2026 midterm elections, according to The Associated Press, giving them an opportunity to advance proposals to strengthen the retirement program.
Their proposals include requiring higher earners to pay Social Security taxes on more of their income, a move supporters say could bring additional revenue into the system without cutting benefits.
But turning those proposals into law will be difficult. President Donald Trump remains in office until January 2029 and can veto legislation he opposes.
That leaves millions of current and future beneficiaries facing an important question: Can lawmakers agree on a solution before Social Security’s reserves run out?
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Social Security faces a 2034 funding deadline
Social Security’s combined trust funds are projected to run out of reserves in 2034, leaving enough incoming revenue to cover only 83% of scheduled benefits, according to the program’s 2026 Board of Trustees report.
Once those reserves are gone, incoming payroll taxes would cover just 83% of scheduled benefits, triggering a 17% automatic cut under current law.
For the average retired worker currently receiving about $2,071 per month, that reduction would erase roughly $393 from each check. Nearly 71 million Americans depend on the program, and the cut would apply across the board unless Congress intervenes before the deadline.
The Committee for a Responsible Federal Budget (CRFB) called the shortfall the program’s largest in nearly half a century, warning that the delay narrows the options for every available fix.
Benefit spending supported 12.2 million jobs and generated $2.6 trillion in economic output during 2023, the National Institute on Retirement Security found.
Congress has known about this trajectory for years, because Social Security’s total costs have exceeded its revenue annually since 2021, the Congressional Research Service confirmed.
Each new Congress has received the shortfall without resolving it, and the incoming Democratic majority faces a deadline their predecessors chose to defer.
Democrats want higher earners to pay more into Social Security
Democrats have built much of their proposed funding strategy around increasing the amount of income subject to Social Security payroll taxes.
Workers and employers each pay 6.2% on earnings up to $184,500 in 2026, with income above that threshold exempt from the tax, the Social Security Administration (SSA) confirmed.
That means someone earning $1 million pays the tax on less than a fifth of their total wages, while a $100,000 earner pays the tax on every dollar.
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Several newly elected Democratic senators campaigned on removing the cap or reinstating the tax on earnings above $400,000, according to campaign statements compiled by Alliance for Retired Americans.
Democrats also have a full legislative blueprint in the Social Security 2100 Act, introduced in July 2026 by Senator Richard Blumenthal and Representative John Larson.
The bill would raise monthly benefits by 2%, strengthen payments for low-wage workers, and remove the earnings cap after 2026.
Larson framed the bill as a way to close the funding gap by raising revenue rather than reducing benefits. A higher cap may have bipartisan appeal, as Senators Elizabeth Warren and Bernie Moreno have both backed lifting it, according to Warren’s press release.
Democrats are pushing to lift Social Security’s taxable wage cap, targeting higher earners to strengthen retirement funding without cutting benefits.O2O Creative / Getty Images
Trump’s veto power could complicate Social Security reform
Democrats will set the legislative calendar in January, but any bill still needs Trump’s signature, and his term runs through January 2029.
Legislation passed over his objection would need a two-thirds override vote, and most Senate bills face a 60-vote filibuster threshold, according to the U.S. Senate.
Benefit taxation may offer common ground, because Trump has proposed lowering or eliminating taxes on Social Security checks under the One Big Beautiful Bill.
Broader solvency reform demands harder tradeoffs on revenue and benefits, and neither party has shown a willingness to accept the other side’s terms.
Romina Boccia, Director of Budget and Entitlement Policy at the Cato Institute, warned that both parties face short-term incentives to delay action. Democrats may hold out for full governing power in 2028, while Republicans resist payroll tax hikes they see as politically damaging, she told MarketWatch.
<strong>The greater risk is that gridlock preserves an unsustainable status quo, leaving younger workers to shoulder growing costs…,</strong>
Eliminating the payroll tax cap alone would close only about half of the solvency gap, the CRFB estimated. A bill that fully stabilizes the program would require the kind of bipartisan deal that makes a presidential veto irrelevant.
What the 2034 deadline means for your Social Security plan
Keeping Social Security benefits fully funded will require congressional action before the program’s reserves are depleted, according to the Committee for a Responsible Federal Budget.
The progress of negotiations in the Senate Finance Committee and other relevant committees will help determine whether lawmakers can agree on a solution before the deadline.
Boccia has warned that politicians may continue delaying difficult decisions, leaving households to prepare for a funding challenge they cannot control.
For workers nearing retirement, reviewing savings plans and preparing for the possibility of reduced benefits could help protect their finances. Current retirees face the same uncertainty if Congress fails to act before the depletion deadline.
Ultimately, the decisions lawmakers make over the next few years will determine whether millions of Americans continue receiving their full scheduled Social Security benefits or face smaller monthly checks.
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