Social Security

Social Security is the federal government's largest single program — paying retirement, disability, and survivor benefits to approximately 70 million Americans at a cost of roughly $1.4 trillion annually. Created in 1935 under President Franklin Roosevelt, Social Security has been the bedrock of retirement security for American workers: workers and employers each pay 6.2 percent of wages into the system, which then pays out benefits in retirement based on lifetime earnings history. The Social Security trust funds — which hold accumulated surpluses — are projected to be depleted by approximately 2033, at which point the program could pay only about 79 percent of promised benefits using ongoing payroll tax revenue alone, unless Congress acts. This looming insolvency is one of the defining fiscal policy challenges of the coming decade. Options for shoring up solvency include raising the payroll tax rate, lifting the cap on taxable wages (currently $168,600), cutting benefits, raising the retirement age, or some combination. Any changes are politically explosive: seniors vote at higher rates than other age groups, and Social Security is often called the 'third rail' of American politics — touch it and you die politically. Separately, the Social Security Fairness Act, signed into law in early 2025, eliminated provisions that had reduced Social Security benefits for millions of government workers and their spouses.