Fixing Social Security’s Funding Shortfall: Challenges and Proposals

Americans face differing opinions on how to address Social Security’s financial challenges as the program nears a funding shortfall that could lead to automatic benefit cuts within the next decade. A survey by the Ronald Reagan Presidential Foundation and Institute reveals a lack of consensus on popular proposals such as tax increases, benefit cuts, or raising the retirement age.

Public Opinion and Proposed Solutions

The survey, involving 1,244 registered voters, highlights limited enthusiasm for major fixes to address Social Security’s projected $250 billion shortfall. There’s no clear preference among options like reducing benefits, increasing taxes, or raising the retirement age. Of these, raising the retirement age secured the most support, though only 26% of respondents favored it.

Majorities across parties rejected specific reforms. About 40% of respondents suggested increasing taxes on wealthy individuals or corporations while 17% believed the shortfall resulted from governmental mismanagement. Another 13% expressed interest in cutting national security or defense spending to resolve the funding gap.

Means Testing as a Preferred Solution

Support for solutions appears stronger for targeted sacrifices among wealthier groups. A proposal to reduce benefits for affluent retirees gained significant support. Respondents preferred this option over broader tax increases or universal cuts. Approximately 71% favored reducing benefits for wealthier retirees, including 75% of Democrats, 72% of independents, and 66% of Republicans.

When faced with a direct choice between tax increases and benefit reductions, voters opted for raising taxes by a two-to-one margin. Young voters leaned toward reducing benefits, whereas older voters preferred tax increments.

Legislative Proposals and Political Responses

Both Democrats and Republicans have proposed different plans to extend Social Security’s solvency. The Social Security Expansion Act, introduced in 2025 by Senator Bernie Sanders and Representative Val Hoyle, aims to increase benefits and impose payroll taxes on incomes above $250,000. It also proposes higher minimum benefits for low-income earners and adjusts cost-of-living allowances using an inflation measure focusing on seniors.

The Fair Share Act by Senator Sheldon Whitehouse and Representative Brendan Boyle mandates wealthier taxpayers to pay Social Security taxes on higher income thresholds.

A bipartisan initiative by Senators Bill Cassidy and Tim Kaine suggests creating an investment fund to offer higher returns via stocks and bonds. The plan involves a $1.5 trillion government investment to supplement payroll tax revenue in the future.

Raising the retirement age is also under consideration. For individuals born in 1960 or later, the full retirement age (FRA) will be 67, effective for those turning 65 in 2026. The Republican Study Committee proposed gradually raising the FRA to 69 for younger workers, as part of its budget plan titled “Fiscal Sanity to Save America.”