Bipartisan Lawmakers Propose Raising Social Security Payroll Tax Cap

A bipartisan group of U.S. lawmakers is proposing to raise or eliminate the Social Security payroll tax cap to prevent a projected funding shortfall. Senator Bernie Moreno and Senator Elizabeth Warren co-authored an op-ed describing the proposal as a "common-sense solution." Other Republicans, including Representatives Tom Cole and Lloyd Smucker, have expressed openness to the strategy.

Social Security trustees report a 75-year unfunded obligation of nearly $30 trillion. They warn that the retirement trust fund may only be able to pay 78% of scheduled benefits by the fourth quarter of 2032. The Roosevelt Institute suggests that fully eliminating the cap could cover 67% of this solvency gap.

Critics from the Tax Foundation and the American Enterprise Institute argue that the move would constitute the largest tax increase since 1982. These organizations warn that such a hike could reduce GDP, eliminate jobs, and limit the government's ability to raise revenue for other programs, such as Medicare.