Gas prices, health care and the war in Iran may be among the issues dominating voters' attention this election, but another enormous financial challenge awaits the next Congress: Social Security.
The group of senators elected this year will take office for six-year terms, putting them in Washington as Social Security approaches a critical funding deadline.
Under current projections, Social Security would face a funding shortfall beginning in 2032 -- something that could trigger benefit reductions unless Congress intervenes.
That looming deadline is fueling a debate over what lawmakers should do, including whether Washington should increase Social Security taxes on high-income Americans.
Social Security enters the campaign debate
From debates in Michigan to candidate forums in Maine, candidates have offered differing ideas for addressing the program's finances.
RELATED STORY | Could your Social Security check shrink? The funding problem Congress must confront
“I don’t think a lot of people know by law there would be a cut in 2032,” Republican nominee for Senate in Michigan Mike Rogers said during a recent Scripps News Group debate in Detroit.
Others, like Michigan's Democratic Nominee for Senate Abdul El-Sayed, have suggested eliminating the income cap on Social Security taxes. Senator Susan Collins in Maine has proposed creating a commission to address the program's finances.
“If Congress doesn’t act, then every current beneficiary [could] receive a 20% reduction in benefits,” former Social Security Commissioner Martin O’Malley said.
O’Malley, who led the Social Security Administration during the Biden administration, said the issue is becoming increasingly important to seniors.
Could higher taxes be part of the solution?
One of the central questions is whether higher-income Americans should pay more into the program.
Currently, the first $184,500 in annual earnings is subject to Social Security taxes, while earnings above that amount are not. One proposal would eliminate or alter that cap, subjecting more income earned by wealthy Americans to Social Security taxes.
O’Malley argues that approach could provide the foundation for a bipartisan deal.
“You would find that solution is supported by over 80% of people, and that is where I actually think where the art of the compromise is going to be found."
RELATED STORY | Interactive: Millions could see smaller Social Security checks by 2032
Other options could include raising the retirement age above 67, although O’Malley said he favors changes to the Social Security tax cap.
Any such change, however, could amount to a tax increase, creating another politically difficult debate for lawmakers. A report from the Trump administration this summer found that lower fertility rates, higher deportations and tax changes have contributed to fewer dollars flowing into Social Security.
Congress has faced a Social Security deadline before
The senators voters elect this year could ultimately be among the lawmakers charged with finding a solution before the end of 2032. But history suggests a deal may not come quickly.
The last time Congress confronted the prospect of significant Social Security cuts, in the 1980s, lawmakers did not reach an agreement until the deadline was just months away.
With another potential funding crisis approaching, the elections taking place now could help determine who will be at the negotiating table when Congress is eventually forced to act.
