Social Security Field Office in Whitehall, Ohio. (Photo: Marty Schladen, Ohio Capital Journal.)
Republican U.S. Senator Bernie Moreno and Democratic Senator Elizabeth Warren of Ohio have proposed a solution to the Social Security problem. Observers praised the measure but said more needed to be done.
The senators from Ohio and Massachusetts made an unlikely team when they co-authored a paper last Tuesday proposing a solution to Social Security.
The external group praised the proposal as an crucial first step, but called for additional action.
Warren, D-Mass., is a leading progressive and one of President Donald Trump’s favorite targets racist insults. Moreno took office in 2024 thanks in part to Trump’s support and his embrace of the MAGA movement.
However, the two joined forces to advocate for a solution to the looming insolvency of the Social Insurance Institution.
“We don’t agree on everything, but we do agree on one thing: Congress must act now to save Social Security for future generations of Americans.” – he wrote in the New York Times.. “Social Security is a key part of our nation’s promise — a covenant between the federal government and Americans who contribute throughout their working lives so they can retire with dignity.”
They explained that retirement benefits for older Americans are once again at risk.
“There is a risk that this promise will be unraveled,” Moreno and Warren wrote. “For years, seniors in Ohio and Massachusetts have been telling us how concerned they are about the future of Social Security.”
They were referring to a report earlier this month by the Social Security Oversight Board, which found that Social Security will become insolvent by 2032 and Medicare, the health program for older Americans, will become so six months later.
If this happens, the average Ohio beneficiary will have to live on $487 less per month.
It is estimated that if Social Security is not fixed, the average Ohioan will lose $487 per month
There are 2.2 million Social Security beneficiaries in Ohio, and their average benefit is just $1,900 a month, so default would mean losing a quarter of their already meager income.
“It’s just six years away. Instead of cutting benefits for retirees who rely on Social Security, we must take bipartisan action to protect those benefits, reward work and restore fairness,” Warren and Moreno wrote.
“It starts with a common-sense solution: raising the Social Security payroll tax cap.”
National Insurance is financed by a 6.2% tax paid by employees and paid by their employers. However, it is only paid on the first $184,500 of wage income.
This means that the expansive majority of workers pay Social Security tax on all their income, but some wealthier Americans do not, and the wealthiest pay only a tiny portion of their income.
Moreno and Warren thought it was unfair.
“Why should a middle-class nurse pay a larger portion of her salary than a wealthy corporate lawyer?” they asked. “This is doubly unfair in an economy where the wages of the highest earners, over timeovertook the results of the average employee.”
They added that removing the cap would keep Social Security solvent for a generation.
Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget, said there is a double risk if elected leaders only think in terms of one amendment and one generation.
“It’s good that Senator Warren and Senator Moreno said we need to do something about this,” Goldwein said in an interview in which he called the senators’ proposal a “totally reasonable idea.”
“But to say that this is the whole solution is wrong,” he said. “Politicians need to talk about this because time is running out.”
He called the Warren-Moreno proposal a “max tax increase” and called it “the most popular and most discussed revenue-increasing plan.”
Moreover, Goldwein said, it would seriously solve the solvency problem.
His group estimates that getting rid of the cap would close the solvency gap 50% and delay bankruptcy by 22 years if the benefit rules remain the same.
But “it can’t be a total solution,” Goldwein said. “There’s not enough money there. For starters, I think it goes without saying that any Social Security reform plan will require more revenue.”
Goldwein, who has covered Social Security and related issues for the executive branch and congressional committees, added: “Regardless of your ideological point of view, we no longer have time to deal with this solely on the benefits side. We only have six years until default, and we just can’t get the benefit savings fast enough.”
Therefore, it recommends proposing a package of reforms that will ensure the solvency of social security for the next 50-75 years.
“We don’t want something that’s going to make us feel really good but that’s going to bring us back here in a few decades,” Goldwein said.
This approach is especially unsafe because when lawmakers face another crisis, the most palatable options will no longer be considered, he said.
The Committee for a Responsible Federal Budget has already proposed several reforms, and Goldwein said many more are in the works.
One would be to limit spending by limiting the amount a couple can collect from Social Security to $100,000 a year.
Another would limit the rate of cost-of-living increases for the wealthiest recipients so that their dollar amounts match those of the next lowest-income group.
Goldwein proposes another reform that would replace Moreno and Warren’s “raise the tax cap” proposal.
It would require employers to pay tax on all wages.
“This would raise an amount similar to the maximum tax amount, but does it in a much more efficient way,” Goldwein said. It would be a tax on all wages above the $184,500 limit, “but it would also include all fringe benefits. Right now, employers receive tax breaks for paying employees in the form of health care, stock options, or transportation benefits.
When default threatened in 1981, Congress appointed a commission that proposed a package of reforms, many of which were amended in the Social Security Act two years later.
Goldwein said a similar commission could be established now and work to a tighter schedule because there are already many viable proposals.
When it comes to Medicare, Goldwein said Congress would be wise to approach it piecemeal.
“With Social Security, you really want to solve this problem right away,” he said. “With Medicare, you can work on it incrementally, because a lot of Medicare is about how to get the payment structure right. How to get people to the best kind of care at the lowest cost. We can do it step by step as we learn more.”
