Experts warn that the Social Security trust fund may run dry sooner than expected, urging Congress to act to prevent a 25% cut for millions of retirees and their families.
Social Security is running out of reserves faster than expected: Will benefits be cut?
In June, the Social Security Trustees released their annual report on the public retirement program, highlighting one major threat to the benefits of more than 60 million retirees and their families. This year’s report includes a warning about the accelerating depletion of the trust fund and urges leaders on Capitol Hill to act.
In 2034, the Old-Age and Survivors Insurance (OASI) Trust Fund expects costs to exceed the income collected through payroll taxes. Previous reports had projected insolvency in 2035, but changes to federal law—such as benefit increases under the Social Security Fairness Act—have moved up that timeline.
How the Social Security Fairness Act impacts the Trust Fund’s solvency
One of the last bills passed under the Biden administration was the Social Security Fairness Act (SSFA), which repealed two laws that had, for decades, reduced the Social Security benefits of public sector workers—including teachers, firefighters, police officers—and their spouses. The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), enacted in the late 1970s and early 1980s, were designed to reduce government spending on Social Security. These provisions lowered benefits for workers, as well as their qualifying spouses and survivors, if they received a government pension.
The repeal of the WEP and GPO through the SSFA means that eligible recipients are now receiving checks for the first time or have seen a boost in the value of their benefits. The new law has increased the amount of money distributed by the Social Security Administration (SSA), which the Trustees Report indicates is contributing to the quicker depletion of the trust fund.
Between May 2024 and May 2025, the number of spouses of retired workers receiving benefits jumped by 6 percent. In contrast, between 2023 and 2024, that figure had fallen by 4.56 percent. The sharp increase over the last year highlights, in part, the role the SSFA has played in expanding access to benefits for those who had previously been excluded.
The risk to benefits if Congress fails to address the Fund’s insolvency
The authors of the report warn that if Congress does not act to increase the Trust Fund’s revenue or reduce costs—measures that would likely trigger political backlash from retirees and their families—benefits will be automatically reduced by 25.8 percent. The report outlines several options that Congress could consider to support the fund’s solvency, including raising the Social Security tax rate on both workers and employers, increasing or eliminating the maximum level of taxable earnings (currently $176,100), or reducing benefits.
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Researchers at the Peter G. Peterson Foundation found that eliminating the earnings cap would reduce the Trust Fund’s revenue shortfall by 53 percent over the next 75 years, likely delaying the insolvency date that would trigger automatic benefit reductions. However, this change alone would not be enough to close the entire funding gap.
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