If there’s one issue on which most voters agreed this election period, it’s the need to fix Social Security before potential cuts take place in 2032. It’s a concern that transcends political affiliations and age groups.

So did this election create the opening to solve the problem of Social Security “running out” of money in the next five years? While there may be general agreement that something must be done, and soon, it appears the divisions remain wide about the specific solutions. I spoke with both “sides” this past week, after the elections.

The real concern

The Social Security trustees report says that if nothing is done, current retirees might face benefit cuts of 22%, or more, starting in 2032. It’s a scary prospect, but not a sure thing, because Congress could always act at the last minute to pay promised benefits out of general revenues, adding to the deficit.

Nearly half of seniors rely primarily on their Social Security benefits for most or all of their income, so potential cuts are a source of panic. But those approaching retirement share the concerns. And even more troublesome, the younger generations are awakening to the possibility that they are paying into a system that is unlikely to give them any meaningful benefit when they retire.

FICA stands for Federal Insurance Contributions Act. Those payroll deductions are hardly a voluntary contribution. They are a tax on current workers.

But allowing the system to reduce benefits for current recipients would create a stark awareness of the generation gap: Today’s retirees depend on current workers to pay into the system to keep it going.

(Yes, I know that’s the definition of a Ponzi scheme, so read on for one potential solution. Meanwhile, the problem is how to keep the system going.)

THE AARP solution

AARP, which is one of the largest groups representing seniors, called a press conference after the election to assess the situation and propose their solution.

They note that the share of income from wages that is subject to FICA (as opposed to from investments and interest) has fallen from 41% of GDP in 1983 to only 34% today. So, FICA has captured nearly $11 trillion less for the trust fund in the intervening years.

And they also point out that the annual “cap” on earnings subject to FICA has failed to keep up with inflation. In 2026, income up to $184,500 is subject to FICA. That rises to $192,300 in 2027.

AARP provided a simple solution to solve most of the funding problem: Simply lift the cap entirely, and require FICA to be collected on ALL income.

Already 96% of workers are subject to FICA on all their income: those who fall under the current cap. Only 6% of workers have income that exceeds the current cap.

Surely, said AARP at the news conference, those high earners should be subject to the 6.2% tax (matched by employers) in the name of fairness. (Note that higher earners already pay an unlimited 0.9% Medicare tax, which is not matched by employers).

It’s a simple solution that AARP says would cover two-thirds of the long-term (75-year) funding gap if those additional FICA “contributions” were not used to increase benefit payments to those retirees. If the additional contributions were included in retiree benefit calculations, only about 50% of the funding gap would be solved by lifting the cap.

When asked if raising the retirement age gradually should be part of a long-term solution, AARP said it is committed to never reducing the overall lifetime benefits of today’s workers — something a delayed retirement age would impact.

The reaction

I asked a highly placed Washington political insider if the post-election period might be the right time to attack the problem of Social Security funding. He agreed Social Security should be high on the agenda. But when I told him about the AARP press conference, he laughed.

“That’s a $3 trillion tax increase they’re talking about. No Republican will ever vote for that!” And that’s a direct quote.

But it’s Social Security, I protested. And these newly elected senators of both parties will face the crisis in their terms. Surely, a compromise is possible? “Not likely,” he responded. “They’ll probably wait until the last minute and then fund it out of general tax revenues.”

I walked away from the conversation stunned. If ever there was a moment, if ever there was an immediate issue for compromise, certainly fixing Social Security must be that event.

And in the meantime, your sharp eyes have noticed that even lifting the FICA cap would solve at most two-thirds of the funding problem. Can anything save the entire system? Economist Larry Kotlikoff has proposed we set up personal savings accounts, owned by individuals, which would grow alongside the current Social Security system, while Social Security provides all promised benefits. But that’s a complex subject for another column.

In the meantime, we should all be watching closely to see what the new Congress does to fix the oncoming Social Security funding gap. And that’s The Savage Truth.

©2026 Terry Savage. Distributed by Tribune Content Agency, LLC.