Reuters reports that lawmakers on the Senate Finance Subcommittee on Social Security, Pensions, and Family Policy debated competing approaches to strengthening Social Security during a June 24 hearing, with members agreeing that action is needed but remaining divided over how to address the program’s long-term funding challenges. 

Without congressional action, Social Security’s primary trust fund is projected to become insolvent in 2032, triggering an automatic 22% reduction in benefits for all recipients. Chairman Chuck Grassley, R-Iowa, argued that neither raising taxes nor reducing waste alone would be enough to close the funding gap, calling for a broader bipartisan solution. 

Democrats focused on increasing revenue through the Social Security Expansion Act, which would apply payroll taxes to income above $250,000, including investment income. Sen. Bernie Sanders, I-Vt., said the proposal would strengthen the program while asking “the wealthiest people in this country, who have never had it so good, to start paying their fair share of taxes.” 

Business groups opposed the proposal, arguing it would place additional burdens on small businesses. Elizabeth Milito of the National Federation of Independent Business testified that many pass-through businesses would be affected, saying the proposal is “not simply a tax increase on wealthy individuals but on the revenue a small business owner needs to operate, grow, and expand their small businesses.” 

Several witnesses urged lawmakers to consider a balanced approach that includes both revenue increases and benefit reforms. Shai Akabas of the Bipartisan Policy Center warned that “there is no credible reform package that relies exclusively on one side of the ledger” and emphasized that delaying action will only make future changes more difficult. Lawmakers from both parties pointed to the bipartisan 1983 Social Security reforms as a model for reaching a compromise before the projected funding shortfall takes effect.