A newly introduced act seeks to prompt Congress to act to preserve the Social
Security benefits
for seniors that millions of retirees depend on. A bipartisan group of
senators introduced the Protecting Retirement Opportunities and Maintaining
Income Security for Everyone (PROMISE) Act to establish a process for Social
Security reform in light of the program’s approaching financial shortfall.
With more than 71 million Americans relying on Social Security benefits every month and
time to act before the Social Security trust fund runs out, the PROMISE Act
brings more public attention to this essential issue.
What the PROMISE Act does and doesn’t do
The PROMISE Act doesn’t implement any immediate changes to the Social Security
program. It doesn’t raise taxes, reduce benefits, change eligibility, or
otherwise alter the program.
If passed, the Act would create a process to prompt a reluctant Congress to vote
on a solvency plan. It would require the Social Security Advisory Board to
gather public input and then submit a base bill to Congress designed to restore
at least 50 years of solvency to the Social Security program. The Majority
leaders of the Senate and House would introduce the base bill, and other members
of Congress would be able to introduce the bill if the leaders failed to act.
From there, the Senate Finance Committee and House Ways and Means Committees
would review the bill, and then it would be brought to the House and Senate
floors for a vote. A final bill would need 60 Senate votes to pass.
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Backing for the PROMISE Act
The PROMISE Act has been introduced by a bipartisan Senate group including Dick
Dubin, Bill Cassidy, John Cornyn, Tim Kaine, Angus King, and Thom Tillis.
It’s not the only bill created to prompt Congress to take action on the Social
Security issue. House Representatives Tom Cole and Tom Suozzi introduced the
Bipartisan Social Security Commission Act. The Act seeks to create a commission
responsible for developing legislation to ensure the Social Security program’s
long-term solvency. The House Act takes a similar “force action” approach in an
attempt to require Congress to identify and implement a solution.
Why Congress needs to act
The 2026 Trustees of the Social Security and Medicare trust funds report
projects that the Old-Age and Survivors Insurance (OASI) trust fund may be
depleted during the fourth quarter of 2032. That projection comes one quarter
earlier than the Trustees projected last year.
If the OASI trust fund becomes depleted, the program’s income from payroll taxes
would only be able to pay 78% of the total scheduled benefits. Benefits
reductions of about 22% would be automatically applied, leaving Americans who
depend on those monthly benefits to get by with less unless Congress takes
action to ensure the program’s solvency.
Legislators have proposed numerous potential solutions, but at this time,
Congress has yet to enact any of them.
Altering the payroll tax cap
Senators Elizabeth Warren and Bernie Sanders have called for Congress to raise
the cap on the Social Security payroll tax. In 2026, only the first $184,500 of
an individual’s earnings are subject to the Social Security tax. That means that
high earners only pay taxes on a portion of their income.
Raising or eliminating that tax cap might substantially increase the program’s
tax revenue. However, financial experts have noted that eliminating the cap
wouldn’t be enough to ensure Social Security’s solvency on its own.
Raising the full retirement age
Raising the full retirement age is often presented as one potential solution to
the program’s insolvency. Under current law, Americans may claim reduced Social
Security benefits at age 62, but the full retirement age at which individuals
may claim their full benefits is age 67.
Since Americans are living longer, legislators have suggested gradually raising
the full retirement age to 70, delaying some Americans from claiming benefits
and saving the program money. However, changing the retirement age would reduce
the lifetime benefits that Americans receive, and waiting to claim benefits
until age 70 may be impractical for older adults with physically demanding jobs.
Means-testing benefits
Some legislators suggest means-testing benefits and paying wealthier retirees
lower benefit amounts based on their reduced need for the money. Doing so might
save the program money while ensuring higher benefit amounts go to the retirees
who financially need them the most.
This idea is a controversial one, as it would change the Social Security
program’s structure. Social Security has been an earned-benefit program, but
means-testing would transform it into more of a welfare system.
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Adjusting the COLA formula
The cost-of-living adjustment is an annual calculation applied to ensure
benefits keep up with inflation. Modifying the formula to reduce the adjustment
may help save the program money each year.
Reducing benefits may increase financial strain for recipients, especially given
the current high inflation impacting the economy.
Raising the payroll tax rate
Legislators have discussed raising the Social Security payroll tax rate to
generate more revenue for the program. Doing so would tax workers more, but it
might also mean that Congress doesn’t have to cut Social Security benefits for
recipients.
Bottom line
The PROMISE Act faces a difficult path toward approval in Congress, and similar
efforts have stalled before. Some analysts call the PROMISE Act redundant, since
Congress is already responsible for forcing action and addressing Social
Security’s insolvency.
No benefit changes take effect now, but this is an important issue to monitor as
it evolves. In the meantime, be sure to factor the 2032 timeline into your
longer-term retirement
plan so you’re prepared for any changes that might occur.
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Author Details
Paige Cerulli
Paige Cerulli has covered personal finance for more than 15 years and writes about the money news readers can actually act on. In particular, she helps people claim what they are owed from class-action settlements, understand Social Security COLA changes and Federal Reserve rate moves, and make the most of everyday decisions around insurance, mortgages, and credit cards. Her work has appeared in U.S. News & World Report and Kiplinger.
