Fixing Social Security means raising taxes — and not just on the superrich

“Social Security reform” is one of those soundbites you might hear every election cycle without anything ever changing. Politicians have been sounding the alarm for decades, saying that the program — which helps retirees, people with disabilities, and their families stay afloat — is quickly running out of money. So what’s actually at stake?

Social Security is a pay-as-you go system, so taxes collected from today’s workers are spent on current beneficiaries. But because the workforce hasn’t grown as fast as the number of baby boomers entering retirement, there’s more being taken out of Social Security than being put in. The federal government relies on trust funds to fill the gaps, but those reserves are projected to be entirely depleted by 2035, according to the Congressional Research Service.

That doesn’t mean that the government won’t have any money left. But if Congress doesn’t do anything before those reserves are gone, the government will only be able to honor 83 percent of the scheduled benefits, which means that most, if not all, recipients of Social Security will see their household incomes fall. (By 2098, the government would only be able to cover 73 percent.)