Millions of Social Security recipients could receive higher payments under a proposal from Sen. Bernie Sanders that aims to increase benefits and address the program’s projected funding shortfall.
The Vermont independent senator, who caucuses with Democrats, is urging lawmakers to expand Social Security rather than consider reductions as Congress examines the program’s long-term finances. According to the Social Security Administration, the trust fund is expected to cover 78 percent of scheduled benefits by 2032 without legislative action, which would result in a 22 percent reduction for beneficiaries.
The proposal comes as many older Americans face financial pressure. Sanders said more than 20 percent of seniors are living on less than $15,000 a year, while nearly half are trying to manage on less than $30,000 annually.
Sanders Plan Would Raise Payroll Taxes on Income above $250,000
Sanders is calling for changes to the way Social Security taxes are collected. Under current rules, workers and employers each pay a 6.2 percent payroll tax on earnings up to a yearly limit, which is $184,500 in 2026. Income above that amount is not subject to Social Security payroll taxes.
The senator’s proposal would apply the payroll tax to income above $250,000, including certain investment income such as capital gains and dividends. Sanders argues that the change would require wealthier Americans to contribute a larger share of their income to the program while leaving the bottom 91 percent of earners unaffected.
According to a 2023 analysis by the Social Security Administration’s chief actuary cited by Sanders, the approach could extend the program’s solvency for 75 years while increasing benefits by $2,400 a year and expanding cost-of-living adjustments.
Sanders has argued that the current tax structure places a heavier proportional burden on middle-income workers because the payroll tax stops applying after the annual earnings limit is reached. He cited the example of someone earning $184,500 paying the full 6.2 percent tax rate on their wages, while a person earning significantly more would pay a smaller percentage of their overall income.
The proposal has received support from some progressive lawmakers and organizations, though it faces opposition from Republicans who have generally resisted increasing payroll taxes on higher earners.
Debate Continues over the Future of Social Security Funding
Alongside his benefits proposal, Sanders has criticized the PROMISE Act, a bipartisan bill that he says could allow faster changes to Social Security through a congressional process involving an unelected commission.
In a letter to Democratic lawmakers, Sanders argued that changes to Social Security should not be made through procedures that limit public debate. He called on Democrats to oppose reductions in benefits, increases to the retirement age, lower cost-of-living adjustments, and privatization of the program.
According to the AARP, the organization also objected to fast-tracking Social Security changes through Congress, arguing that decisions affecting the program should follow a transparent legislative process.
Supporters of a broader debate over Social Security financing say the program’s challenges require action from Congress. Financial analysts cited by Newsweek noted that raising the income cap alone may not resolve every funding issue and that additional measures could be considered. Any changes to Social Security benefits or taxes would require approval from Congress and the president before taking effect. Sanders is asking Democratic lawmakers to publicly support his approach as negotiations over the program’s future continue.
