Social Security has a serious problem. The cost of benefits is rising faster than tax revenues and trust fund interest as the baby boom generation retires. As a result, the program has operated at a deficit every year since 2021, and administrators expect the problem to persist indefinitely until Congress intervenes.

This situation is slowly depleting the AVS trust fund, the source of Social Security benefits paid to retirees, spouses and survivors. The trustee estimates that the AVS trust fund will be depleted by 2033, at which point continued income tax revenues will cover 79% of planned benefits. This means a 21% benefit cut could be made automatically over the next decade.

In total, Social Security faces an estimated $22.6 trillion funding gap over the next 75 years. Congress is well aware of the situation, although lawmakers have so far been unable to put aside differences in political ideology to reach a solution. However, a recent survey by the University of Maryland Public Consultation Program (PPC) suggests that a bipartisan solution is possible.

Read on to learn four hypothetical changes to Social Security that could eliminate the entire funding gap in the long term. Importantly, each change has a high level of support among Republicans and Democrats.

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1. Subject salaries above $400,000 to Social Security payroll taxes

Social security is primarily funded by a dedicated payroll tax, through which workers and employers collectively contribute 12.4% of employee wages. However, taxable income is capped under current law. The taxable income cap is $168,600 in 2024, meaning any wages above that level are not taxed by Social Security.

One potential solution would be to apply Social Security payroll taxes to all income above $400,000. This change would theoretically eliminate 60% of the long-term funding gap, and the proposal has bipartisan support among voters: 86% of Republicans and 89% of Democrats support the change, according to the University of Maryland PPC.

2. Increase the social security contribution rate to 6.5% over six years

The Social Security payroll tax rate is currently 6.2%, so workers and employers pay 6.2% of employee wages, for a collective total of 12.4%. But one potential solution would be to increase the tax rate by 0.05% per year over six years, so that workers and employers would eventually pay 6.5% of employee wages, for a collective total of 13%. .

This proposal would theoretically eliminate 15 percent of the long-term funding gap, and it has bipartisan support among voters: 87 percent of Republicans and 87 percent of Democrats support the change, according to the University of Maryland PPC.

It’s important to note that the two changes discussed so far would increase revenues for the Social Security program, but the next two changes would amount to benefit reductions. Whatever changes Congress makes to Social Security in the future, historical precedent indicates that they will likely result in a combination of revenue increases and benefit reductions.

3. Gradually raise the full retirement age (FRA) to 68 by 2033

Workers are eligible for retirement benefits at age 62, but they are not entitled to their full benefits, also known as primary insurance amountunless they wait full retirement age to start collecting social security. As a reminder, the full retirement age is 67 for workers born in 1960 or later. Anyone who claims Social Security before full retirement age has their benefits permanently reduced.

One potential solution would be to raise the full retirement age to 68 by 2033, which would impact workers born in 1965 or later. This change would theoretically eliminate 15 percent of the long-term funding gap, and it has bipartisan support among voters: 91 percent of Republicans and 88 percent of Democrats support the change, according to the University of Maryland PPC.

4. Cut benefits for workers whose incomes belong to the richest 20% of the population

Social Security benefits are determined as a percentage of three curvature points. First, earnings from the 35 highest-paid work years are indexed for inflation and then converted to a monthly average called the Average Indexed Monthly Earnings Amount (AIME). Second, AIME is managed by a formula which uses curvature points to calculate the primary insurance amount for each worker.

One potential solution would be to change the third (highest) inflection point to limit Social Security benefits to workers with incomes in the top decile (20%) of the population. This change would theoretically eliminate 11% of the long-term funding gap, and it has bipartisan support among American voters: 92% of Republicans and 93% of Democrats support the change, according to the University of Maryland PPC.

In conclusion, readers should remember that the solutions I have discussed are entirely hypothetical at this time. However, benefit cuts are inevitable without Congressional intervention. Americans should therefore familiarize themselves with potential solutions in order to understand the magnitude of the Social Security funding gap.