Social Security needs more money. The question is, who will pay for it?

Social Security is the largest social insurance program in the United States, making payments to approximately 75 million Americans each month.

However, the program faces an immediate funding shortfall.

Social Security’s trust fund for retirement benefits could run out in 2032, according to projections from the Social Security Administration and the Congressional Budget Office, which could prompt benefit cuts across the board.

Social security has been on the brink of funding cuts in the past. In 1983, when the last major reforms to the program were enacted, Social Security was just months away from being able to pay out full benefits.

At the time, lawmakers voted in favor of a bipartisan bill that would tax benefit income and gradually raise the retirement age to restore the program’s solvency.

With the program facing a trust fund depletion deadline, leaders in Washington need to come together again to shore up the program’s funding — or risk imminent benefit cuts if the program fails to pay benefits as promised.

A Senate Budget Committee hearing on March 25 focused on the plan’s “future direction,” with some leaders saying Congress was up to the task.

“We can do it,” Sen. Sheldon Whitehouse (DR.I.) said of addressing the program’s shortcomings. “It’s actually not that difficult or complicated. And the sooner we do it, the better off everyone will be.”

Emerson Sprick, director of retirement and labor policy at the Bipartisan Policy Center, said changes to the program would require support from both parties because any new Social Security law would need to pass a 60-vote threshold in the Senate.

Additionally, the 2026 class of senators will be the first federally elected group to have to face an impending program exhaustion deadline within their six-year terms, Sprick said.

“Members of Congress and their staff recognize this is something that has to be done,” Sprick said.

It begins with discussions between members on both sides that can advance policy recommendations, he said.

But leaders in Washington still face major challenges in making those reforms a reality. The question is how to pay for it.

Here are some of the ideas being discussed by lawmakers and experts.

Over the next 75 years, Social Security will face a $25 trillion shortfall, according to projections by the program’s governing board. This is the difference between the estimated income received from the program and the benefits paid.

Sen. Bill Cassidy (R-Louisiana) said during a Senate Budget Committee hearing that the total amount, adjusted for inflation, would be about $674 trillion.

Cassidy said lawmakers have several options to address the shortfall: do nothing and cut benefits by an estimated 23% to 28%, or pass legislation that combines tax increases and benefit cuts. Cassidy said lawmakers last tried with a committee under President Barack Obama to find a solution that combined cuts and increases, but failed.

Or, as suggested by Cassidy, lawmakers could choose a third option. It would create a diversified investment fund to shore up the program’s finances. The senator’s proposal has not yet been formally introduced as a bill.

Under Cassidy’s plan, the government would borrow $1.5 trillion, which would be invested like a 401(k), the Louisiana senator said at a hearing. The fund will be separate from Social Security’s current trust fund and will be held in escrow for 75 years, he said. Cassidy said at the hearing that this balance will offset borrowings needed to pay scheduled benefits.

Cassidy said the plan includes “strict legal guardrails” to protect the funds, including independent operations focused on maximizing profits while preventing political interference. That includes annual audits and full transparency, he said.

BlackRock CEO Larry Fink recently wrote in his annual letter to shareholders that Social Security funding should be allowed to grow with the economy. He wrote that the Social Security Fund could invest its funds more aggressively and achieve higher returns, similar to other long-term pension plans, rather than just the conservative government bonds that it currently invests in.

But some experts have criticized the increased risks Cassidy’s proposal entails, especially given that the benefits are supposed to be guaranteed. Furthermore, any profits would be limited by the cost of borrowing funds.

During the hearing, Sen. Tim Kaine, D-Virginia, said he supported the proposal as one piece of solving the solvency crisis.

Mr Kane said the borrowing amount could be adjusted to align with other proposals to address solvency gaps. He said the benefits paid are not determined by the fund’s earnings. Messrs. Cassidy and Cain said the strategy builds on other examples, particularly the National Railroad Retirement Investment Trust, which was created in 2001 to invest railroad retirement assets.

The White House introduced another proposal in the Senate Budget Committee that would require individuals with incomes above $400,000 to make additional contributions to Social Security.

The maximum Social Security payroll tax is $184,500 for 2026 wages. Once that threshold is reached, high-income earners no longer pay into the program for that year. Starting March 9, millions of annual wage earners stopped paying into Social Security.

The White House’s bill, called the Medicare and Social Security Fair Burden Act, proposes a $400,000 Social Security threshold that would also apply to investment income, the White House said at a hearing. The plan would also close a loophole that allows some wealthy owners of pass-through businesses to avoid paying Medicare taxes.

“The only way to expand solvency without cutting benefits or borrowing, which is also very risky, is to increase revenue,” the White House said at the hearing.

The White House reintroduced the bill in 2025 with Democratic Representative Brendan Boyle of Pennsylvania. The proposal would extend the solvency of both Social Security and Medicare for at least 75 years, according to an analysis by actuaries from both governments.

Eliminating the payroll tax cap is a popular proposal among Democrats, with Sen. Elizabeth Warren (Massachusetts) and Sen. Bernie Sanders (Vermont) among others proposing to apply the Social Security payroll tax to all income over $250,000. It remains to be seen whether Republicans will agree to such tax increases.

Instead of raising Social Security payroll taxes on high-income earners, lawmakers may choose to cap the benefits they receive.

During a Senate Budget Committee hearing, Sen. Lindsey Graham (R.S.C.) said Social Security survivor benefits were an important part of families’ lives when their parents died within about 15 months of each other.

“There was a time in my life when my Social Security check was really, really important,” Graham said.

“There’s a time in my life right now where I could probably get by with less,” Graham said. “If that’s what it takes to save on Social Security, then I want you to participate.”

The Committee for a Responsible Federal Budget recently introduced a proposal that would cap Social Security benefits for high-income earners who consistently hit the tax cap. The cap is $100,000 for married couples and $50,000 for individuals.

The proposal drew criticism from groups such as AARP, who say it violates the program’s premise of providing benefits that reflect what beneficiaries earn and opens the door to further benefit cuts.

At another Senate Committee on Aging hearing on March 25, Warren brought up the idea of ​​raising the retirement age, which some Trump administration officials have also suggested.

Dan Adcock, director of government relations and policy for the National Council on Social Security and Medicare Maintenance, said at the hearing that raising the retirement age would mean losing benefits for an additional year.

“It doesn’t matter whether you apply for benefits at age 62 or 70, or how long you live. No matter how you slice it, it’s a reduction in benefits,” Mr Adcock said.

Such changes could be particularly harmful to people who need to retire early, he said.

Supporters of raising the retirement age argue that Americans generally have a long life expectancy and that such a policy could be implemented in a way that protects low-income people.

Jen Jones, vice president of financial security and livable communities for the nonprofit organization representing America’s seniors, said AARP’s members, primarily those 50 and older, consistently say they want to protect and strengthen Social Security.

To do that, Jones said Congress needs to have a serious conversation about solvency and put ideas on the table. She said the Senate hearing could consider a number of approaches.

“That’s the way the process should be,” Jones said. “It’s a public debate.”

But Social Security reform would likely include a combination of ideas, making it impossible to endorse any one approach at this stage, Jones said.

“You really need to look at and evaluate the whole package to understand what it means for millions of people,” Jones said. This includes not only current beneficiaries but also their children and grandchildren.