For decades, Washington has repeated the same fight to control the growing national debt: Democrats cite the need for more taxes. The Republicans refuse. And anyone who suggests cutting the main source of spending (federal retirement benefits) is attacked. But a coming crisis at Social Security appears to be pushing at least a few Republicans to abandon the GOP’s long-standing commitment to never raise taxes. Sign up for The Post Most newsletter to get the most important and interesting stories from the Washington Post. more in the program. Now the idea is emerging as an acceptable solution among other Republican lawmakers, including Rep. Tom Cole (Oklahoma), the influential chairman of the House Appropriations Committee. “We have too many people saying, ‘Well, we have to stay within the current income level or stay at the current tax rate,'” Cole said in an interview. “I’m willing to look at the tax rate. I’m willing to increase the amount of revenue through taxes.” The GOP’s rare concessions on taxes come as lawmakers begin to confront a Social Security shortfall so large and so looming that the party’s traditional demand to cut benefits likely won’t be enough. In just six years, millions of Social Security recipients will absorb a 22 percent cut in benefits unless lawmakers provide an immediate injection of nearly $500 billion. “Twenty or thirty years ago,” when the deficit was far in the future, “you could find a serious solution” that would solve the problem entirely by cutting future benefits, said Charles Blahous, senior research strategist at George Mason University’s Mercatus Center, who served from 2010 to 2015 as director of Social Security’s Republican public administrator. Now that the problem is so big and urgent, Blahous said, “I don’t think you can look at it seriously and not do all of the above.” Grover Norquist, founder of Americans for Tax Reform and a longtime advocate of Republican anti-tax orthodoxy, dismissed the rift in party discipline, arguing that Republicans should stick to demanding spending cuts. Otherwise, he said, they risk angering voters already angry about the high cost of living. “When Republicans say no to tax increases, they win. When they say yes to tax increases, they lose,” Norquist said. “They get no spending cuts at all. And they will be smeared in the next election.” But Cole, at least, said he believes the political blowback from Social Security benefit cuts would be far worse than a comprehensive solution that includes raising taxes. “I love Grover. But… you have to deal with Social Security,” Cole said. “And believe me, you’ll have a much bigger problem if it goes bankrupt than if you keep it intact, because people will feel cheated.” Created during the Great Depression, Social Security provides monthly cash benefits to more than 70 million Americans. It is the largest program in the $7.4 trillion federal budget and will pay out $1.7 trillion this year, according to the nonpartisan Congressional Budget Office. (Medicare is close behind at $1.3 trillion.) The program is funded by a payroll tax on wages up to a “cap” of $184,500 a year, with workers and employers each paying 6.2 percent. Workers who contribute to the system can receive monthly checks starting at age 62, although the full retirement age is 67. For years, annual tax collections exceeded the cost of benefits, allowing the program to accumulate a surplus known as the Social Security trust fund. However, as the baby boom generation retired, the math changed: Social Security now pays out far more than it collects and is depleting the trust fund to make up the difference. The trust fund is projected to be depleted in 2032. At that point, Social Security would have to rely solely on incoming tax revenues, meaning monthly checks would be reduced by $440 on average unless Congress acts, according to the Bipartisan Policy Center, a Washington think tank. Closing the deficit would require $459 billion in cuts or new revenue in 2033 alone, according to the BPC, and the sum would increase each year. That relentless math persuaded Moreno, a former car dealership owner who came to office with the backing of President Donald Trump in 2024, to break ranks with his party on tax increases. In his proposal with Warren, Moreno calls for eliminating the payroll tax cap so that highly paid workers pay the tax on their entire income. “Why should a middle-class nurse pay a larger portion of her salary than a rich corporate lawyer?” Moreno and Warren wrote in an op-ed for the New York Times, noting that a recent poll found that 62 percent of Republicans support lifting the cap. “This is doubly unfair in an economy where the wages of top earners have, over time, far exceeded those of the average worker.” Moreno declined an interview request. His spokesperson Reagan McCarthy said in an email: “Senator Moreno promised Ohioans that he would fight for them in DC and make sure they got the benefits they were promised and that is exactly why he is leading this effort.” Removing the cap without increasing benefits for high-income workers would close more than half of the program’s deficit, according to the Committee for a Responsible Federal Budget, a nonpartisan group focused on deficit reduction. Blahous and others have warned against that approach, saying it would sever the connection between contributions and benefits that makes Social Security different from and more popular than other social welfare programs. Stopping the payroll tax cap alone would raise the top marginal federal tax rate to more than 50 percent, according to the Manhattan Institute, a conservative think tank. Some Democrats would go further. Senator Sheldon Whitehouse (D-Rhode Island) advocates not only lifting the payroll cap, but also taxing the investment income of wealthy households and closing a loophole that allows business owners to reduce their personal tax bills. That proposal, which would fall entirely on the backs of the wealthy, would raise enough cash to fully fund Social Security for at least 75 years, according to a 2023 estimate from the program’s chief actuary. The historical link between contributions and benefits makes the change to Social Security politically dangerous. That’s why many in Congress want negotiations to be outsourced to a bipartisan commission or advisory council. Cole has submitted one of several proposals to form such a panel. He argues that more tax revenue, including raising the payroll tax cap, “should certainly be on the table” along with adjustments that would reduce future spending, such as raising the retirement age. A third Republican lawmaker, Rep. Lloyd K. Smucker of Pennsylvania, has also said he sees more tax revenue as part of a solution to Social Security. “You’re probably going to have to do something on payroll, half of the money that goes into the system,” Smucker told Roll Call last week. Smucker said lawmakers should also consider means testing, so that benefits are reduced for the wealthy while low-income retirees are protected. Smucker’s office did not respond to requests for comment. Although raising taxes is unpopular among Republicans, it has long been part of bipartisan plans to solve the Social Security puzzle. In 1983, President Ronald Reagan, a Republican, and House Speaker Tip O’Neill, a Democrat, saved the program from its latest bout of insolvency, agreeing to a combination of solutions that included raising payroll taxes and gradually raising the retirement age. In 2005, Sen. Lindsey Graham (R-SC) advocated raising the salary cap and cutting benefits. Weeks later, President George W. Bush said he was open to a “variety of options,” although Congress scrapped his plan to reduce future benefits for all but low-income retirees and divert some tax dollars into new private retirement accounts. And in 2010, several Republicans on a commission formed by President Barack Obama voted in favor of a debt reduction plan that included raising the salary cap, raising the retirement age to 69 and cutting benefits for wealthy retirees. The plan offered by the so-called Bowles-Simpson commission never received a vote in Congress. Mike Crapo (R-Idaho) was among those voting in favor of the commission. Crapo now serves as chairman of the powerful Senate Finance Committee, which has jurisdiction over both taxes and Social Security. At a committee hearing last month, Crapo said the Bowles-Simpson plan “has informed subsequent discussions about the solvency of Social Security.” His office did not respond to questions about its current position on the tax increases. Another hallmark of Social Security reform has been the deep involvement of the White House. Cole said he has urged Trump to take on the hard work of fixing the program, calling it a possible “crowning achievement.” Since Trump will not run for office again, he could “do it without any political risk,” Cole said, adding, “I think he’ll get enormous political credit for it.” But while Trump has warned Republicans not to cut “a single penny from Medicare or Social Security,” he has not said how he would raise the huge sums needed to shore up the programs’ deteriorating finances. payments” under Trump’s leadership.- – -Charts:The Social Security crisis is comingSocial Security costs will continue to exceed your incomeRelated content
