O’Malley Urges Raising $184,500 Payroll Tax Cap to Avert 22% Social Security Cuts
Updated
Updated · USA TODAY · Jun 16
O’Malley Urges Raising $184,500 Payroll Tax Cap to Avert 22% Social Security Cuts
2 articles · Updated · USA TODAY · Jun 16
Summary
Martin O’Malley said lawmakers should raise the earnings cap subject to Social Security tax, now $184,500 in 2026, instead of cutting benefits.
The push follows trustees’ warning that the retirement trust fund will be depleted in the last three months of 2032, triggering an automatic 22% across-the-board benefit cut if Congress does nothing.
O’Malley argued only about 6% of Americans benefit from the current cap, with income above the threshold exempt from the 6.2% employee payroll tax.
Social Security has spent more than it collects from payroll taxes for 16 straight years, and budget analysts estimate insolvency would reduce average benefits by about $500 a month.
Pressure on Congress is rising ahead of the 2026 elections: a Peterson Foundation poll found 96% of voters want candidates to spell out plans to prevent automatic cuts.
With Social Security's 2032 deadline approaching, could capping benefits for the wealthy prevent a 22% cut for everyone?
Your Social Security faces a 22% cut. Is raising the tax cap on high earners the fairest solution?
As the retirement age may rise, will working until 70 become the new normal to secure full benefits?
The Urgent Need to Raise Social Security’s Payroll Tax Cap to Prevent a 20% Benefit Cut by 2035
Overview
As of June 2026, Social Security is at a critical turning point, with its financial health worsening and a growing annual cash shortfall. If Congress does not act soon, projections show that benefits could be cut by 20% starting in 2035. The Old-Age and Survivors Insurance trust fund faces a large long-term imbalance, making the situation urgent. This looming crisis has led organizations like AARP to call on lawmakers to address the funding gap and prevent significant reductions in benefits that millions of Americans rely on.