The Great Social Security Freakout of 2026

The Trustees of what we call “Social Security” and is technically called the “Old Age and Survivors Insurance” released their annual report stating the fund will run out of money in late 2032. They said current Social Security recipients would have to take a monthly haircut of 22% from their benefits. The reaction has been ordinary from the usual sources, but extraordinary from others, all with dangerous solutions.

Pundits and elected officials acted as if they knew Social Security. It is as if they did not know the fund had had no savings for decades. The fund now holds only IOUs from the U.S. General Fund for hundreds of billions of dollars borrowed and spent on other government programs.

Congress last revised the program in 2025. It finally cut benefits previously established. Instead of cutting benefits then, they expanded benefits for 2.8 million public employees. These employees — who largely receive non-self-funded retirement benefits from government — are now allowed to additionally receive social security for any period they may have worked in the private sector.

The law was previously revised in 1983. The most significant change was gradually raising the retirement age over a 40-year period from 65 to 67 years of age. Life expectancy in 1935 was 61 years. It was already 74.6 by the time the law was changed yet Congress did not provide adequately for the expanded life expectancy of social security recipients. Matters have gotten even worse since the last law change, with life expectancy today being two years longer at 76.5 years. It doesn’t take a mathematical genius to see the fund will run out of money at some point.

Instead of addressing the age issue, the program still allows people to start drawing benefits at 62 years old. In 2026, that is insane public policy.

Another big change came in 1983 with people receiving Social Security. Married couples had 50% of their social security benefits taxed on income over $32,000. Not exactly a high bar. In 1993, that level was increased to 85% for taxable incomes above $44,000. But instead of the proceeds of the tax going into Social Security as previously done, they were now going into the Medicare fund. These income levels were not indexed for inflation, so an immense number of people are already paying back to the government part of their Social Security benefits.

In addition, earners with higher income are charged significant reductions of the Social Security benefits, paying those to the Medicare fund.

Over the past 80 years, Congress has done little to address problems with the program. One major change was providing additional benefits to a favored group already receiving non-taxable public funded retirement benefits. They have not addressed an aging population that is both living longer and working longer. As they work longer, they are already paying back a substantial amount of their benefits in the form of income taxes.

One solution is to turn what was clearly set up as a retirement program into a welfare program. People currently working and earning at higher levels will never get back what they paid into the fund when they reach retirement age. The top level of wages which are taxed is already at $184,500 and indexed for inflation every year.

Senator Elizabeth Warren is the not-surprising source freaking out in a New York Times column. She has never met a successful person she didn’t want to tax even more. The people who earn the current maximum social security tax limit already carry 90% of income taxes. Now she wants to give them the biggest tax increase in history which she characterized as $3 trillion over the next ten years. Her partner in crime is shockingly a Republican senator from Ohio, Bernie Moreno. He bills himself as a “businessman,” but since entering the Senate he has obviously lost any sense for business.

The senators say that it starts with a “common sense solution” – eliminating the cap on income subject to tax. Their plan doesn’t start there but rather ends there as their proposal encompasses no other changes. It would only cover the fund’s existing negative cash flow for three years.

They then go for the sympathy vote, saying, “Why should a middle-class nurse pay a larger share of her paycheck than a wealthy corporate lawyer?” Why don’t they just compare Mother Teresa to Ted Bundy?

Here’s why they are wrong. That nurse is already paying far less in Social Security taxes and income taxes. The difference is that Social Security is a retirement program and always has been and should remain such. If they take off the income cap, Social Security will become another welfare program. Once they do that, it will destroy the program. Congress will use the additional funds as a piggy bank for other “preferred” programs.

The thinking is that taking off the cap will not alter people’s behavior – they will. The government will never, ever collect anywhere near that projected $3 trillion. Moreno, as a former businessman, should know that.

Don’t let Congress destroy our essential retirement program and turn it into just another welfare program. Force them to make real changes that make sense.

-Bruce Bialosky

Bruce L. Bialosky, is a former presidential appointee to the U.S Holocaust Memorial Council and the founder of the Republican Jewish Coalition of California.