Social Security’s combined trust funds are on pace to run short in 2034, at which point the program would have to cut benefits by roughly 17 percent for everyone drawing a check, not just new retirees, unless Congress changes the law before then. One proposal now sitting in a Senate committee would close most of that gap not by trimming benefits, but by taxing a slice of income that currently escapes the Social Security payroll tax entirely: wages above $250,000 a year.
What the Social Security Expansion Act would do
The bill, formally the Social Security Expansion Act and numbered S. 770 in the Senate, was introduced Feb. 27, 2025, by Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.), with a companion measure in the House led by Rep. Jan Schakowsky (D-Ill.). It would extend the Social Security payroll tax to wages above $250,000 a year, a threshold well above the tax’s current annual cap of $176,100 in 2025, which adjusts upward most years and shields all earnings above it from Social Security taxation. Under existing law, a worker earning $1 million a year and one earning exactly the cap amount pay the identical dollar amount into Social Security, because nothing above the cap is taxed for the program. The bill’s sponsors say taxing income above $250,000, while leaving earnings between the current cap and that threshold untouched, would let the program raise most beneficiaries’ checks by $2,400 a year while keeping Social Security fully funded for the next 75 years, according to a Social Security Administration analysis the sponsors commissioned in 2023. The sponsors also say the change would not raise Social Security taxes at all on the more than 91 percent of American households earning $250,000 or less. Beyond the payroll tax change, the bill also proposes extending Social Security’s minimum benefit for long-term low-wage workers, restoring benefits for full-time students up to age 22 whose parent is disabled or deceased, and changing how annual cost-of-living adjustments are calculated so they track a price index weighted toward the goods and services older Americans actually buy.
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Where the bill sits in the legislative process
As of this month, the Social Security Expansion Act has not been scheduled for a vote in the Senate Finance Committee, where it was referred on introduction, and it has not been taken up by the full Senate. Independent legislative trackers rate its odds of passage as low in the current Congress, since a Republican-controlled Senate and House have shown no sign of moving a payroll-tax-above-$250,000 bill toward a committee markup or a floor vote. That does not make the bill’s substance irrelevant — a version of this proposal resurfaces in nearly every Congress as one of the standard options for closing Social Security’s funding gap — but it does mean nothing in the bill is current law. No one’s payroll withholding changes because of it today, and no benefit has been increased by it.
What happens if Congress does nothing instead
The pressure behind bills like this one comes from the program’s own actuaries, not from politics alone. Social Security’s trustees reported this year that the combined Old-Age, Survivors and Disability Insurance trust funds are projected to be depleted in 2034, which would trigger an automatic, across-the-board benefit cut of about 17 percent for every beneficiary then receiving a check. That projection is essentially unchanged from the prior year’s report, and it is the backdrop against which every current Social Security financing proposal in Congress, this one included, is being weighed. A bill that raises revenue by taxing wages above $250,000 and a scenario in which the 2034 shortfall simply arrives on schedule represent two very different outcomes for the same benefit check, which is part of why the payroll-tax-cap debate keeps returning to Capitol Hill in one form or another almost every session. For a current beneficiary trying to plan a household budget years in advance, the honest answer today is that neither outcome is settled — the tax increase in this bill is not law, and the benefit cut projected for 2034 is not inevitable, since Congress has repeatedly acted at the last minute on Social Security financing in the past.
A solvency fix still on paper
A payroll-tax change sitting in a Senate committee does nothing for a check due next month. What actually moves the needle for a retiree’s income right now is a set of benefit programs that already exist, carry real deadlines, and go unclaimed by people who qualify for them simply because no one ever sent them the paperwork.
The Benefits Checklist is a 69-page guide covering 11 benefit programs and the 2026 income limits that determine who currently qualifies, plus a 50-state phone directory for filing questions.
This article was researched and drafted with the assistance of AI and reviewed by an editor.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
