Former Social Security Administration Commissioner Martin O’Malley argued that requiring higher-income Americans to pay more into Social Security is the solution to the program’s looming funding shortfall after a new report warned that beneficiaries could see a 22 percent cut in their monthly checks by the end of 2032.
In an interview that aired Monday on NewsNation’s “The Hill,” O’Malley said lawmakers should raise the cap on earnings subject to Social Security payroll taxes rather than pursue benefit reductions.
“It’s only 6 percent of us that experience any benefit from the cap and an even smaller percentage — three or four — who benefit from scrapping the cap on income above $250,000,” he told host Blake Burman. “Most Americans, Blake, think it is unfair that wealthy people don’t pay the same tax rate as a custodian in a school or a teacher.”
The former Biden administration official pointed to the program’s current payroll tax cap, which exempts annual earnings above $184,500 from Social Security taxes.
His comments come as lawmakers grapple with a new Social Security trustees’ report projecting that the program’s trust fund will be depleted in the fourth quarter of 2032 — one quarter earlier than projected last year. At that point, incoming payroll revenue would cover only 78 percent of scheduled retirement benefits.
The program’s insolvency reignited debate on Capitol Hill over how to shore up the program’s finances. Proposals floated by lawmakers include raising the payroll tax cap, increasing the retirement age and creating personal accounts to invest in the stock market.
Speaker Mike Johnson (R-La.) recently called on Republicans to tackle the ballooning costs of Social Security, Medicare and Medicaid, arguing the programs “have to be adjusted and fixed.”
“The reason we’re in trouble is because over 74 percent of federal spending is on autopilot — mandatory spending, that is your entitlement programs like Medicare, Medicaid and things like Social Security — they have to be adjusted and fixed,” Johnson said in a radio interview.
“We have a plan to do that next year, and it’s critical, because we’re at $40 trillion-plus in debt. At some point you get into a hole so deep you can’t climb out of it, so desperate times call for desperate measures,” he continued.
But O’Malley rejected Johnson’s characterization that Social Security contributes to the federal deficit, arguing the retirement program is largely funded through dedicated payroll taxes.
“I was just listening to Speaker Johnson falsely say that Social Security contributes to the deficit,” the former Democratic Maryland governor said. “In point of fact, Social Security doesn’t contribute to the deficit. It is a pay-as-you-go program, which means, for the most part, the dollars paid in any given year are the dollars that go out.”
The Hill
Ex-Social Security administrator calls for raising cap
Former Social Security Administration Commissioner Martin O’Malley argued that requiring higher-income Americans to pay more into Social Security is the solution to the program’s looming funding sh…
lol, NEXT YEAR ?
now they're looking into this after most of the greedy boomers have retired and are draining the coffers?
ffs, the R's probably won't be running the Hill NEXT YEAR and the stupid Democrats certainly aren't going to do a f'ng thing about it... Hilarious
oh well, wife's home and we're off to the cottage
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Crnr2Crnr ·
