Ex-Social Security Chief Calls for Raising Payroll Tax Cap as One Option to Address Shortfall

Former Social Security Administration Commissioner Martin O’Malley said lawmakers should raise the cap on earnings subject to payroll taxes to address the program’s funding shortfall. ” O’Malley said the current cap, which exempts annual earnings above $184,500 from Social Security taxes, benefits only 6 percent of Americans.

An even smaller share—three or four percent—would gain from removing the cap on income above $250,000, he added.

“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,” O’Malley told host Blake Burman. A new Social Security trustees’ report projects 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 report said.

A separate warning indicated beneficiaries could face a 22 percent cut in monthly checks by the end of 2032. O’Malley’s remarks follow the trustees’ report and come as lawmakers consider options that include raising the payroll tax cap, increasing the retirement age, and creating personal investment accounts.

President Trump’s approval rating ticked up slightly in recent days, according to a new Reuters/Ipsos poll.

M. EDT. OpenAI spending reached $34 billion last year ahead of a planned initial public offering, according to the Financial Times.