A Rare Bipartisan Moment on Social Security — And Why It Falls Short

An old Washington joke goes like this: America has an evil party and a stupid party and when something’s both evil and stupid, we call it bipartisan.

It was therefore surprising to see Ohio Republican Senator Bernie Moreno co-write with Massachusetts Democratic Sen. Elizabeth Warren an opinion piece promoting what might become the largest tax increase in more than 40 years. Their stated goal is to preserve Social Security. 

If any policy truly requires a bipartisan solution, it’s this one. One need only look at the wreckage Democrats wreaked on our healthcare system with Obamacare to see the one-party alternative.

Social Security’s financial and structural deficiencies are so severe that a significant tax increase is necessary to protect current and soon to be retirees. The “Old Age and Survivors Insurance Trust Fund” is projected to become insolvent in six years. At that time, benefits will need to be substantially reduced and/or even larger tax increases will be necessary. 

That’s unacceptable. Those who’ve worked all their lives and paid into the program with an implicit promise to be able to retire with dignity deserve those benefits. 

The Moreno-Warren proposal would remove the “cap” on wages subject to the 12.4% Social Security taxes (6.2% each for employee and employer). Under current law, income over $184,500 isn’t subject to Social Security taxes because retirement benefits are also capped accordingly. This proposal would remove the income cap while retaining the benefit cap. It’s a lose/lose proposition for the up to 20 percent of Americans who’d have to pay that tax at some point in their working lives.

Moreno and Warren deserve credit for at least starting the conversation and doing so together. But their proposal still leaves intact Social Security’s fatally flawed underlying structure, and young people will still bear the cost burden, while being unlikely to receive any benefit from it.

While Moreno subsequently made clear that numerous other market-oriented changes must be part of any bill he’d support, I doubt Warren or other members of her party would concur.

Though not the right solution, at least the Moreno-Warren plan isn’t as truly awful as that proposed by Maryland Democratic Senator Chris Van Hollen. His monstrosity would convert Social Security into a welfare program by funding it from the Estate Tax.

Those who favor higher taxes on what they derisively call “the rich” no doubt love this plan. But their covetous appetite for ever more taxes on those other than themselves will never be satisfied.

Social Security is a take-our-money-now-and-promise-us-returns-later enterprise. So too was the original Ponzi scheme. Critics of that description insist it’s wrong because there’s no fraud or deception involved, and the program is legal. How about this instead? Five hundred years before Ponzi’s scheme, the phrase “robbing Peter to pay Paul” was first recorded in literature.

Legal or not, and regardless of your preferred description, it’s still not the right solution in 2026 and beyond, especially for younger workers.

That’s because benefits for current retirees are paid by current workers. It worked during the post-war boom of the 1960s when there were five workers paying in for each retiree getting benefits. Today, that ratio is cut in half, with 2.6 workers for each retiree. Demographic shifts project it to drop another 20 percent in the decades ahead.

Based on the 15.37% cost rate of Social Security from the trustee reports (growing to more than 20 percent in 2085), the average worker today now has to pay nearly $10,000 in payroll taxes each year to support each current retiree. That’s money they don’t get to save and invest for their own retirement, which they’ll need as demographics and inflation continue to take their toll.

Starting the conversation is fine, as is making clear that a tax increase of some sort is unavoidable. Benefit cuts for wealthy retirees who don’t rely on Social Security should also be part of any major reform. I’m one of them. It’ll be a tough pill to swallow but we all pay taxes we don’t ever expect to get back. 

Ultimately, however, those are short term fixes and passing them into law without incorporating a market-oriented solution for younger workers all but guarantees the latter will never happen. 

Social Security is the most sacred cow on the progressive entitlement farm. It’s served three generations well. But like all livestock, it’s time has come to go to market.

The $1000 “Trump accounts” included in the “One Big Beautiful Bill” offer a small change in the market direction. But the absurdity of those titles notwithstanding, adding another layer of complexity to the savings puzzle isn’t really better than far more efficient and effective changes that could be made to the tax code to encourage and reward savings overall. 

Moreno’s op ed co-author and members of her party like Van Hollen simply don’t trust average Americans to take responsibility for themselves. They’d rather redistribute someone else’s wealth than help more people build their own. And there’s no security — social or otherwise — in that at all.