Kathmandu— President Franklin D. Roosevelt signed the Social Security Act into law on August 14, 1935, establishing a foundational insurance program for American workers and retirees. Despite ongoing concerns about its long-term viability—dating back to before the first payout in 1940—experts argue that Social Security can be secured without raising the retirement age, increasing taxes for most contributors, or cutting future benefits. The program currently operates on a pay-as-you-go basis, funded by current workers supporting retirees, but faces challenges due to declining birth rates and stagnant wage growth.

Addressing the 2032 Shortfall

Social Security is projected to face a shortfall in 2032, potentially leading to a reduction in benefits to 79 percent of current levels. However, analysts suggest that raising the cap on earnings subject to Social Security tax could provide significant solvency and time for further policy adjustments. Currently set at $184,500 for 2026, this cap exempts high earners from contributing to the program beyond that threshold.

Public Support for Raising the Cap

Recent data indicates broad public support for raising or eliminating the Social Security payroll cap. A report by the Center for Economic and Policy Research (CEPR) found that 68 percent of Americans favor scrapping the cap, including majorities across party lines—73 percent of Democrats, 63 percent of Independents, and 65 percent of Republicans.

The Impact of Wage Stagnation

The current challenges facing Social Security are not solely demographic. The program was reformed in 1982 to account for the anticipated retirement of baby boomers, anticipating that wage growth would continue to fund benefits. However, median wage growth has remained flat or tepid over the past five decades, while income inequality has increased, exacerbating the shortfall and shifting more earnings above the taxable cap.

Immigration as an Economic Booster

Increasing the labor force through immigration is also proposed as a solution to strengthen both Social Security and the broader US economy. Immigrants contribute to the system through payroll taxes, and undocumented immigrants do not receive benefits. Advocates argue that fair immigration policies—including pathways to citizenship—would bolster economic growth and provide additional support for Social Security.

A Call for Advocacy

The author urges Americans to resist narratives suggesting they won’t receive their Social Security benefits in retirement, encouraging them to advocate for the program's preservation. They propose a 'New New Deal,' expanding upon the original New Deal policies to build a stronger social safety net.

While further adjustments may be needed in the future, experts maintain that the United States has the resources to sustain and improve Social Security, ensuring its continued support for retirees.

(With inputs from CounterPunch)

Originally published on abcnews.com.np.