Social Security could face a major benefit cut in 2032 if Congress does not act. The Social Security trust fund is projected to run out of money in the last three months of 2032. If that happens, Social Security benefits would automatically face an across-the-board 22% cut, according to the Social Security Board of Trustees. That means millions of Americans could receive much less money each month.
The 2032 funding problem could become an important issue in this year's Senate elections. A new survey found that voters in key battleground states want candidates to address Social Security's funding problems. The survey covered voters in Georgia, Michigan, North Carolina, Ohio and Texas. These states could play an important role in deciding the balance of the US Senate. The senators elected this November would still be in office when the trust fund is projected to run out in 2032.
More voters want Social Security cuts stopped
More than 8 in 10 voters prefer candidates who have a plan to stop automatic cuts. More than 80% of voters said they would be more likely to support a candidate who has a plan to prevent Social Security benefit cuts. Only 17% preferred a candidate who promised not to make changes to Social Security. The survey was conducted by the Peterson Foundation among 2,500 registered voters nationwide from August 20 to August 27.
Voters also want lawmakers to talk more openly about the problem. Nearly 9 in 10 voters said current lawmakers should discuss Social Security's funding problems more. More than three-quarters said lawmakers who promise not to touch Social Security are making the problem worse. Voters said delaying action could make the problem harder to solve later.
{{/usCountry}}Voters also want lawmakers to talk more openly about the problem. Nearly 9 in 10 voters said current lawmakers should discuss Social Security's funding problems more. More than three-quarters said lawmakers who promise not to touch Social Security are making the problem worse. Voters said delaying action could make the problem harder to solve later.
{{/usCountry}}Support for reform rises sharply when voters learn about the possible 2032 cuts. 91% of voters said they support Social Security reforms after being told that automatic cuts could begin in 2032 if Congress does nothing. 85% said fixing Social Security is more important than ever because inflation remains elevated and is increasing the cost of living. The findings suggest voters are concerned about both the future of benefits and their current household expenses.
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Social Security cuts could affect 63 million Americans
The impact would be nationwide, not limited to battleground states. No state and no Social Security recipient would be spared if benefits are cut, according to an analysis by the Committee for a Responsible Federal Budget (CRFB). About 63 million Americans, or roughly one in five people in the country, would be affected.
This includes about 54 million retired workers and 9 million survivors and dependents. The average monthly reduction would be about $500, according to CRFB. The possible $500 monthly reduction would be a major hit for retirees. CRFB said the average monthly cut would be higher than the amount the average retired household spends on groceries each month. This could put additional pressure on households that depend heavily on Social Security for their regular income.
Battleground states face monthly benefit cuts
Georgia could see 1.7 million people affected. About 1.7 million people in Georgia would see their Social Security benefits fall. The average reduction would be around $487 per month. Michigan could see an average monthly loss of $523. Around 2 million Social Security beneficiaries in Michigan would be affected.
Their benefits would fall by an average of about $523 per month, CRFB said. North Carolina could see 2 million people affected. About 2 million Americans in North Carolina would face lower Social Security payments. The average monthly reduction would be around $501, according to CRFB.
Ohio could see 2.2 million residents affected. Around 2.2 million Ohio residents would see their Social Security benefits reduced. The average decline would be about $487 per month, CRFB said.
Texas would have the largest number of affected recipients among these five states. About 4.3 million Social Security recipients in Texas would be affected. The average monthly benefit reduction would be around $489, according to CRFB.
Voters support several ways to strengthen Social Security. The Peterson survey found bipartisan support for several proposals to improve the program's finances. 72% supported raising the payroll tax cap by an additional 1% on income above $184,500. 66% supported capping annual Social Security benefits so that no retired couple receives more than $100,000 a year. 65% supported reducing benefits received by the top 20% of earners. Another 65% supported a combination of gradual benefit changes and tax increases to preserve Social Security.
Borrowing gets the least support from voters
Borrowing more money was the least popular option. Only 29% of voters supported borrowing more money to prevent the expected 2032 benefit cuts. That was the least-supported proposal in the survey across demographic groups. At the same time, 68% of battleground voters opposed adding to the US deficit, which has reached about $40 trillion, according to the survey.
Peterson Foundation CEO Michael Peterson said voters want candidates to address the issue. “The voters who will determine the balance of the US Senate are calling on candidates to strengthen the future of Social Security,” Peterson said. He said senators elected this fall would still be in office in 2032 when the projected 22% cuts could begin. Peterson said candidates should present solutions during the campaign.
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Analysts say voters should pay attention to the Social Security debate. Mary Johnson, an independent Social Security and Medicare analyst, said voters should understand the changes Congress may consider to strengthen the program. She said the issue could be important for people voting in the midterm elections.
Social Security COLA plan could cut future benefits
One proposal getting attention is a “flat-rate” cost-of-living adjustment. The proposal would give every Social Security recipient the same dollar increase. The amount would be based on the COLA received by the lowest 20% of beneficiaries. The idea has recently received more attention as lawmakers and analysts discuss ways to change Social Security benefits.
Analysts warn a flat-rate COLA could reduce benefits for many Americans over time. Johnson said the proposal could weaken the purchasing power of many Americans, including people in the middle class. It could also affect future retirees because Social Security COLAs are used in calculating a person's initial retirement benefit. Johnson said a flat COLA could therefore lower the starting benefit for many future retirees and reduce their total Social Security income over their lifetime.
The main issue for Congress is how to prevent the automatic 22% cuts. The projected trust fund depletion does not mean Congress has only one possible solution. The survey shows voters support several approaches, including higher payroll taxes on some incomes, changes to benefits for higher earners and a combination of tax increases and benefit adjustments. At the same time, voters showed limited support for simply borrowing more money to fill the gap.
The 2032 deadline means the issue could remain important through several elections. Senators elected in 2026 would be in office when the trust fund is projected to become depleted. The president elected in 2028 would also be in office at that time. That makes Social Security's long-term funding a major policy issue for lawmakers to address before the projected 2032 shortfall.