Social Security is heading toward a critical deadline: without action, the Trust Funds are projected to run dry by 2032, triggering an automatic 22% benefit cut that could cost a typical retired couple roughly $18,500 a year. In this conversation, Brett Loper, Executive Vice President for Policy at the Peter G. Peterson Foundation, breaks down what’s driving the shortfall—an aging population and a worker-to-retiree ratio falling from 4-to-1 to just over 2-to-1—and why the program’s original design is under strain. Drawing on the successful 1983 Greenspan Commission fix, Loper explains how the challenge can be solved with practical, bipartisan solutions.
Jeffrey Snyder, Broadcast Retirement Network
Well, Brett, it’s great to see you. Thanks for joining us on the program this morning.
Brett Loper, Peter G. Peterson Foundation
It’s great to be here. Thank you.
Jeffrey Snyder, Broadcast Retirement Network
Well, we’re going to talk about Social Security and Social Security reform. This has been talked about for quite some time. But Brett, this is not the first time in United States history that we’ve actually had an issue of insolvency, is it?
Brett Loper, Peter G. Peterson Foundation
You’re correct. It is not. The program was created almost 100 years ago, 1935 to be precise.
And we have had points in time where some adjustments have had to be made in the program. The most notable, perhaps, of those was the last time we did this, the last significant reforms to the program, which were in 1983, when a similar situation was about to occur with the Social Security Trust Funds, which is kind of their accounting system. We’re about to go insolvent, and Social Security beneficiaries were going to face a cut in their benefits.
So we’re here again, on the precipice, and ironically, almost 50 years later. So hopefully, we can do again something similar to what we did almost 50 years ago.
Jeffrey Snyder, Broadcast Retirement Network
1983, I was 11 years old, and the Orioles have won the World Series that year. So that obviously was a long time ago. So let’s talk about this, because this was Alan Greenspan, who was the chairman of the Federal Reserve at one point.
I think he just recently passed on. But there was a commission, and so they kind of have a track record of dealing with this in the past. Is that correct?
Brett Loper, Peter G. Peterson Foundation
It is correct. So in the early 80s, after he was elected to his first term, President Reagan, knowing that this issue was going to be one that he faced in his first term, appointed Alan Greenspan to chair a commission. The commission was created via executive order of the president, but he took recommendations from the leaders in Congress, and they had a mix of public sector and private sector experts.
And they spent more than a year kind of tussling about and hashing out what types of changes, both to benefits and to the payroll tax system, what types of modifications would be necessary in order to get the program back on sound footing.
Jeffrey Snyder, Broadcast Retirement Network
So we have a path forward. Is there a chance that we could apply this methodology, this I’m going to call it a process, because I come from the world of the fiduciary. There’s a process.
Can we apply this process now in 2026?
Brett Loper, Peter G. Peterson Foundation
Absolutely, we certainly could. There are bills in Congress, one in the House, bipartisan in both cases, one in the House, sponsored by representatives Tom Cole of Oklahoma and Tom Swasey of New York, that would do essentially what Reagan did. It would create a bipartisan commission.
It would provide for some expedited procedures for Congress to consider it once the commission, the panel develops that solution. And then there is a slightly different version of this, gets at the same core theory of solving it in the Senate, sponsored by Senators Bill Cassidy of Louisiana and Dick Durbin of Illinois. Instead of having independent commissioners, they actually rest the development of the recommendation with what’s known as the Social Security Advisory Board, which is a small, nonpartisan, almost academic-like entity that advises the federal government and consists of a handful of commissioners who are in their own right experts in the program, in retirement systems, etc.
But they too would provide that sort of expedited consideration of the recommendation in order to take some of the politics out of the equation. That’s really one of the challenging things is Congress is intended to be a political institution. Both parties have used Social Security to some degree as an electoral weapon or a political weapon through the years.
And it’s going to be hard for them to move off of certain positions they’ve taken or claims that they’ve made. And so resting this recommendation authority with outside experts should help prove to the public that there’s good sound give-and-take in developing the recommendations. And hopefully they’ve got greater trust in what has been developed by those experts.
And at the same time, Congress is not removing itself. At the end of the day, both chambers still have to pass the same bill. And that bill has to be sent to the president for his or her signature.
And hopefully that process can play out with one of these two bills putting it in motion.
Jeffrey Snyder, Broadcast Retirement Network
Brett, there’s a real sense of urgency, at least when you read press reports. I see television ads all the time, social media ads that this is a big deal. Noam, I mean, given that Senators Cassidy, Congressman Suozzi, Congressman Cole, they’ve come together.
Even if the White House, the executive branch didn’t do an executive order, because I think that adds to your point, adds a little bit of the politics and maybe one party wouldn’t seem to go on the other side of almost every issue. I mean, there’s just a sense of urgency. I mean, it has to be done.
2032 is right around the corner. I mean, it’s less than six years away.
Brett Loper, Peter G. Peterson Foundation
It is right around the corner. And I think notably, if we’re just weaving in a little bit of electoral politics here, Senators who were elected in 2026, right, we’ve got an election right around the corner, just a couple of months away. A third of the Senate is obviously up for election every two years.
So you’re talking 33, 34 new senators coming in or reelected senators coming in who serve a six-year term. And that six-year term is going to conclude after this crisis hits. And so it’s really incumbent upon them, and we’d argue the voters, and voters are beginning to pay greater and greater attention to this, need to be aware that these candidates who are running to fill these terms in November really should have a plan of action in order to address it and not just make sweeping claims that, you know, I’m not going to change anything, everything’s going to be protected. Anybody who says they want to make any modifications to Social Security is out to get you, you know, things like that. That’s not going to work.
And voters, we have good polling data that indicates that voters today don’t have widespread awareness, but they have growing awareness. And of those who are aware that this problem is coming, they demand overwhelmingly, overwhelmingly that their elected officials work to address it.
Jeffrey Snyder, Broadcast Retirement Network
I mean, isn’t it more of an issue than it was in 1980? Because there are more of us, and I’m in that category, I’m a Gen Xer. In 10 years, 11 years, I’m going to be 65 years old.
Hard to believe, really is. When I look in the mirror, it seems to be on course. But there are more of us turning age 65.
This is an aging America. This is even more of an issue because so many Americans rely on Social Security, if not all, but at least a big part of their retirement. So isn’t it more of an issue now just because of the demographic shift in the United States?
Brett Loper, Peter G. Peterson Foundation
Yeah, I think there’s some truth. I think there’s some truth to that. So if you think about the program when it was created under Franklin Delano Roosevelt, it was really designed for a safety net almost for a very small subset of the population.
I mean, the average age of those on the program was like 68, something like that. I checked my math on that. But people would have it for, live on it for three, four, five years, something like that.
Due to lots of good developments in society, lots of great advances for mankind, we’re living longer, we’re living healthier for longer periods of time. And so we have this extended amount of time that people are expecting and needing those benefits. There are other retirement programs that obviously many Americans have access to through the course of their work, and those are critical as well.
But this is one that you can see the demographic change in the country, which is good, longer, healthier lives. Who’s going to complain about that? But the challenge that that creates is you’re going to have to make some modest changes to the program over time in order to make sure that that demographic balance works out.
If we had at one point four workers for every retiree, and we’re down in coming years to just over two workers per retiree, and it’s those workers who are paying the taxes that are creating the benefits for the retirees, you’re going to have to make some adjustments. It’s relatively obvious. And again, I think that’s why so many voters, once they’re aware of this problem, are really encouraging their elected officials to address it.
Jeffrey Snyder, Broadcast Retirement Network
When you think about the changes, and this is where your expertise, I think, really comes in, do these have to be sweeping changes that are implemented immediately? Meaning, hey, you vote on it in 2026. I mean, this is a hypothetical.
And then 2027, the corrections are made. Or is it more of a phased approach? Because I don’t know about you, but whenever someone changes something immediately, I have to adjust my balance, my budget, all the other parts of my life to accommodate a change.
So would any change be more phased in over a period of time than just, hey, we’re going to pull the rug out from other people’s feet and do it tomorrow?
Brett Loper, Peter G. Peterson Foundation
Yeah, it’s a great question. I’m going to answer it in two parts. First off, we talked about this problem, this cliff coming only six years from now.
And just to put into magnitude what that cliff is going to be, that’s a 22% across-the-board cut for every beneficiary. If you think about the typical or average retired couple, that’s $18,500 of reduction in benefits annually that’s going to hit them in 2032. So the consequences of inaction are significant.
Related to that is the fact that the longer we wait, the harder it is to make those adjustments. I mean, this is not that hard to consider. You can think about various ways in your own life that you might decide you’re going to put a little bit of money away per month so that in a year you can buy a new television.
Well, if you don’t put any money away and then you try to take it all out of your 12th month’s salary, you may have nothing left. So it’s the same type of concept here. The sooner we can act, the more moderating we can make the changes.
Now, having said that, we are talking about these long-term changes in the makeup of the overall population and the percentage of retirees versus workers and our life longevity and things like that. And so you can make changes that slowly impact retirees. You can largely, especially if we were to act now, you can largely or maybe even completely hold harmless any retiree, even the wealthiest of retirees, the top 1% and 2% who still receive Social Security benefits, by the way.
You can make these changes more slowly over time. They won’t be as dramatic in terms of the amount of revenue that has to be raised to stabilize the program. They won’t be as impactful, particularly for those who are most dependent upon the program, if some modest changes are made to benefits.
Or if we were to do something like phase in a change in the eligibility age. So today, it’s 67. You can delay that if you choose, all the way to age 70.
But if we were to make some very modest changes to that, say for workers who are today 40 or 45 years old or even younger, they have ample time, decades really, to prepare for that additional work. And frankly, by then, they’re likely to be living much longer as it is and hopefully be much healthier as they’re entering retirement than even today’s retirees are. So again, the quicker we can act, the better off we’re going to be, the more modest and slow changing those tweaks to the system would be, and a much smoother process of adjusting to these reforms we would have.
Jeffrey Snyder, Broadcast Retirement Network
Last question for you, probably the biggest question. Let’s talk about a call to action. You mentioned the polling indicates that people are kind of awakening.
I’m talking about real Americans awakening to the fact that something needs to be done. What should people do if you’re a retiree, or at some point, you’re going to be a retiree? Do you call your congressperson, your senator?
And also for someone like yourself, who is heavily involved with the staffers and people like that. I would imagine you’re having regular conversations with these folks and kind of reminding them, hey, what about this? Or how about this?
Or etc. I don’t know exactly how it works. But what’s the call to action here?
I mean, what can we do to kind of move the needle?
Brett Loper, Peter G. Peterson Foundation
Yeah, I would say D all of the above. So the reality is, you’d be surprised if the 535 members of Congress, I bet there’s still, you know, a handful who are unaware that this problem is out there. I suspect there are more than a handful who don’t don’t realize it’s a 22% across the board cut.
I suspect there are a few that don’t know it’s coming by 2032. And so start with that cohort, making sure that they’re educated, which is part of what we do on a daily basis at the Peterson Foundation. But to your point, if you’re demanding of your senate candidates in 2026, that they have a plan to address this, that they answer questions when asked in debates or in town hall meetings or other events as they’re doing, you know, running up to the election.
And they’re forced to say, yeah, I’m going to work on this. I recognize there’s a problem. I understand that it’s going to take, you know, consensus among both parties.
This is not something that’s going to be solved just by Republicans or just by Democrats. So say that up front and begin to give themselves some wiggle room to develop, you know, again, an appropriate consensus-based plan that does this in a modest, you know, transitional way. That’s the type of thing that those voters ought to be asking of their elected officials today or their candidates for elected office today.
And of those who were, you know, who’ve been in office for many years and are anticipated to continue to serve in the Congress, doing the same thing, sending, dropping them an email, going on their website and doing the search for, you know, posting a comment, picking up the phone and call in their district office or their capital office and just saying, hey, I just wanted to register my views that this is an issue that I really hope you’ll focus on.
And I hope you’ll take the politics out of, you know, all of those tactics would help. I think the last thing I would point out, and I, you know, look, I really appreciate the opportunity to be on your program today. The more you can talk to your, you know, your friends, your neighbors, your parents, your family members, so that they’re aware, you know, I think that has the, is necessary in order to really spread the word that this is, this is an issue that we’re going to have to deal with as a society.
And all of that hopefully then, you know, results in action from our officials in Congress.
Jeffrey Snyder, Broadcast Retirement Network
Yeah, well, they should certainly read your blog post. And hey, if they get around to it, they should check out the show too. There’s no reason why people can’t.
I mean, it’s just about informing people and about education. I think the more people are educated, the better are they are going to be as citizens and the better off our representatives will be to take their responsibilities to heart. Brett, we’re going to have to leave it there.
Great to talk to you as always. Great, as I said, great blog post. And we look forward to having you back.
Hopefully, when we bring you back, there’ll be some updates and we’ll bring you back very soon. Thanks for joining us this morning.
Brett Loper, Peter G. Peterson Foundation
Cheers to that. Thank you.
