By JD DuRie, in collaboration with AI Matters

Congress has rediscovered its favorite Social Security ritual: forming a commission to study the problem. There are currently at least two bills in Congress proposing exactly that. It’s a familiar move, and it’s largely theater. The math on Social Security’s shortfall isn’t a mystery waiting to be uncovered by a blue-ribbon panel — it’s published every year by the program’s own actuaries, and it points fairly clearly toward the most obvious, most popular, and most defensible first step available to lawmakers: eliminate the wage cap on Social Security taxes.

I want to walk through why, and be honest about where the case is strong and where it isn’t airtight.

The Problem, Briefly

The 2026 Social Security Trustees Report puts the program’s 75-year actuarial deficit at 4.42% of taxable payroll — the largest shortfall on record — and moves the trust fund’s projected depletion date up to the fourth quarter of 2032. If Congress does nothing, automatic benefit cuts hit everyone drawing a check at that time, not just future retirees.

That’s the part that should concentrate the mind. This isn’t an abstract fiscal exercise. It’s a countdown to a specific, mechanical cut in income for tens of millions of seniors, most of whom have no other lever to pull.

What “Scrap the Cap” Actually Means

Every worker currently pays Social Security tax on wages only up to a ceiling — $184,500 in 2026. Earn less than that, and effectively all your wage income is taxed. Earn more, and everything above the ceiling passes through untouched by the payroll tax. Only about 6% of workers earn above that line, but because their earnings run so far past it, that slice accounts for roughly 17% of all covered wages in the country.

The wage cap wasn’t designed to exempt high earners forever. When it was last recalibrated in 1983, the intent was for it to cover about 90% of aggregate national wages. Wage growth at the top has badly outpaced wage growth everywhere else since then, and the cap now covers only about 83%. That drift — quiet, uncontested, compounding for four decades — is a big part of why the program is short today. Eliminating the cap isn’t a new tax increase so much as a correction of that drift back toward the system’s original design.

What It Would Actually Buy

I ran the actual numbers rather than taking the pitch at face value, because a lot of Social Security “fixes” circulating right now don’t survive contact with arithmetic. This one holds up better than most, with some real caveats.

Eliminating the cap alone, while crediting new benefits proportionally on the newly taxed income — keeping the program’s traditional pay-in-get-credit structure intact — extends trust fund solvency from 2032 to roughly 2066. That’s a genuine 40-year deferral, closing about two-thirds of the 75-year funding gap. It is not a token gesture.

It is also not a permanent fix. Even at 2066, the underlying dynamic — an aging population and lengthening lifespans outrunning the wage-based revenue that funds the program — doesn’t reverse itself. Whoever is in Congress in the early 2060s will likely need to revisit this. Anyone who tells you a single policy lever solves Social Security “into perpetuity” either hasn’t run the numbers or is being loose with the word.

There’s also a real, and often underweighted, economic question sitting inside the fairness argument: behavioral response. Stacking an uncapped 12.4% Social Security tax on top of the uncapped 2.9% Medicare tax, federal income tax, and state income tax pushes combined marginal rates on high earners well past 50% in many states, including here in Connecticut. People with the most flexibility to change how and when they realize income — through timing, entity structure, or compensation design — are exactly the people this policy targets. SSA’s actuarial estimates run largely static, and reasonable critics argue the real revenue gain will come in somewhat below the official projection. I don’t think that risk is disqualifying, but it’s a legitimate economic consideration, not a reason to dismiss the concern out of hand.

Why a Compassionate Libertarian Should Support It Anyway

I approach policy skeptical of concentrated power, whether it collects in a boardroom or a federal agency, and I generally prefer voluntary, distributed mechanisms to top-down mandates. Social Security doesn’t fit that mold to begin with — it’s a compulsory, government-run insurance program, and I’m not going to pretend otherwise to make this piece tidier.

But given that the program exists and that abolishing it outright isn’t a serious near-term option — not for a program that keeps a meaningful share of American seniors out of poverty — the question in front of Congress isn’t whether to have Social Security. It’s how to keep the promise it already made without either raiding it into insolvency or quietly cutting checks to people who built their retirements around it. Between those constraints, restoring the wage cap to something closer to its original coverage ratio is the option that does the least violence to individual responsibility and voluntary exchange. It doesn’t expand the program’s reach, doesn’t hand new discretionary power to a federal agency, and doesn’t ask anyone to accept a benefit they didn’t already earn. It closes a gap that opened because of a design assumption from 1983 that never got updated as the wage distribution shifted underneath it.

That’s a correction, not an expansion of government power. And it protects the people — retirees living on fixed incomes with no other recourse — who are exactly the population a compassionate libertarian framework is most obligated to consider before insisting the market alone will sort it out.

The Honest Caveat

Support this because the fairness case is sound and the revenue case is real — not because it’s a permanent solution. It buys the country roughly four decades to have a more serious conversation about the program’s long-run structure, ideally without another artificial deadline forcing a last-minute deal, as happened with the Greenspan Commission in 1983. Whether Congress uses that time well is, as always, a separate question from whether the policy itself is sound.

It is.

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This piece was developed through a working dialogue between the author and Claude (Anthropic), used here as an analytical stress-test of a Bloomberg Opinion proposal by economist Kathryn Anne Edwards (“How to Fix Social Security, in Six Words,” July 22, 2026) and of the underlying Social Security Trustees Report data.