Here's How to Protect and Expand Social Security, According to One Hawaii Senator

It's no secret that Social Security, as we know it, is in a pinch. According to the Committee for a Responsible Federal Budget (CRFB), the Social Security and Medicare trust funds are six years away from insolvency.

The combination of more retirees, fewer people in the workforce, and the impact of President Trump's big, beautiful bill (OBBBA) leads the CRFB to estimate a 24% Social Security cut in late 2032 if nothing is done. In addition, retirees could face an 11% cut in Medicare Hospital Insurance payments.

This isn't the first time the trust funds have been in trouble. In 1982, the fund that helped cover the cost of monthly Social Security benefits faced a significant shortfall and was forced to borrow from other funds to pay benefits on time. Congress was able to work together long enough to raise taxes on some, adjust benefits, and prevent insolvency.

With a similar problem facing the trusts 44 years later, Hawaii's Senator Brian Schatz and Representative Mazie Hirono (along with Rep. Jill Tokuda) believe they have a simple solution. Here's what their proposal, called the SAFE Social Security Act, would do.

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Lift the payroll tax

To ensure payroll taxes apply fairly across the board and that the rich pay their share, the proposal includes a plan to phase out the payroll tax cap so that no one can stop paying into Social Security once their income hits $184,500.

Adjust benefit calculations

The trio suggests adjusting the way current benefits are calculated, a move that would increase the average monthly benefit by more than $150.

Update how cost-of-living adjustments are determined

As of today, cost-of-living adjustments (COLAs) are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year to the third quarter of the current year. In theory, using inflation tied to CPI-W is supposed to help retirees keep pace with the rising cost of living.

For years, however, senior citizen advocacy groups have insisted that the wrong index is being used because working adults and retired adults spend money differently. For example, an older retiree is likely to spend more on medical care than a younger person still in the workforce.

The Hawaii legislator's plan would address the issue by basing the COLA on an index that tracks inflation related to seniors' spending. Specifically, they're talking about the Consumer Price Index for the Elderly (CPI-E).

Sen. Schatz believes that the SAFE Social Security Act will expand Social Security and put more money in the hands of those who rely on it. It will also strengthen the program for the next generation of retirees, ensuring today's workforce has something to look forward to.

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