In 2025, Social Security marked a significant milestone: its 90th anniversary coincided with the average monthly benefit for retired workers exceeding $2,000 for the first time. Moreover, the 2.8% cost-of-living adjustment (COLA) applied to more than 70 million traditional beneficiaries in 2026 represents the fifth consecutive year where benefits have increased by at least 2.5%, a trend not seen in almost 30 years.
However, even amid these noteworthy achievements, the financial foundation underpinning the program appears fragile. While various factors contribute to Social Security's uncertain fiscal future, political scrutiny often centers on the actions of Congress as a primary source of the challenges.
Analyzing the Projected Funding Gap
Each year, the Social Security Board of Trustees releases a comprehensive report detailing the program's financial status. This report offers transparency on revenue sources and expenditures, allowing the public to understand Social Security's financial operations in depth.
Crucially, the report presents projections regarding the solvency of Social Security's trust funds over the coming decades. According to the 2025 Trustees Report, the program faces a substantial funding shortfall estimated at $25.1 trillion over the 75-year horizon through 2099. This long-term deficit underscores the pressing nature of the program's financial challenges.
More immediately concerning are the short-term projections for the Old-Age and Survivors Insurance (OASI) trust fund. This fund administers monthly benefits to retired workers and survivors of deceased workers. The report indicates the OASI's reserves, accumulated through excess income above payouts, are expected to be depleted by 2033.
While this anticipated depletion does not imply immediate cessation of benefit payments or outright bankruptcy, it suggests that, in about seven years, the program might need to institute benefit reductions potentially reaching as high as 23% for retired workers and their survivors if no corrective actions are taken.
Dispelling Myths About Congressional Actions and Social Security Funds
A prevailing misconception circulating on social media and discussion forums asserts that Congress has "stolen" funds from Social Security's trust funds, diverting the money to finance military conflicts and other government expenditures. Advocates of this view often claim that returning these funds, plus accrued interest, would resolve the program's funding deficit.
However, these accusations misunderstand the program's financial structure and legal framework. When the Social Security Act was enacted in 1935, it included a provision specifying that surplus funds collected beyond current obligations are invested in special-issue, interest-bearing government bonds. This means that income exceeding what is paid out, after covering administrative costs, is legally required to be invested in these dedicated securities.
These bonds earn interest and are guaranteed by the full faith and credit of the United States government. With the exception of brief technical disruptions and legislative delays in 1979, the U.S. government has not defaulted on its debt for over two centuries. The interest income generated from these investments constitutes one of Social Security's primary revenue streams.
Data made publicly available allows tracking of the Social Security trust funds' holdings. As of November 2025, the combined Old-Age and Survivors Insurance and Disability Insurance trust funds held $2.555 trillion invested in these special-issue government bonds, with an average interest rate of 2.641%.
This investment portfolio demonstrates adherence to legal requirements and confirms full accounting of the funds. No evidence exists that Congress has diverted or misused these entrusted sums. Indeed, if the government were to redeem these bonds prematurely and return principal alone without borrowing to replace them, Social Security would forgo more than $60 billion in annual interest income, further deteriorating its fiscal outlook.
Underlying Factors Driving Social Security's Financial Challenges
Since Congressional misappropriation of Social Security funds is unsupported by evidence, focus must shift to the genuine causes of the program's financial difficulties, namely demographic changes and policy decisions.
Significant demographic shifts have been unfolding for decades, beginning with the retirement of the baby boomer generation. This trend reduces the ratio of active workers contributing payroll taxes to beneficiaries drawing benefits. Put simply, fewer workers are supporting a rising number of retirees.
Concurrently, life expectancy has increased substantially since Social Security first began issuing benefits in 1940, resulting in retirees collecting benefits for longer periods than originally anticipated. The program was not designed to accommodate beneficiaries receiving payments for multiple decades.
In addition to these well-known trends, some less conspicuous demographic developments contribute negatively. For example, the U.S. fertility rate reached a historic low in 2024 at under 1.6 children per woman, falling short of the 2.1 replacement rate needed to maintain population levels. This decline is expected to erode the worker-to-beneficiary ratio further over the coming years.
Legal immigration, another essential source of new, younger workers entering the labor force to sustain payroll tax revenues, has also declined since the late 1990s. Fewer new immigrants translate directly into reduced payroll tax contributions, undermining Social Security funding.
Moreover, income inequality affects the program's revenue base. In 1983, approximately 90% of wages were subject to Social Security's payroll tax, whereas in 2024 only around 83% of earnings under covered employment were taxable. This means an increasing proportion of earnings is not subject to payroll taxation, diminishing income for the program.
Congressional Role Beyond Accusations of Theft
While direct theft or misappropriation by Congress has been debunked, lawmakers nonetheless bear responsibility for the program's challenges due to delays in addressing these demographic and fiscal issues.
The continuation of postponing reforms exacerbates the funding gap and increases the eventual cost of solutions for workers currently paying into the system and the beneficiaries depending on Social Security for their livelihoods.
In summary, Social Security faces a range of significant problems related to demographic shifts and policy inaction, but allegations of congressional theft are unfounded. The program's trust funds are managed in accordance with law, backed by U.S. government securities, and continue generating interest income vital to the program's operations.