The national debt passed $40 trillion this month, and the federal government's two largest entitlement programs are the biggest reason it keeps climbing.
The Congressional Budget Office projected that Social Security and Medicare will account for 81% of the increase in mandatory federal spending between 2023 and 2033. In 2026 alone, the two programs make up nearly half of the projected $362 billion rise in mandatory outlays. Net federal interest costs, meanwhile, are set to exceed $1 trillion this year and climb to $2.1 trillion by 2036 — the taxpayer footing the bill just to service debt already on the books.
Social Security operates as a pay-as-you-go system: payroll taxes collected from today's workers fund benefits for today's retirees. Employees and employers each pay 6.2% of wages up to a taxable maximum of $184,500 in 2026; the self-employed pay the combined 12.4%. A median-wage worker retiring in 2027 is projected to collect roughly $730,000 in lifetime benefits against less than $200,000 in combined worker-and-employer contributions — 265% of what the worker personally paid in, once the employer share is excluded.
The arithmetic is now unavoidable. The 2026 Social Security trustees report projects the Old-Age and Survivors Insurance trust fund will be depleted in the fourth quarter of 2032, at which point incoming revenue would cover only 78% of scheduled benefits. The combined trust funds are projected to run dry in 2034, covering 83% of scheduled payouts. The Committee for a Responsible Federal Budget estimates an across-the-board cut of roughly 22% once the retirement fund is exhausted, absent congressional action.
CRFB has floated one fix: a 'Six Figure Limit' capping Social Security benefits at $100,000 a year for a married couple retiring at normal age, or $50,000 for a single retiree, adjusted for marital status and claiming age. The group says the cap would hit only the top 0.05% of couples in its early years — households with average annual retirement income above $2.5 million and average net worth above $65 million. CBS News reported in March that roughly one million individual beneficiaries already collect at least $50,000 a year, meaning a married couple with two such earners can clear six figures. The Social Security Administration did not respond to a request for comment.
The generational split on all this is stark. A December 2025 Cato Institute survey found only 34% of Gen Z respondents expect Social Security to still exist by the time they retire, and a June 2026 Cato analysis found 79% of younger respondents expect their own benefits to be cut. Just 45% of Americans, per Cato's 2025 polling, correctly understand how the program even works.
That combination — record government borrowing, a pay-as-you-go system running on borrowed time, and a workforce that no longer believes it will collect what it's promised — is what happens when a mandatory-spending program is left on autopilot for decades. The taxpayer is financing both the interest on yesterday's deficits and benefits for retirees who, in some cases, are already among the wealthiest people in the country. Reform proposals like CRFB's cap point to a narrower, means-tested fix rather than a blanket tax hike or benefit cut across the board. Whether Congress acts before 2032, or simply lets the automatic cuts hit every future retiree regardless of need, is now a question with a hard deadline attached.
