Alarm bells are ringing in Washington, D.C., with the Trump Administration warning that Social Security is projected to become insolvent in 2032. This would trigger an automatic 22% cut to benefits for over 70 million elderly or disabled Americans who rely, at least in part, on the program.
Debate is swirling this week, as two unlikely allies have teamed up with a bipartisan proposal to address the shortfall and prevent looming benefit cuts. U.S. Senators Elizabeth Warren (D-MA) and Bernie Moreno (R-Ohio) have proposed lifting the Social Security payroll tax cap. They estimate this would bring in over $3 trillion to Social Security and keep the program solvent into the next generation.
Currently, in 2026, wealthy Americans pay nothing into Social Security on the portion of their annual incomes that is over $184,500. The vast majority of Americans earn far less. This means that nurses, social workers, non-unionized warehouse workers, construction workers, private school teachers, and anyone who earns less than $184,500 pays a larger share of their income into Social Security than millionaires, billionaires, and wealthier professionals, like lawyers, doctors, and CEOs.
We reviewed county-level Social Security Administration data from December 2024 and calculated that, in Kentucky, Ohio, Pennsylvania, and West Virginia, looming automatic cuts to Social Security would result in the loss of nearly $2.5 billion in monthly benefits for our region. That’s $30 billion per year instantly removed from peoples’ incomes, making disabled Americans and senior citizens less able to afford groceries, transportation, healthcare, and housing. On average, recipients would see a cut of $363 per month, or $4,366 per year.
Appalachians will be heavily impacted by what happens (or doesn’t happen) to Social Security. Data from the Social Security Administration shows that Appalachian counties in Kentucky, Ohio, Pennsylvania, and West Virginia have 13.6% more monthly Social Security recipients per capita than the non-Appalachian counties in the same states. As a whole, Appalachian counties have nearly 8.3% more Social Security recipients per capita than the country.
What’s more, Social Security checks are more important to people in Appalachia and the overall Appalachian economy. Nationally, Social Security provides about 6-7% of peoples’ incomes, but in West Virginia, the state most dependent on Social Security, the figure is nearly two-thirds greater at 10-11%.
Finally, as important as Social Security income is to people in Appalachia, they are likely to get a smaller lifetime benefit than most Americans because life expectancies there are as much as five years less than the national average. In the poorest parts of Appalachia, life expectancy barely reaches age 67, the age at which they become eligible for full benefits.
We acknowledge that there is growing backlash to tax increases. Understandably so, as inflation rose nearly 3.8% last year, which remains well above the Federal Reserve’s 2% target. Everything is more expensive for everyone. And there are many examples of debatable government spending that anyone, of any political persuasion, can point to. But the fact is, raising revenue through lifting the payroll cap remains the most bipartisanly popular approach to addressing Social Security. 75% of surveyed Republicans, 90% of surveyed Democrats, and 80% of surveyed Independent voters supported revenue increases as opposed to benefit cuts.
Critics arguing for “fairness” are misguided.
But Beltway ideologues masquerading as economic experts have hijacked this debate, framing the Warren-Moreno proposal as “unfair.” While at first glance, it might be enticing to argue for “means testing,” where policymakers get to then decide who “deserves” Social Security and who does not, this is a slippery intellectual slope that could lead to more and more taxpayers being denied benefits. What should the cutoff be? The answer is inherently subjective.
Other wonky proposals often center on either masked benefit reductions (such as using chained CPI rather than wages to calculate benefit adjustments or raising the eligibility age) or the privatization of Social Security altogether, which would represent a windfall for private, for-profit investment firms.
Neoliberal and libertarian think-tank proposals peddling benefit reductions are dressed in political, Reagan-era, anti-government rhetoric and intended to further undermine one of the lasting tenets of the social contract established by the New Deal: that each new generation of American workers would pay it forward to help the previous generation retire securely in old age. While Boomers are not faultless in perpetuating some of America’s deep economic problems, it is nevertheless radical to propose that this should be the first generation of workers to abandon that promise. Aside from violating the social contract that enabled a century of American prosperity, the political resistance to the Warren-Moreno payroll tax cap elimination has several problems.
First, Boomers are not “often wealthy.” While many billionaires are coincidentally Baby Boomers, most Boomers are not billionaires. Guys like Bill Gates and Jeff Bezos dramatically skew the distribution of the average. Instead, we should look at the median, which shows us the wealth of the middle-of-the-pack Baby Boomer. Data from the Federal Reserve Survey of Consumer Finances compiled by Fidelity show that the median net worth gap between generations is not nearly as large as the skewed averages.
Despite the political narrative that “all” Baby Boomers have pillaged the American economy and hoarded wealth, in actuality, most Baby Boomers have not. And certainly not Appalachian Baby Boomers.
Second, Millennials may already be on track (on average) to have larger private retirement accounts than Baby Boomers. We can gut check this fairly easily. Data from Fidelity’s “Building Financial Futures” 2025 Q3 report shows average 401(k) balances by generation:
Let’s do some envelope math and assume:
- The national median millennial salary is $59,800
- The current average millennial 401(k) balance of $80,700
- A 10% pre-tax retirement contribution
- A 50% employer match up to 3%
- A modest 6% average investment return (The S&P has averaged around 7% in inflation-adjusted return since 1957, and between 8% and 11% in the last decade)
- 3% annual inflation and a corresponding 3% cost-of-living adjustment to salary
You can plug these basic parameters (or more conservative ones) into a retirement calculator and see that, adjusted for inflation, this puts a millennial worker on track to retire at 65 years old with $326,000 of purchasing power in their 401(k), which is 22% more than the average Baby Boomer 401(k) has today. This allows for apples-to-apples comparisons of generations at the same stage in their economic lives. And, presumably, millennials would still expect to receive the same Social Security benefits as Baby Boomers on top of potentially larger private retirement balances.
Private retirement accounts aren’t a practical, or equitable solution
The debate offered by the pro-privatization and pro-benefits reduction crowd so far assumes that all Americans have equitable access to employee sponsored or private retirement accounts like 401(k)s. Most do not.
The 2020 Census found that only 58.1% of Baby Boomers have a private retirement account, compared with 56.1% of Gen X and 49.5% of Millennial workers. More alarming is the huge racial gap in private retirement account ownership. While 53% of white Americans reported owning a private retirement account, only 36.8% and 28.3% of Black and Hispanic Americans reported ownership.
When the lack of private retirement savings is paired with the decline in defined benefit pensions, maintaining and strengthening Social Security becomes even more important. Between 1980 and 2008, the percentage of Americans with defined benefit pension plans declined from 38% to 20%, according to data from the U.S. government, mirroring the decline in unionization.
In this light, it is easy to see the pushback on lifting the Social Security payroll tax cap for what it is: a modern manifestation of Reagan-era, neoliberal beltway policymaking that preaches that the government can do no good and only markets can solve our retirement woes.
But the promise of Social Security has helped Appalachians. Not enough, to be sure. But as the raw data show, more Appalachians rely on Social Security, and Social Security has delivered them more purchasing power with their benefits, adjusted for regionally lower costs of living, than wealthier areas of the country.
Most elderly Appalachians aren’t hoarding wealth in extravagant houses or giant 401(k) accounts. They have worked hard, paid their payroll taxes, and now their lives depend on their fixed incomes from Social Security. And it is likely that many future Americans without private retirement accounts, including Appalachians and other Americans from marginalized backgrounds, will depend on Social Security too. To risk automatic cuts of over 20% to avoid raising taxes on billionaires, millionaires, and high-income workers earning over $184,500 per year is bad policy.