The Promise Act of 2026: A Critical Evaluation | American Enterprise Institute
A bipartisan group of mostly retiring senators recently introduced a bill “to establish a process to assure the long-term fiscal stability of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund”, that is, Social Security. The bill, called the “PROMISE Act of 2026,” sets a compressed schedule under which the Social Security Advisory Board (“SSAB”), a small federal agency, must hold public hearings and draft reform legislation by mid-September, then have the Senate and House to vote on it and related amendments by November and December of this year under an expedited procedure with limited debate. The bill does not specify a particular reform solution, beyond requiring that the Trust Funds be able to pay benefits for 50 years and that no revenue or benefit source outside current Social Security features be included, except for the Supplemental Security Income (“SSI”) program, which pays disability and retirement benefits to impoverished individuals.
Although the impending insolvency of the retirement Trust Fund, now projected for 2032, has been known for some thirty years, the 2026 Trustees’ Report significantly deepened the long-run funding shortfall, mainly by reducing the assumed fertility rate. This worsening situation, together with the fast-approaching insolvency date, likely motivated the PROMISE bill. It is clearly better to act now than to wait and rush at the point of actual Trust Fund exhaustion. This bill, however, is not the right solution, for several reasons.
Its process is itself rushed and therefore unlikely to produce creative reforms for a program designed in the 1930s and largely unchanged in structure since the 1950s; instead, the quick process would likely introduce policy errors and unintended consequences and miss the chance to modernize the program. Expecting the SSAB, currently with two Democratic and two Republican members, spanning a wide ideological spectrum, and three of the President’s seats unfilled, to reach a compromise ultimately acceptable to Congress and the President seems optimistic. The SSAB is also operating with minimal support, as experienced staff were laid off last year amid the prospect of no future funding.
Keeping the legislative parameters within the current program means that neither personal retirement accounts, which could raise expected benefits, nor higher inheritance taxes, which could raise revenue more equitably, can be considered. Inclusion of SSI, which is financed by general revenues, means that SSI could be expanded to provide a high minimum benefit for a wider group without being paid for, significantly increasing the deficit.
Traditionally, Social Security reform proposals are designed to produce solvency over 75 years. This makes sense: it gives a new worker entering the system a reasonable expectation that his taxes and benefits will remain stable over his lifetime. A 50-year horizon, by contrast, with the financing shortfall projected to grow as the workforce shrinks, offers no such assurance; rather, further tax increases and benefit cuts are almost certain. Reliance in the bill on the actuary alone to score the proposal, rather than working with the Congressional Budget Office and the Joint Committee on Taxation, means less attention and precision will be paid to the proposal’s off-Trust Fund consequences for all federal revenue sources, interest rates, deficits, and future economic activity.
While one is sympathetic to the motivation for the PROMISE bill, current law already has a mechanism intended to force action, and it has not worked. As my colleague Andrew Biggs recently noted, the 1983 Social Security legislation, which last reformed the program, contains a provision — Section 709 of the Social Security Act — stating that if a Trust Fund is projected to be exhausted (interpreted by current and past Boards of Trustees to mean within ten years), the Board of Trustees, which includes the Secretaries of Treasury, Labor, and Health and Human Services, must
promptly submit to each House of the Congress a report setting forth its recommendations for statutory adjustments affecting the receipts and disbursements of such Trust Fund necessary to maintain the balance ratio of such Trust Fund at not less than 20 percent, with due regard to the economic conditions which created such inadequacy in the balance ratio and the amount of time necessary to alleviate such inadequacy in a prudent manner.
Over the years, the Boards wrote many Section 709 letters concerning the Social Security Old-Age and Survivors and Disability Insurance and Medicare Hospital Insurance Trust Funds, but never included actual legislative recommendations, despite the statutory mandate. There seems to be no substitute for leadership from the top of both political parties and both branches of government, as occurred in late 1981, when President Reagan and Speaker of the House O’Neill agreed to set up the Greenspan Commission, with political members and staffed by experts, leading to the bipartisan Social Security reform of 1983.
