Social Security was established to protect households from poverty due to the loss of earnings resulting from old age, disability, and death. But low-income Americans now typically receive less money from the program in retirement benefits than they previously paid in payroll taxes.

While Social Security spent more than $1.2 trillion in 2021, the program’s spending goes mostly to relatively wealthy seniors. As a result, 9% of seniors are still left with incomes below the poverty level. Among seniors who are over 80, live alone, or are black, the rate is even higher. Although governments in Australia and Canada spend half as much per capita on old-age pensions as the U.S., their poorest senior citizens enjoy substantially higher incomes than their American counterparts.

When Social Security was developed in the mid-20th century, it was deemed politically infeasible to provide equal retirement benefits to elderly Americans (as was typical in other English-speaking countries), due to racial divisions and regional economic disparities. For a while, retirees at all income levels benefited from redistribution from working Americans—receiving benefits that greatly exceeded their prior contributions. But as the program has matured and as the ratio of retirees claiming benefits to contributing workers has increased, subsequent generations have been required to pay for their predecessors’s as well as their own benefits. This has exposed the fundamentally flawed structure of the system.

The present Social Security system is set to run out of money in 2034, after which an acrosstheboard payroll tax hike of more than 3 percentage points would be required to fund benefits currently promised to retirees. In return for these additional revenues, legislators should insist that Americans be allowed to enroll in a new benefit option more focused on protecting seniors from poverty in old age.