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(NEW YORK) — The Social Security fund will run out of money in as little as six years, a shorter time frame than previously estimated, according to a report released earlier this month by the programs’ trustees.

News of the funding cliff prompted a pair of lawmakers to reach across the aisle and propose a rescue plan in an opinion piece last week for the New York Times.

Sen. Bernie Moreno, R-Ohio, and Sen. Elizabeth Warren, D-Mass., called for lifting a cap on the amount of annual income subject to the payroll tax that funds Social Security. Currently, the cap stands at $184,500.

In other words, the plan would require individuals making more than $184,500 per year to pay taxes on the entirety of their income, potentially generating trillions in additional funds for the program over the next 10 years.

The proposal could, in theory, help administrators avoid painful solutions for recipients, such as a reduction of Social Security payments.

Legislation reflecting the proposal has not been introduced. In the New York Times, Moreno and Warren said they are “working on legislation.” Spokespeople for Moreno and Warren declined to comment on the status of the measure.

Here’s what to know about a new bipartisan proposal for safeguarding Social Security:

Is Social Security in financial trouble?

Yes, the program faces an ever-tightening budget squeeze over the next handful of years, according to a report this month from the Social Security fund’s trustees.

The Social Security trust fund will run dry in 2032, unless Congress combines the program’s old-age and disability funds, in which case insolvency would arrive in 2034, the report found. A finding last year from the program’s trustees predicted Social Security would become insolvent in 2033 or 2034.

The program generates revenue through a payroll tax paid by employees and employers, setting the income apart from the overall federal budget. Since the early 2010s, however, Social Security has paid more in benefits than it takes in through taxes, shrinking the program’s available funds, according to a study issued by the Urban Institute earlier this year.

The budget shortfall has been exacerbated by a decline in births and a reduction of immigration, resulting in fewer taxpayers at the same time that many Baby Boomers have begun receiving benefits. The One Big Beautiful Bill also removed a tax on Social Security benefits, depleting another source of the program’s revenue.

What is the Social Security reform proposal from Warren and Moreno?

The bipartisan reform proposal would tweak the payroll tax that funds Social Security.

The program is funded by a 12.4% payroll tax, which is evenly split between employers and workers. The tax, however, applies only to a maximum of $184,500 in annual income, meaning any income beyond that amount remains tax free.

The proposal put forward by Warren and Moreno would lift the cap on taxable income, allowing the tax to apply to the entirety of a person’s income even if they make more than $184,500 per year.

“Since the vast majority of Americans make less than that, most people are paying Social Security taxes on 100 percent of their earnings while the highest earners are paying on only part of theirs,” Warren and Moreno said in a co-authored opinion piece in the New York Times.

The elimination of the cap on taxable income would generate about $3.4 trillion in added revenue over the next decade, according to an analysis from the non-partisan Peterson Institute. The policy change would close more than half of the program’s funding gap, the group said.

“With rising prices and artificial intelligence causing economic uncertainty for the future, Social Security must remain a stable foundation to help retirees afford life’s basic necessities,” Warren and Moreno said.

The proposal drew opposition from at least one conservative lawmaker. Sen. Jon Husted, R-Ohio, faulted the plan for what he described as a “giant tax increase.”

“We need to secure social security, we need to protect it, we need to make it stronger,” Husted told “The Guy Benson Show” last week. “But I’m not on board with the approach that they’ve outlined.”

What are some alternative reforms for funding Social Security?

As the program’s budget woes have deepened in recent years, elected officials and researchers have proposed a range of solutions. As with any financial shortfall, the fixes either increase revenue or slash expenses.

An alternate means of increasing tax revenue for the program involves ratcheting up the payroll tax by one percentage point from 12.4% to 13.4%, the Peterson Institute said. That move would generate $601 billion in additional revenue over 10 years, closing about a quarter of the program’s funding gap, the group added.

If Congress fails to address the projected budget shortfalls, automatic cuts will dial back Social Security benefits by about 25% in 2032, the Social Security fund’s trustees said earlier this month.

Earlier this month, a bipartisan bill introduced in the House proposed establishing an independent commission composed of 13 members appointed by leaders in Congress and the president. The commission would seek out fixes for the long-term sustainability of the program. The bill, which counts three cosponsors, has been appointed to two House committees for consideration.

As the years pass, the task of reforming Social Security becomes a greater and greater challenge, the Urban Institute said.

“Waiting only makes the changes larger and more difficult,” the group added.

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(NEW YORK) — Barters Island Bees, a honey seller in Maine with flavors like “Gentle Ginger” and “Blueberry Lemon,” grew year after year — until a trade dispute broke out between the United States and Canada, chief executive Garret Denniston said.

Sales shrank last year after a drop-off in Canadian tourists hammered business at farmers’ markets and fairs, Denniston said. But revenue has bounced back, he added, surging 75% this year compared to the same period in 2025, in part due to an uptick in Canadian customers as tensions appeared to thaw.

“We thank Canadian tourists every time we see them,” Denniston told ABC News, but he said he’s worried a rekindled trade spat will curtail tourism again. “I’m just astounded. It’s only reasonable to expect it will go back in the other direction.”

When asked whether the trade war could help shape a highly competitive U.S. Senate contest in Maine, Denniston said, “Oh, absolutely. It definitely can.”

Tit-for-tat tariffs issued by the U.S. and Canada in recent weeks risk outsized harm for consumers and businesses in states near the northern border, some analysts told ABC News. Many of those states play host to key races in the battle for control of Congress in November’s midterm elections, including Senate contests in Maine, Ohio and Michigan.

Fresh levies on $20 billion in Canadian goods are expected to hike prices for imports ranging from orchids to hockey sticks, many of which are sold predominantly in states along the border, some analysts said.

A set of matching retaliatory tariffs that took effect on Tuesday, they added, may crimp sales for nearby U.S. businesses that export products to Canada. A drop in cross-border tourism could also damage companies located within a short trip from Canada, they said.

“If you go far up north, it’s an arbitrary line in the dirt between what’s in Canada and what’s in the U.S.,” Tyler Schipper, a professor of economics at the University of St. Thomas, Minnesota, told ABC News.

For now, levies apply to a sliver of goods that travel between the U.S. and Canada, limiting the overall impact of the trade dispute. The tariffs issued in recent weeks apply to only 6% of U.S. imports into Canada and 5% of Canadian imports into the U.S.

Still, some analysts said, the effects will likely be more pronounced in several states near the U.S.-Canada border, which account for a disproportionately large share of trade with the nation’s northern neighbor.

Canada is the top foreign buyer of exports from 26 U.S. states, and the top source of imports for 22 states, according to an analysis of U.S. Census Bureau data issued by the Royal Bank of Canada (RBC) late last month.

Maine and Michigan each rank among the top 10 states in combined annual import-export business with Canada, while Ohio ranks as the 15th-highest state, RBC found. Montana, North Dakota and Minnesota also rank among the top states on the measure.

“Someone in Oklahoma doesn’t feel this as much as someone in Dearborn, Michigan,” Jason Miller, a professor of supply chain management at Michigan State University, told ABC News, pointing to a major city in the U.S. auto industry. “It’s purely a geography story.”

Even as supply chains stretch across a vast, global economy, trade remains simpler and cheaper along short distances, Miller said.

“Business-to-business relationships still matter, and at the end of the day, the farther you have to transport something, the more challenging and expensive things are,” Miller said.

In Michigan, the powerhouse auto sector has already felt the effects of President Donald Trump’s tariffs — and car companies would face additional fallout from a potential escalation, Glenn Stevens Jr., an executive director of MichAuto, a statewide industry trade group, told ABC News.

Last spring, Trump slapped 25% tariffs on imported cars and auto parts, putting strain on a highly integrated auto supply chain between the U.S., Mexico and Canada.

The measure excluded goods compliant with United States-Mexico-Canada Agreement, or USMCA, a free trade agreement, but it still resulted in $12.5 billion in duties paid on auto-related imports last year, according to the Anderson Economic Group.

Last month, Trump threatened to ratchet up tariffs from 25% to 50% on Canada-made cars and auto parts beginning in January. Trump did not mention an exemption for USMCA-compliant products.

The potential measure, Stevens said, “would absolutely be untenable for the industry to operate under. It would decimate supply chains and virtually grind business to a halt.”

A higher tariff would likely raise prices for consumers and threaten job losses in the state, Stevens added, before noting the attention garnered by trade policy as midterms approach.

“There’s no question in an increasingly intense, rhetoric-filled political season, tariffs and trade are very much a primary issue,” Steven said.

On the campaign trail, Democratic Senate candidate Abdul El-Sayed said Republican Rep. Mike Rogers would be a “rubber stamp” for Trump in the Senate as Rogers has largely defended the president’s trade strategy, arguing that economic pressure on Canada is necessary to protect American jobs.

“Trump is escalating a trade war with Canada for his own vanity,” El-Sayed wrote in a social media post.

Rogers’ campaign previously declined to comment on the new round of tariffs on Canada, pointing instead to his past comments on bolstering U.S. manufacturing.

The White House said the tariffs put Americans first.

“Countless American workers, farmers, and businesses have borne the brunt of America’s lopsided trade relations, including with Canada which has demanded total access to the American market without reciprocity,” Desai wrote in a statement. “President Trump will never stop fighting to put Americans and America First.”

In Maine, Republican Sen. Susan Collins, who is running for reelection, said the dispute would raise costs for families and businesses in the state.

“The on-again/off-again trade talks between the U.S. and Canada lead to higher costs, risk, and uncertainty for Maine businesses. If the Administration proceeds with these tariffs, they will increase costs for Maine families, as most businesses will have no choice but to pass on the tariffs to their customers through higher prices,” she wrote on X late last month.

Despite her opposition, Trump’s tariffs have become a campaign talking point as Democratic challenger Troy Jackson, a former state senator, attempted to tie Republicans to Trump’s policies.

Jackson called the tariffs a “direct tax on working families.”

“Having spent most of my life working along the border, I know how vital trade with Canada is to Maine. Trump’s tariffs are a direct tax on working families,” Jackson said.

For some who live in states near the U.S.-Canada border, however, the trade war may not play a role in their ballot decisions.

Fred Fritz, a retiree who lives in East Lansing, Michigan, sharply criticized the tariffs on Canada imposed by Trump. Still, Fritz added, he remains undecided in the state’s high-stakes U.S. Senate contest between Rogers and El-Sayed.

“I don’t like either candidate,” Fritz said, before describing what he considers flaws of each one. “I’m not impressed.”

ABC News’ Gaby Vinick and Benjamin Siegel contributed to this report.

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(NEW YORK) — A heat wave blanketed a vast swathe of the United States over the 4th of July weekend, threatening the health of tens of millions of people and the power supply for thousands of homes.

A lesser-known risk of extreme heat, meanwhile, may hammer pocketbooks.

Heat waves threaten an array of costs for the economy, sapping the productivity of outdoor workers, shutting some shoppers inside their homes and driving up utility payments, some analysts told ABC News. All in all, they added, those effects could shrink output and hike some costs in areas impacted by heat waves.

“Extreme heat has economic consequences,” Justin Mankin, a professor of geography at Dartmouth University, told ABC News. “The consequences seem to be negative just about everywhere.”

Heat waves are becoming more frequent, more intense and longer lasting due to human-amplified climate change, according to the federal government’s Fifth National Climate Assessment. The average number of heat waves in major U.S. cities each year has doubled since the 1980s, that report said.

Extreme heat is considered the deadliest weather-related hazard in the U.S., according to the National Weather Service. About 2,000 Americans die each year on average from extreme heat, the Centers for Disease Control and Prevention noted.

A body of research indicates that heat waves also risk damage for the economy.

A study issued last year by researchers at the University of Florida, the European Stability Mechanism and the International Monetary Fund — which examined 203 countries over a 40-year period — found that an increased frequency of high temperatures and harsh droughts resulted in a 0.2% decline in gross domestic product (GDP).

Another report found total heat-related economic losses in the trillions of dollars. Taken together, economic damage from human-caused extreme heat likely cost as much as $50 trillion worldwide over a recent 30-year period, according to a 2022 study from Dartmouth University researchers.

“These things are costly and they’re getting worse because of climate change,” said Mankin, a co-author of the study.

The reasons for the economic impact range from diminished employee productivity to heightened utility costs to lost agricultural output, some analysts said.

Berkay Akyapi, a professor of business at the University of Florida and a co-author of the study on lost GDP, pointed to the crop damage caused by a heightened number of heat waves.

Nighttime temperature spikes are especially damaging, Akyapi said, since they deny crops a respite during a time period typically reserved for cooler temperatures. Fewer crops, in turn, threaten to elevate prices as the same number of dollars chase after a smaller supply of goods, he added.

A decline in domestic crop output can also force a given country to increase imports, putting further upward pressure on prices, Akyapi noted.

“If you can’t produce something, you have to import it and that of course raises prices,” he said.

Heat waves also cause higher prices for utilities as demand grows for air conditioning and other power-driven solutions, some analysts said.

The budget woes, in turn, cause a chain reaction, squeezing funds left over for other products and sapping consumer-driven economic activity. Steven Brown, a director of insights and evidence at the Aspen Institute Financial Security Program, told ABC News.

“It results in higher bills for households that are already financially tight or strained,” Brown said. “It causes a spillover in their ability to pay for other things like groceries or rent.”

In 2023, a report issued by a U.S. Senate committee found the negative economic effects from extreme heat are most pronounced in heat-exposed sectors such as agriculture, mining, construction, manufacturing and transportation. The risk owes primarily to lost productivity among workers in such industries, the report said.

“Together, the loss of productivity caused by heat is emerging as one of the biggest economic costs of climate change,” the report added.

To be sure, analysts noted that some cold-weather locations may benefit from heat waves, since higher-than-normal temperatures could improve agricultural output or allow for increased time spent outdoors.

“When you look around the world at places like Canada, Sweden or Norway — they can benefit. Heat waves are kind of good weather there,” Akyapi said.

Adaptive efforts, such as installation of air conditioning, can mitigate some of the negative economic effects, some analysts noted. Some governments are also exploring administrative solutions meant to help fight extreme heat.

Arizona appointed Eugene Livar as its first chief heat officer in 2024, tasking him with oversight of the state’s extreme heat preparedness plan. Democratic lawmakers in Arizona and Nevada introduced a bill in Congress last year that would add extreme heat to the Federal Emergency Management Agency’s list of major disaster qualifying events, unlocking access to federal support.

“Government interventions probably reduce some of the costs associated with these events, despite being costly interventions themselves,” Akyapi said.

Dartmouth’s Mankin said he expects heat waves to remain a feature of everyday life for the foreseeable future as human-caused climate change continues.

“These kinds of heat events are just going to be more commonplace. You’ll just have more days of the year that look like this, particularly when each subsequent year is hotter than the last,” Mankin said.

ABC News’ Kenton Gewecke and Emily Shapiro contributed to this report.

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