Texas Senate Race Revives Social Security Privatization Debate
Millions of retirees could receive less than their full Social Security benefit within the next U.S. senator’s term if Congress fails to act—raising the stakes in this year’s most competitive Senate races.
Social Security’s Old-Age and Survivors Insurance trust fund, which pays retirement and survivor benefits, is projected to exhaust its reserves in late 2032. At that point, continuing revenue would cover about 78% of scheduled benefits, leaving a 22% shortfall.
Now, the winners of 33 regular Senate elections this November may decide how Congress responds.
“Senators elected this fall will be in office when Social Security becomes insolvent,” Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, warned at an Aug. 5 hearing.
Few places illustrate the coming collision more clearly than Texas, where the race between Republican Ken Paxton and Democrat James Talarico moved to toss-up this week.
In exclusive comments to Realtor.com®, both candidates pledged to protect Social Security through very different means.
Their competing visions come as a once-dormant debate over Social Security privatization resurfaces, reviving questions about whether Americans should be allowed to invest some of the money now flowing into the program.
Talarico would raise more revenue—Paxton says taxes should stay low
“Every Texan deserves to know that they’ll be able to retire and reap the benefits of Social Security,” Talarico tells Realtor.com. “In the Senate, I will fight to ensure all Americans can afford to retire.”
“I’ll stand up against attacks on Medicare and Social Security,” he adds. “I’ll ensure the wealthiest Americans pay their fair share into Social Security and I’ll incentivize employer-sponsored pensions.”
Already, those programs are falling short of essential expenses like housing.
Social Security benefits alone are not enough to cover basic living expenses for a mortgage-free retiree in Texas, according to a September analysis from Realtor.com.
Paying off a mortgage, after all, does not eliminate the cost of owning a home. And those additional expenses have risen much faster than inflation, which Social Security Cost of Living Adjustments (COLA) are pegged to.
The average annual insurance premium for a Texas home, for example, climbed from $1,961 in 2019 to a preliminary $3,506 in 2025—an increase of over 78%, according to the Texas Department of Insurance.
Housing costs can also spill into health care. Retirees who withdraw more heavily from tax-deferred retirement accounts to pay housing expenses can increase their taxable income enough to trigger higher income-related Medicare premiums.
And traditional pensions—the other guaranteed-income source Talarico says he wants to encourage—have been disappearing. Brookings found that Social Security, defined-benefit pensions and private annuities supplied about 43% of income among Americans 65 and older in 2022, down from just over half in the early 2000s.
Talarico’s proposed Social Security fix would apply payroll taxes to earnings above $400,000, bringing more high earnings into the tax base financing the program.
Paxton’s campaign, meanwhile, says he would protect benefits while keeping taxes low.
“Attorney General Paxton believes we must protect Social Security for the millions of seniors who spent their lives paying into the system and are counting on the benefits they earned,” campaign spokeswoman Madison Cercy tells Realtor.com.
While Paxton’s own federal housing tax plan is primarily aimed at people buying homes, his support for the One Big Beautiful Bill Act reflects that broader tax-cutting stance.
The law raised the SALT deduction cap to $40,400 in 2026, allowing homeowners who itemize to deduct more of their property taxes from federal taxable income. In Texas, that dropped the share of homeowners over the cap from 13.4% to 1.2%, according to an analysis from Realtor.com.
The law also created an additional deduction of up to $6,000 for taxpayers 65 and older, which the Trump administration has promoted as delivering “no tax on Social Security” for most seniors.
“Attorney General Paxton will continue to stand behind lowering taxes and ensuring Social Security remains protected for generations to come,” Cercy adds.
Why private accounts are back in the Texas debate
The race has also surfaced an old debate over whether to partially privatize Social Security, after Cercy reposted a comment on X from Ron Rule, a former CEO of As Seen On TV who is running for state representative in New Hampshire.
In it, Rule claims that a 2001 proposal would have allowed workers to put 10% of their Social Security contributions into the stock market, keeping the program solvent while giving the average recipient twice as much in benefits. Realtor.com was unable to find an independent analysis supporting those claims.
“The worst bet you’ll ever make is betting on government,” he wrote.
While Paxton has not directly endorsed Rule’s claims or publicly embraced Social Security privatization, the Republican Party of Texas supports the policy.
“We support privatization of the Social Security system to lift the rate of return that workers obtain on retirement contributions and to boost national saving and economic growth,” the 2026 platform states.
Texas Sen. Ted Cruz even drew an explicit connection between that goal and Trump Accounts, the new federal investment accounts for children.
“Here’s the dirty little secret. Trump accounts are Social Security personal accounts,” Cruz said at the Milken Institute Global Conference in May.
Cruz described the accounts as potential groundwork for reviving the personal-account push attempted during the George W. Bush administration. Within five or 10 years, he predicted, parents who had watched their children’s accounts grow could be receptive to being allowed to keep “a portion” of their own tax payments and invest it rather than sending it to the government.
On Friday, the Texas Alliance for Retired Americans called on Paxton to state whether he supports privatization.
“Social Security is not a stock pick—it’s a promise this country made to workers who pay into the system their whole lives,” Gene Lantz, the group’s president, said in a statement provided to Realtor.com.
Paxton’s campaign did not respond to follow up questions on whether he supports privatizing any portion of Social Security and whether workers should be allowed to divert payroll taxes into private investment accounts as of Friday afternoon.
Texas voters could help decide what happens next
Congress is already beginning to confront the approaching funding problem.
Retiring Texas Sen. John Cornyn, whose seat Paxton and Talarico are seeking, joined a bipartisan group in July backing a congressional process aimed at producing a long-term Social Security solvency plan.
And the voters with perhaps the most immediate stake in that debate could play an outsized role in choosing his successor. An August Texas Southern University poll found Paxton leading Talarico 56% to 38% among likely voters 55 and older, even as the overall race has tightened.
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