How will Donald Trump impact Social Security?

How will Trump's second term impact Social Security?

November 7, 2024 2:28 PM

Experts say Donald Trump's proposals on a number of issues could affect Social Security's funding.

For the second time, Donald Trump will be president of the United States. What will that mean for Social Security?

The former and future president could impact the program in a number of ways. Most directly, he could propose legislation to change or make cuts to benefits. That's something Trump has said he'll never do, and even if he did, he would need Congress' approval — but that doesn't make it impossible.

"I am very highly concerned about it," said Mary Johnson, a retired Social Security analyst formerly at the advocacy group The Senior Citizens League. "Right now, I think it's really going to come down to the makeup of Congress."

But there are also other, more indirect ways Trump's leadership could affect Social Security. Even unrelated policies, including those on immigration, could reduce tax revenue for the program. But how the new administration would cope with such shortfalls is not yet clear.

"During campaigns, you don't get significant specifics," said Ron Mastrogiovanni, president of the cost-projecting software company HealthView Services. "None of the people running for office give us a detailed plan."

In lieu of such details, the strongest clues can be found in Trump's campaign rhetoric and his past behavior as president. Here's a closer look at the changes he might bring to America's largest social program.

Not 'one penny' in cuts

Throughout the 2024 campaign, Trump repeatedly vowed to "protect" Social Security, promising never to reduce benefits or raise retirement ages.

"President Trump has made absolutely clear that he will not cut one penny from Medicare or Social Security," the Trump campaign website says. "These programs are promises to our seniors, ensuring they can live their golden years with dignity."

However, other influential Republicans have called for cutting or even ending the program. Nikki Haley, a member of Trump's first cabinet, has supported raising the retirement age. Senator Rick Scott of Florida, who won reelection on Tuesday, once proposed allowing Social Security to "sunset" unless Congress renews it every five years.

Will these members of Trump's party influence him — or will he influence them? For now, some experts are taking the president-elect at his word.

"If I look at what he's been saying … he does not want a reduction in benefits, he does not want to delay the retirement age," Mastrogiovanni said. "I'm not going to dispute that."

No more taxes on benefits?

At the same time, Trump has pledged to end the taxation of Social Security benefits, which occurs for beneficiaries with income. That promise appealed to many seniors, but the program's trust fund relies on those taxes for 3.8% of its funding. That may not sound like a lot, but the fund is already expected to become insolvent by the mid-2030s.

But changing Social Security — or even the taxes that fund it — is no easy task. To enact his no-taxes-on-benefits policy, Trump would need not only majorities in both houses of Congress, but at least 60 votes in the Senate.

"You can't just go in by edict," Johnson said. "There are special rules around changes to Social Security, and one of those is you cannot change anything that has to do with tax revenue without special majorities in the Senate."

Fewer immigrants, fewer tax dollars

Over the past year, Trump has repeatedly promised to carry out "the largest deportation operation in American history." But many immigrants — even undocumented ones — pay payroll taxes, which provide 91% of Social Security's funding.

"If we start moving people out, most of these people have jobs," Mastrogiovanni said. "They're paying Social Security taxes."

According to the Committee for a Responsible Federal Budget, a bipartisan think tank, the combined effect of Trump's policies — including deporting immigrants and eliminating the benefit tax — would increase Social Security's 10-year cash shortfall by $2.3 trillion. It would speed up the program's insolvency by three years, from 2034 to 2031. And in 2035, the Committee calculated, Social Security would be forced to cut all benefits by 33%.

Of course, that's assuming these policies make it through Congress.

"If the House still only has a very small majority, I would suspect that there would be enough cold feet around Social Security legislation [to block it]," Johnson said. "It would be a heavy lift."

Even without new changes, Social Security is already rapidly approaching insolvency. If Trump wishes to leave every penny of benefits intact, he may need to do more than simply keep his hands off the program.

"A lot of the stuff that we're looking at, it doesn't matter whether it was Harris or Trump that won the election," Mastrogiovanni said. "These problems still exist, and both sides of the aisle are going to need to come together to solve them."