Donald Trump hopes to accomplish a lot in his second term. He intends to implement "the largest mass deportation program in history." He wants to end birthright citizenship. Trump seeks further tax cuts. He supports cutting regulations. The president-elect plans to impose steep tariffs on all imports to the U.S.
What about Social Security? Trump has a few ideas about the federal program, too. Here's the one thing Trump plans to do about Social Security that should concern retirees the most.
Image source: Official White House photo by Shealah Craighead.
What Trump won't do to Social Security
First, we should note some things that Trump won't do to Social Security. Importantly, Trump has pledged that he won't allow any benefit cuts during his second presidential term. Perhaps funding for the Social Security Administration could be changed somewhat if administrative efficiencies are identified. However, these efforts wouldn't impact benefit payments.
While some Republicans have advocated for raising the full retirement age (FRA), Trump is opposed to the idea. The GOP platform released in July stated, "No changes to the retirement age."
Some Democrats have proposed increasing payroll taxes or raising the amount of income subject to Social Security taxes. For example, Sen. Mazie K. Hirono and Rep. Jill Tokuda, both Democrats representing Hawaii in Congress, are co-sponsoring the Protecting and Preserving Social Security Act, which would phase out the earnings cap on payroll taxes that help fund Social Security. Trump isn't on board with those changes, either.
The biggest concern about Trump's Social Security plan
So, what should retirees be most concerned about with Trump's Social Security plans? It's another thing he won't do: address the program's solvency threat.
Social Security's combined trust funds are on track to run out of money by 2035, according to the latest Social Security Trustees' annual report. If nothing is done to bolster Social Security's finances before then, significant benefit cuts will be required.
Some of Trump's proposals could accelerate the timeline in which Social Security becomes insolvent. For example, he wants to eliminate all federal taxes on overtime, tips, and Social Security benefits. These moves would reduce the amount of revenue flowing into Social Security. The president-elect's plans for mass deportations could negatively impact Social Security as well since many undocumented immigrants pay payroll taxes that help fund the program.
Trump did mention one idea during the presidential campaign that might help boost Social Security revenue. In a town hall in December 2023, he suggested that increasing domestic oil and gas drilling could address the country's fiscal problems, including Social Security.
However, the nonpartisan Committee for a Responsible Federal Budget determined that federal revenue from oil and gas leasing would have to be roughly 27 times larger than it is now to cover Social Security's actuarial deficit. The organization concluded, "[R]elying on revenue from oil and natural gas assets alone will not fix the problem."
What could be done to fix Social Security?
Social Security can be fixed, though. Painful benefit cuts in the future can be avoided. How? Potentially by doing some of the things Trump opposes.
Gradually raising the FRA could help. Increasing payroll taxes or raising/eliminating the taxable maximum would increase revenue for Social Security. There are downsides to these proposals, though. Future retirees would receive lower lifetime benefits with a higher retirement age. At least some Americans would keep less of their earnings with tax increases or adjustments to the taxable maximum.
Still, major changes are needed to prevent Social Security from running out of money in a few years. And the longer it takes to make those changes, the more painful they will be.
