The 45th President of the United States is now the 47th. And he hit the ground running.
President Donald Trump issued a flurry of executive orders soon after his inauguration last Monday. Most of them were expected, tying in with his pledges during the presidential campaign and after the November election.
Retirees weren't directly affected by many of those executive orders. But will President Trump's moves in his first week back in office impact Social Security?
Image source: Official White House photo by Shealah Craighead.
A busy start
Several of Trump's executive orders in his first few days back in the White House related to immigration. He declared "a national emergency at the southern border of the United States." Trump authorized the Secretary of Defense and the Secretary of Homeland Security to take specific steps to secure the borders. He also issued a proclamation "guaranteeing the states against invasion"
The president made energy independence a top priority of his 2024 campaign. Unsurprisingly, several of his initial executive orders were aligned with this goal. For example, one focused on expediting the federal permitting and leasing of land in Alaska for energy exploration and production and prioritizing the transportation of Alaskan liquified natural gas to other states and U.S. allies in the Pacific region. Another executive order declared "a national energy emergency" and authorized government agencies to promote domestic energy production.
Trump also ordered the heads of federal departments and agencies "to deliver emergency price relief" to address inflation. His presidential memorandum listed several actions for achieving this goal, including eliminating regulations and inflationary federal policies.
Other actions by Trump related to officially naming his cabinet appointments and acting cabinet positions. The president declared a federal hiring freeze. He also made some symbolic moves, including renaming Denali as Mount McKinley and changing the name of the Gulf of Mexico to the Gulf of America.
Potential impact on Social Security
A few of Trump's moves in the first week of his second presidential term directly impact Social Security, albeit probably not in a major way. For example, he named Michelle King as the acting commissioner of the Social Security Administration. King previously served in several federal positions, most recently as SSA's Deputy Commissioner for Operations. Trump's hiring freeze could also potentially impact SSA's ability to serve Social Security beneficiaries.
Could the president's early steps have a greater effect on Social Security? Maybe. Trump's prioritization of immigration enforcement holds the potential to accelerate how quickly the Social Security trust funds run out of money. The Institute on Taxation and Economic Policy estimated that illegal immigrants paid $25.7 billion in Social Security taxes in 2022. The 2024 Social Security Trustees report also concluded that more immigration helps Social Security financially.
Trump's executive orders intended to boost domestic oil and gas production might lead to lower energy prices and help reduce inflation. This could translate to lower Social Security cost-of-living adjustments (COLAs) since they're based on inflation. However, U.S. domestic oil production is already at an all-time high, so it remains to be seen how much impact the president's actions will have.
What about the memorandum for federal agency heads to "deliver emergency price relief" to Americans? This goal is laudable but much easier said than done. The reality is that the underlying causes of inflation are complex. Federal agencies could take steps that help incrementally but probably not enough to move the needle in a significant way. Social Security COLAs, therefore, likely won't be affected much by this presidential directive.
Are tariffs next?
There was one glaring omission during Trump's busy first week back in office: no executive orders related to tariffs. However, the president said to reporters that he expects to impose some tariffs on Feb. 1, 2025.
Trump has recently mentioned 25% tariffs on all imports from Canada and Mexico with 10% tariffs on China. During the presidential campaign, he talked about a universal tariff of up to 20% on all imports with much higher tariffs on imports from some countries.
Many economists believe that such steep tariffs would reignite inflation. If Trump moves forward as he's indicated, it's possible that future Social Security COLAs could be higher than they otherwise would.
