Social Security at Risk: Trump’s Plan Could Make Program Insolvent Within 6 Years
Former President Donald Trump’s campaign proposals may significantly accelerate the projected date when Social Security is expected to run out of funds, according to a nonpartisan budget group. A report released by US Budget Watch 2024, a project of the Committee for a Responsible Federal Budget (CRFB), suggests that Trump’s agenda could render the popular government program insolvent within six years, reducing the current timeline by a third.
Financial Implications of Trump’s Proposals
The CRFB report highlights that Trump’s policies would not only increase Social Security’s cash shortfall by trillions of dollars but also lead to steeper benefit cuts in the coming years. In their blog post, the budget group stated, “We find President Trump’s campaign proposals would dramatically worsen Social Security’s finances.”
Trump Campaign’s Response
The Trump campaign responded vehemently to the CRFB’s findings. Spokeswoman Karoline Leavitt stated that the “so-called experts at CRFB have been consistently wrong throughout the years,” emphasizing that Trump would continue to protect Social Security during a potential second term. Leavitt further asserted that Democratic nominee Kamala Harris poses a greater threat to the program’s solvency, arguing that her policies would increase undocumented immigration, which she claims could undermine Social Security.
Current State of Social Security Funding
According to the Congressional Budget Office (CBO), Social Security trust funds are expected to be exhausted by Fiscal Year 2034, with projections indicating that the program may only be able to pay full benefits until 2035. The Social Security fund for retirement benefits could run out even sooner, potentially in 2033.
Political Promises from Both Candidates
Both Trump and Vice President Kamala Harris have pledged to “protect” Social Security and Medicare while opposing any cuts. However, Trump’s campaign has also promised a series of tax cuts aimed at various demographics, which could further strain Social Security’s finances.
Details of Trump’s Tax Cut Plans
Trump has proposed several tax cuts, including eliminating taxes on Social Security benefits for seniors, ending taxes on service workers’ tips and overtime wages, reducing the corporate tax rate, and imposing broad tariffs on imports. The CRFB warns that these tax policies would exacerbate Social Security’s cash deficits.
Projected Financial Consequences
The CRFB report outlines specific financial impacts of Trump’s agenda, including:
- An increase in Social Security’s 10-year shortfall by $2.3 trillion through FY 2035.
- An accelerated insolvency timeline, moving from FY 2034 to FY 2031.
- A projected 33% benefit cut by 2035, significantly higher than the current 23% cut projected by the CBO.
- A 50% increase in the annual shortfall by FY 2035.
- A requirement for either a one-third reduction in current benefits or a 50% increase in revenue to restore Social Security’s solvency over 75 years.
Expert Opinions on the Impacts of Tax Cuts
Maria Freese, a senior legislative representative at the National Committee to Preserve Social Security and Medicare, noted that cutting income and payroll taxes would inevitably impact Social Security funding. She emphasized the urgency of addressing these issues given the looming trust fund depletion date.
The Need for Reform
Andrew Biggs, a senior fellow at the American Enterprise Institute and former principal deputy commissioner of the Social Security Administration, acknowledged that while Trump’s proposals might not directly aim to undermine Social Security, they could have significant unintended consequences. He pointed out the interconnectedness of Social Security with broader economic and tax policies, indicating that both campaigns should provide more comprehensive details on their reform plans as the funding depletion date approaches.
