Social Security is one of the most important programs in the United States for helping Americans stay financially secure. In 2023, it lifted 22 million people out of poverty, including 16.3 million seniors aged 65 and older. For many retirees, Social Security is a crucial source of income. Surveys by Gallup over 23 years show that 80% to 90% of retirees rely on Social Security as a major or minor part of their income.
However, this 90-year-old program is facing financial challenges. To fix it, action is needed from elected officials, including President Donald Trump. While Trump has promised to support seniors, one of his key promises about Social Security may have to be broken.
The Financial Challenges of Social Security
Social Security’s financial situation has been declining. Every year, the Social Security Board of Trustees releases a report on the program’s financial health. This report shows how Social Security gets its money and where it spends it. The most important part of the report is the long-term forecast, which looks at how changes in the economy and population affect Social Security’s ability to pay benefits over the next 75 years.
According to the 2024 report, Social Security’s long-term funding shortfall has grown by $800 billion to $23.2 trillion. This means that from 2024 to 2098, the program is expected to spend $23.2 trillion more than it takes in. Even more concerning is the prediction that the Old-Age and Survivors Insurance Trust Fund (OASI), which pays benefits to retirees and survivors, will run out of money by 2033. If this happens, benefits could be cut by up to 21% to keep the program running.
The financial problems are not due to myths like Congress stealing money or undocumented immigrants receiving benefits. Instead, they are caused by real issues like low birth rates, income inequality, and fewer people immigrating to the U.S.
Trump’s Promise on Social Security
Most presidents avoid making big changes to Social Security because it often leaves some people worse off. However, Trump has promised to stop taxing Social Security benefits. Currently, up to 85% of Social Security benefits can be taxed if a retiree’s income is above certain levels. These income levels have not been adjusted for inflation, so more retirees are being taxed on their benefits over time.
If Trump’s promise were kept, it would increase payouts for about half of all retirees. However, this would also hurt Social Security’s finances. The program gets its money from three sources: payroll taxes, interest on its investments, and taxes on benefits. The payroll tax is the biggest source, but taxes on benefits have become more important over time. Eliminating this tax would cost the program nearly $1 trillion over 10 years, making its financial problems worse and possibly leading to bigger benefit cuts in the future.
Why Trump’s Promise May Be Broken
While ending the tax on Social Security benefits is popular, it would be bad for the program’s finances. To make this change, Trump would need 60 votes in the Senate, which is unlikely given the current political climate. Even within his own party, there may not be enough support for this idea.
In the end, Trump will likely have to break his promise on Social Security, and it will be the right decision for the program’s future. Social Security is too important to risk further financial instability.
