During his presidential campaign, Donald Trump promised not to make any cuts to Social Security. And he’s managed to make good on that promise so far.
Not only did Trump not cut Social Security, but he also introduced a new tax break for seniors that allows millions of older Americans to now avoid paying federal taxes on their benefits. Many would consider that a win.
But one thing Trump has so far failed to do is address Social Security’s pending financial shortfall. And if he and his team don’t start working on solutions, the millions of retirees who rely on those benefits could be in for a world of financial upheaval.
Trump never addressed the issue of Social Security’s insolvency
Social Security has a major math problem on its hands. In the coming years, the program is expected to owe more money in scheduled benefits than it brings in via payroll taxes, which is Social Security’s primary source of funding.
The root of the problem stems from an aging population. As baby boomers retire in droves, they’re claiming benefits while denying Social Security the crucial payroll tax income it needs.
Younger workers, meanwhile, aren’t replacing boomers in the workforce at a fast enough rate to make up for that lost payroll tax revenue. As a result, the program is looking at broad benefit cuts once its trust funds run out of money.
The timing of that is still subject to change. Earlier this year, the Social Security Trustees projected that if lawmakers were to combine the program’s two trust funds, there would be enough money to cover scheduled benefits through 2034.
That number could shift in the next year or two — for better or worse. But all told, Social Security is facing the strong possibility of broad cuts unless lawmakers intervene. And so far, Trump has done nothing to shore up Social Security’s finances.
A solution is desperately needed
The good news on benefit cuts is that the Trump administration has several options for preventing them from happening. One is to raise the wage cap that determines how much annual income is taxed to fund Social Security. Another is to raise the current Social Security tax rate so that workers across all income levels pay more into the program.
These solutions aren’t necessarily ones working Americans will be thrilled with. But other solutions pose problems, too.
Another option, for example, is to push back Social Security’s full retirement age for younger workers. That effectively forces them to work longer until they can claim their monthly benefits without a lifelong reduction.
This change would likely do good things for Social Security’s finances. But many working Americans don’t want to be forced to spend an extra year or two in the labor force.
Time is of the essence
The fact that Trump has not addressed Social Security’s financial shortcomings since taking office is problematic. And as the clock ticks down toward the program’s insolvency, the issue is becoming all the more pressing.
Trump needs to prioritize a solution to prevent Social Security cuts and start implementing changes as soon as possible. Otherwise, future lawmakers could be left to grapple with a widespread poverty crisis among retirees.
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