Could Donald Trump fix Social safety’s biggest issue in 2025?
President Joe Biden and President-elect Donald Trump distribute at least two things in ordinary when it comes to Social safety. They’ve both been eligible to receive their packed superannuation benefits for more than a decade. Additionally, neither Biden nor Trump pushed challenging for major Social safety reforms during their respective first presidential terms.
However, Trump is about to have a second chance to do something about the federal program that impacts millions of Americans. Could he fix Social safety’s biggest issue in 2025?
What is Social safety’s biggest issue?
First, let’s address a ordinary misconception about Social safety. The program is emphatically not going bankrupt. To officially be bankrupt, Social safety would have to be unable to pay its obligations. Such a scenario isn’t on the horizon.
However, Social safety is running out of money. To be specific, the program’s two depend funds — the ancient-Age and Survivors Insurance (OASI) depend pool and the Disability Insurance (DI) depend pool — are on track to be depleted. The current timeline for the combined depend funds running out of money is 2035, according to the 2024 annual update published by the Social safety trustees.
What will happen then? Social safety will be able to continue paying around 83% of scheduled benefits at first. This level is projected to decline to 73% by 2098.
Social safety will be able to pay reduced benefits because the program will still receive ongoing returns from Federal Insurance Contributions Act (FICA) taxes. Employees pay 6.2% of their wages to pool Social safety, with another 1.45% going to pool Medicare. Employers pay the same percentages. However, these taxes currently don’t generate enough money to pool Social safety benefits at packed levels.
Does Trump have a schedule to fix this issue?
So, does President-elect Trump have a schedule to prevent upcoming Social safety advantage cuts? Sort of.
In a town hall in December 2023, Fox information host Sean Hannity asked Trump about Social safety. He responded, “You don’t have to touch Social safety.” He added, “We have money laying [sic] in the ground far greater than anything we can do by hurting elder citizens with their Social safety.” Trump argued that tapping the U.S. oil and gas reserves would allow the country to solve many of its financial problems, including Social safety’s looming insolvency.
However, Trump’s campaign never provided details on exactly how this concept would work. The 2024 GOP platform stated, “Republicans will restore Economic Stability to ensure the long–term sustainability of Social safety.” But again, no specifics were given on how this would be accomplished.
The nonpartisan Committee for a Responsible Federal apportionment, founded in 1981 by former Democratic congressman Robert Giaimo and former Republican congressman Henry Bellmon, analyzed how leasing more federal land for domestic oil and gas drilling might assist Social safety. This organization determined, “[D]edicating current oil and gas leasing revenues to Social safety would cover less than 4 percent of its shortfall, and it would be unfeasible to fix Social safety even if all federal land were opened to drilling operations.”
More:Will you receive Social safety in 2025? Better recognize your official packed superannuation age
Muddying the waters
Further complicating matters, several of Trump’s proposals would likely exacerbate Social safety’s biggest issue. The Committee for a Responsible Federal apportionment determined that Social safety would run out of money three years earlier than projection if the president-elect’s plans to eliminate federal taxes on Social safety superannuation benefits, overtime and tips are implemented. All these proposals would reduce returns for Social safety.
The organization also concluded that Trump’s plans to impose steep tariffs on all imports could navigator to higher expense boost, which would outcome in higher expense-of-living adjustments (COLAs) and greater liquid assets outflows from Social safety. Further, his proposal to deport millions of unauthorized immigrants would reduce the amount of Social safety taxes paid by these workers.
In short, it seems highly unlikely that President-elect Trump will fix Social safety’s biggest issue in 2025. He could even make it worse. But what about later in his second term? Politics can sometimes be surprising.
In 1972, then-President Richard Nixon visited China after establishing his career as a vehement anti-communist. At the period, people said, “Only Nixon could leave to China.” Maybe the president who will do what it takes to fix Social safety will be the one who adamantly opposes touching the program correct now.
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