Social Security is one of the most important programs for millions of Americans, but under Donald Trump’s potential policies, there could be some big changes. Let’s break down what might happen and what it could mean for retirees and workers.
Social Security Benefits Will No Longer Be Taxed
Trump has made ceasing to tax Social Security benefits one of his main platforms. Currently, depending on their total earnings, some beneficiaries must pay taxes on a part of their Social Security income. People would have more money in their pockets if these taxes were eliminated. There’s a caveat, though: this modification might result in less money coming into the program, which could affect its long-term viability.
Impact of Deportation Plans on Social Security
Trump’s plans for mass deportations could also affect Social Security. Here’s how: undocumented workers contribute billions in payroll taxes, even though they don’t qualify for benefits. Deporting a large number of these workers could shrink Social Security’s cash flow by as much as $20 billion a year. Over time, this might reduce the funds available for current and future retirees.
Tax Cuts and Their Effect on Funding
Trump has floated ideas like extending his 2017 tax cuts and even removing taxes on tips, overtime, and Social Security benefits. While these moves could save taxpayers money, they might add significantly to the national debt—an estimated $7.5 trillion over the next decade. Some experts worry that such a high debt load could strain the U.S. economy, making it harder to fund programs like Social Security.
Could Insolvency Come Sooner?
Right now, Social Security is projected to run out of full funding by 2034, but analysts say Trump’s proposals could speed that up. If his plans go into effect, insolvency could happen as early as 2031. What would that mean? If no action is taken, benefits could be cut by about 33%, instead of the 23% currently expected.
These potential changes highlight the challenges ahead for Social Security and the importance of balancing benefits with financial sustainability.
