Trump's Policies Threaten Social Security's Solvency

The Social Security Trust Fund, which supports retirement, survivor, and disability benefits for tens of millions of Americans, faces a looming crisis. A recent report by the Committee for a Responsible Federal Budget (CRFB) warns that Donald Trump's economic policies, if implemented, could dramatically worsen Social Security's financial outlook. The report suggests that the trust fund might run out of money within six years if Trump wins the 2024 presidential election.


Trump's proposed policies, such as ending taxes collected on Social Security retirement benefits, ending taxes on tips, imposing high tariffs, and accelerating deportation of undocumented migrants, would all impact the Social Security Administration's (SSA) ability to fund benefits. The CRFB found that these policies would increase Social Security's 10-year cash shortfall by $2.3 trillion through fiscal year 2035, advancing the program's insolvency by three years to 2031. Consequently, benefits could be automatically slashed by around 33 percent across the board in 2035.


The CRFB also highlighted the potential revenue loss for the SSA from Trump's proposed exemptions. Ending taxation on Social Security benefits would result in around $950 billion in revenue loss, while nixing tip taxation would cost the SSA $900 billion by 2025. Together, increased deportations and tariffs would also shave $400 billion from the SSA's funding coffers. Many undocumented immigrants have payroll taxes deducted from their paychecks to support the fund but never qualify for benefits, making them a net positive for the program.

Trump's high tariffs on imports could also influence Social Security's financial health through inflation and benefit payouts. If the tariffs drive high inflation as projected by Wall Street experts, Social Security will have to pay out more in benefits because of automatic cost-of-living adjustments based on inflation.

The report by the CRFB is not the only think-tank warning about the potential impacts of Trump's policies on Social Security. The Tax Foundation earlier this year stated that without a pathway in place to recoup the revenue loss, Trump's Social Security taxes cut would reduce tax revenue by about $1.4 trillion from 2025 to 2034, likely accelerating the insolvency of the trust funds.

In conclusion, Trump's proposed policies, if implemented, could have severe consequences for the Social Security Trust Fund. The potential acceleration of the program's insolvency and the significant reduction in benefits highlight the importance of addressing these issues promptly.