Social Security will be only nine years away from insolvency when the next President takes office in 2025. If former President Donald Trump returns to the White House and his stated campaign agenda were enacted in full, a new estimate says that insolvency window would shrink by one-third, to only six years.
And instead of 23% reduction in benefits in 2035 forecast by the Congressional Budget Office back in August (which would mean a $16,500 cut facing a typical couple retiring just before insolvency), Trump’s agenda being enacted would also bump it up to a 33% across-the-board cut to all benefits, according to the new analysis released Monday from the nonpartisan Committee for a Responsible Federal Budget (CRFB).
In enacted today, a 33% benefit cut would mean that the average 2024 monthly Social Security benefit check of $1,907 would be reduced by $629 per month to $1,278.
“President Trump’s proposals to eliminate taxation of Social Security benefits, end taxes on tips and overtime, impose tariffs, and expand deportations would all widen Social Security’s cash deficits,” the CRFB report said.
Under CRFB’s central estimate, these policies would add about $2.3 trillion to Social Security’s cash deficit between FY 2026 and 2035, which is about 1.8% of current law taxable payroll once phased in. This includes $950 billion from ending the income taxation of Social Security benefits, about $900 billion from ending payroll taxes on tips and overtime pay, and roughly $400 billion from changes to tariffs and immigration.
In response to the report, Trump campaign spokesperson Karoline Leavitt said in an emailed statement to CBS MoneyWatch that, “The so-called experts at CRFB have been consistently wrong throughout the years. President Trump delivered on his promise to protect Social Security in his first term, and President Trump will continue to strongly protect Social Security in his second term.”
Leavitt added that Trump’s plans for “unleashing American energy, slashing job-killing regulations, and adopting pro-growth America First tax and trade policies” would put Social Security “on a stronger footing for generations to come.”
CRFB disagrees, as it mentioned in the new report.
“President Trump has said he would close Social Security’s long-term shortfall by increasing drilling for oil and natural gas and by growing the economy. However, we’ve shown that increased energy exploration is unlikely to have a meaningful effect on Social Security—even if the gains were deposited into the trust fund,” the report said. “We’ve also shown that it would require unrealistically fast economic growth to close Social Security’s existing long-term funding gap.”
CRFB added that while faster growth can reduce Social Security’s shortfall, based on available analyses and understanding the effects of President Trump’s agenda on the national debt, it is unlikely his plans would significantly boost the size of the economy, and many estimates find his plans would reduce long-term output.
Upon insolvency, the law calls for limiting Social Security spending to its revenue stream, which as previously mentioned would mean a $16,500 cut in annual benefits for a typical dual-income couple retiring in 2033. CBO estimates that benefits would have to be cut by 23% by 2035 under current law.
CRFB said Vice President Kamala Harris’s stated campaign plans “would not have large effects on Social Security trust fund solvency.” It added, however, that while both the Trump and Harris campaigns have pledged to protect Social Security, neither campaign has specified how they would fix the looming shortfall in funding.
SEE ALSO:
• Trump vs. Harris: How Winner May Impact Taxes, National Debt
• Where the Candidates Stand on Social Security
• Trump Calls for Elimination of Social Security Tax
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
