Topline
Former President Donald Trump has publicly vowed not to cut Social Security and Medicare, but experts warn his policy proposals—including a tax cut on Social Security payments—could make the programs run out of cash, with a new analysis released Monday projecting Trump’s policy agenda would deplete Social Security’s funds sooner than expected, in just six years.
Key Facts
Trump and the Republican Party have publicly committed not to cut Social Security or Medicare if Trump wins the White House, with the GOP’s platform stating the party will “fight for and protect Social Security and Medicare with no cuts, including no changes to the retirement age.”
Democrats have seized on comments Trump made in March, however, when the ex-president suggested he was open to cutting Social Security and Medicare, telling CNBC, “There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements.”
Trump’s campaign argued the ex-president did not mean to insinuate he wanted to cut entitlement programs, with spokesperson Karoline Leavitt telling CNN he was “clearly talking about cutting waste, not entitlements” and saying Trump “will continue to strongly protect Social Security and Medicare in his second term.”
Trump has proposed eliminating the tax on Social Security benefits that many seniors pay, as under current tax rules, Social Security recipients are taxed on a certain percentage of their benefits, which varies based on income.
Social Security is already expected to become insolvent by 2034, and tax experts have broadly criticized Trump’s proposal because they believe it will speed that timeline up further, with the nonpartisan Committee for a Responsible Federal Budget projecting that exempting taxes on benefits would result in Social Security and Medicare receiving $1.6 trillion less in revenue between 2026 and 2035 than if the current rules stayed in place, causing Social Security to become insolvent in 2032, followed by Medicare in 2030—one and six years sooner than currently projected, respectively.
Coupling that exemption with other Trump proposals would make Social Security run out of cash even quicker, the CRFB projected Monday, predicting Trump’s agenda overall—including ending taxes on tips and overtime, hiking tariffs and deporting undocumented immigrants—would add approximately $2.3 trillion to Social Security’s deficit and cause the program to become insolvent by fiscal year 2031.
Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you’ll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.
Chief Critic
“The so-called experts at CRFB have been consistently wrong throughout the years,” Leavitt said in a statement to Forbes Monday, claiming Trump “will continue to strongly protect Social Security in his second term” and Vice President Kamala Harris is “the only candidate who poses a threat to the solvency of Social Security.”
Surprising Fact
In addition to draining the U.S.’s Social Security and Medicare funds more quickly, tax experts project Trump’s proposed tax cut on Social Security would not provide that much benefit to middle-class Americans. Social Security recipients who earn between $32,000 and $60,000 annually would only save approximately $90 in taxes, according to the Urban Institute and Brookings Institution’s Tax Policy Center, while the 1% of earners who make $5 million or more would receive $2,500. The lowest-income Americans who earn less than $32,000 already aren’t taxed on their Social Security benefits, so they wouldn’t see a change.
How Does Immigration Impact Social Security?
Leavitt claimed to Forbes that Harris’ agenda threatens Social Security because if undocumented immigrants are “allowed to stay,” that will “cause Social Security to buckle and collapse.” CFRB and other experts say the opposite is true, however, and it’s Trump’s plan for mass deportations that would actually hurt the entitlement program. Undocumented immigrants who are employed in salaried U.S. jobs pay into Social Security even though they won’t actually receive any money from it, ultimately bolstering the program’s coffers more than U.S. citizens who take money from Social Security do. If those migrants are all deported, as Trump has proposed, that means Social Security would lose out on all the money they’re now contributing, worsening its financial issues. The office of the Social Security Administration’s chief actuary estimated in 2013 that undocumented immigrants contributed approximately $12 billion to Social Security in 2010, and CFRB’s projection estimates that Trump’s deportation and tariff plans would together cost Social Security anywhere between $300 billion and $750 billion between fiscal years 2026 and 2035.
What Does Kamala Harris Say About Social Security?
Harris has not yet unveiled a specific proposal involving Social Security, but she has championed the program as vice president and the Biden administration has supported it without proposing any cuts. She also co-sponsored legislation in the Senate that would expand Social Security, including by increasing benefits for some beneficiaries, changing how cost-of-living adjustments are calculated and allowing some dependents to receive benefits while they’re full-time students through age 22. The legislation would also raise more money for Social Security by expanding the payroll tax to higher incomes. It’s unclear if Harris supports those same policies in her presidential campaign, however, and she did not address Social Security in a speech Friday about her economic policy agenda.
What About Project 2025?
Harris and other Democrats have pointed to Project 2025 to suggest Trump would cut Social Security and Medicare if elected. The document, a 900-page policy agenda spearheaded by the Heritage Foundation and other right-wing groups, proposes a total overhaul of the executive branch by the next conservative administration. “Just look at his Project 2025 agenda,” Harris said in a speech that was also shared online by her campaign. “If he is elected, Donald Trump … intends to cut Social Security and Medicare.” Project 2025 does not explicitly call for fully cutting Social Security or Medicare, though it does propose reforms to Medicare that include making Medicare Advantage, a paid supplement to Medicare, the “default enrollment option.” Trump and his campaign have publicly disavowed any connection to Project 2025—though he does have links to the Heritage Foundation and has praised its work in the past—and he would not be under any obligation to follow its policy agenda if elected.
Tangent
Trump’s vice presidential candidate Sen. JD Vance, R-Ohio, told The New York Times before he was named as Trump’s running mate that he supports raising money for Social Security through a combination of getting more men back into the workforce, increasing wages and increasing tariffs. Through that, he claimed, “I think that you buy yourself a whole hell of a lot more than the nine or 10 years that the actuaries say that we have.” It’s unclear if Trump shares those views about how to make up any potential funding gap for Social Security, though the ex-president has proposed raising tariffs on imported goods. Tax experts have suggested raising tariffs would not garner a significant amount of government revenue, however, and the amount that is raised would likely be lower than projected, because at least some Americans would stop buying imported goods since they’d be more expensive.
Key Background
The economy has become a central issue in the November election as polls repeatedly show it’s the most important issue to voters, including Social Security. Trump has highlighted his plan to repeal Social Security taxes on the campaign trail, sharing a campaign video on social media Monday that claims the ex-president “will make sure no one cuts Medicare or Social Security.” The left has also ramped up its attacks on Trump over his Social Security views, putting up billboards in Asheville, North Carolina, in August that took aim at Trump over Social Security as he was set to deliver a speech there on the economy. The billboards claimed Trump plans to “slash funding, leave seniors behind, and cut taxes for the ultra-wealthy,” according to The Hill, and coincided with the anniversary of the signing of the Social Security Act in 1935.
What To Know About Kamala Harris’ Economic Agenda As She Announces New Proposals For Black Men (Forbes)
What Would the Trump Campaign Plans Mean for Social Security? (Committee for a Responsible Federal Budget)
Donald Trump’s Suggestion to End Taxation of Social Security Benefits (Committee for a Responsible Federal Budget)
Exempting Social Security Benefits from Income Tax Is Unsound and Fiscally Irresponsible (Tax Foundation)
How Would Donald Trump And Kamala Harris Change Your Taxes? Here’s What To Know. (Forbes)
Read the full article here
