Can Trump Solve Social Security’s Major Crisis by 2025?

Both President Joe Biden and President-elect Donald Trump have been able to claim their full Social Security benefits for over ten years. Moreover, during their initial presidential terms, neither made significant strides toward comprehensive Social Security reform.

Yet, Trump might soon have another opportunity to address issues within this vital federal program that affects countless Americans. Will he be able to resolve the most pressing issue facing Social Security by 2025?

Identifying Social Security’s Primary Challenge

First off, it’s important to debunk a widespread myth: Social Security is not on the brink of bankruptcy. For Social Security to be bankrupt, it would mean it can no longer meet its financial commitments, which is not an immediate threat.

However, Social Security does face a significant funding shortfall. Specifically, its two trust funds—the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) funds—are predicted to run dry. According to the 2024 Social Security trustees’ annual report, these combined funds are expected to be depleted by 2035.

What happens when the funds deplete? Initially, Social Security should manage to pay about 83% of the promised benefits, with this percentage possibly falling to 73% by the year 2098.

The program will still manage to disburse reduced payments because it will continue to collect revenue from the Federal Insurance Contributions Act (FICA) taxes. Employees contribute 6.2% of their earnings towards Social Security and an additional 1.45% towards Medicare, with employers matching these contributions. Unfortunately, these taxes alone are insufficient to sustain the full level of promised Social Security benefits.

Does Trump Have a Strategy for Social Security?

Is President-elect Trump prepared to prevent future reductions in Social Security benefits? His response seems ambiguous.

During a town hall in December 2023 hosted by Fox News’ Sean Hannity, Trump was questioned about Social Security. He asserted, “You don’t have to touch Social Security,” and suggested that leveraging the United States’ oil and gas reserves could address many fiscal challenges, including those faced by Social Security.

However, the specifics of how this would work were never fully detailed by his campaign. The 2024 Republican platform mentioned, “Republicans will restore economic stability to ensure the long-term sustainability of Social Security,” yet it lacked concrete details on achieving this.

The nonpartisan Committee for a Responsible Federal Budget analyzed the impact of leasing more federal lands for oil and gas extraction on Social Security. They concluded that dedicating current revenues from these leases would contribute less than 4% toward closing the program’s funding gap, and fully solving Social Security’s financial issues would be unachievable even if all federal lands were opened for drilling.

Complicating Factors

Complicating the issue further, several of Trump’s other proposals might worsen Social Security’s financial health. The Committee for a Responsible Federal Budget estimates that Social Security funds would be exhausted three years sooner than predicted if Trump’s plans to abolish federal taxes on Social Security benefits, including overtime and tips, are enacted. Such measures would decrease the program’s revenue.

Additionally, imposing high tariffs on imports, as proposed by Trump, could lead to increased inflation. This would necessitate higher cost-of-living adjustments (COLAs) for Social Security, thereby increasing the program’s expenditures. Moreover, deporting millions of unauthorized immigrants, as Trump has suggested, would also diminish the pool of taxpayers contributing to Social Security.

In conclusion, it appears highly unlikely that President-elect Trump will resolve the main issues with Social Security by 2025. In fact, his policies could potentially exacerbate them. However, political landscapes are ever-changing and sometimes unpredictable.

In 1972, President Richard Nixon, known for his staunch anti-communist stance, made a historic visit to China. This event prompted the saying, “Only Nixon could go to China.” Perhaps the leader to finally tackle Social Security’s challenges will be one who currently insists on not altering the program.

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