The report, released Tuesday, found that the Social Security Old-Age and Survivors Insurance Trust Fund is expected to run dry by late 2032. The fund supports monthly payments to senior citizens and their dependents, as well as to survivors of deceased workers. Medicare Part A, or its Hospital Insurance trust fund, is also expected to be depleted within years. Social Security and Medicare Part A are funded through dedicated payroll taxes and taxes on benefits. That means the programs will not run out of money entirely, but monthly benefits would have to be paid from ongoing revenue once the trust funds are depleted.
Social Security and Medicare have long faced financial strain driven by the country’s aging population, but the report suggests that the trust funds are likely to be exhausted sooner than previously forecast. The trustees pointed to Trump’s One Big Beautiful Bill Act, which was signed into law on July 4 last year, as one reason for the projected accelerated depletion. The law made permanent lower federal income tax rates, originally created by Trump’s 2017 tax reforms, and created a new enhanced deduction for senior citizens. The result is less revenue for Social Security and Medicare trust funds.
“This is the first Social Security trustees report that begins to take Donald Trump’s second term policies into account: A tax bill that largely benefited the wealthy, economy-wrecking tariffs, a needless war with Iran, and hostility to immigrants,” Nancy Altman, the president of political advocacy group Social Security Works, said in a statement. “All of these have reduced the amount of money going into Social Security, weakening the system’s finances.”
Advocates have argued the report’s projections could even be conservative. The report lowered the projected levels of temporary or unlawful immigrants but kept its assumptions for lawful immigration broadly in line with levels during the Biden Administration, though critics have argued that lawful immigration levels to the U.S. may also fall as a result of the Trump Administration’s anti-immigration policies.
Without the retirement trust fund, only 78% of benefits will continue to be covered by payroll tax revenue and other income sources, which would mean automatic cuts to benefits, according to the report.
Medicare Part B, which covers doctor visits, outpatient and preventive care, medical equipment, and mental health services, and Part D, which covers prescription medications and certain vaccines, are not affected as they are funded by beneficiary premiums and federal government contributions.
Can this be prevented?
Congress has made some of these changes in the past. In 1983, lawmakers enacted a bipartisan package that increased payroll taxes, gradually raised the retirement age, and subjected a portion of Social Security benefits to income taxes, in order to extend the program’s solvency.
Advocates have also urged lawmakers to oppose changes that could weaken Social Security after Republican House Speaker Mike Johnson signaled on Monday that Republicans plan to pursue changes to public healthcare and Social Security programs next year.
Treasury Secretary Scott Bessent has also suggested that the Administration’s “Trump accounts”—tax-deferred investment accounts—could act as a “backdoor for privatizing Social Security.” (Bessent later clarified in a post on X that the accounts “will supplement the sanctity of Social Security’s guaranteed payments,” and not replace them.)
“Congress has only two options to address the projected shortfall: Bring more money into Social Security, or cut benefits,” Altman, the advocate, said. “Any politician who refuses to raise revenue, including by making the wealthy pay their fair share into Social Security, is telling us that they support benefit cuts.”
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