Social Security is a critical source of income for most retirees, with 80% to 90% relying on it as a major or minor income source. Despite President Donald Trump’s repeated promises not to cut Social Security, evidence suggests he may break this pledge. The Social Security Board of Trustees has consistently warned of a long-term funding shortfall, with the program’s asset reserves projected to be depleted by 2033, potentially leading to benefit cuts of up to 21%.
While Trump vowed not to cut Social Security benefits, his December interview with Meet the Press revealed a different stance: he plans to make the program more efficient. This includes efficiency-based reforms designed to reduce outlays, which technically breaks his campaign promise. During his first term, Trump proposed budget cuts to Social Security totaling $24 billion to $72 billion over ten years, focusing on administrative cost reductions and modest changes like halving retroactive disability benefits.
However, these efficiency-based cuts are unlikely to address the program’s long-term funding issues. The 2024 Trustees Report estimates a $2.24 trillion gap between costs and collected income over the next decade. Strengthening Social Security will require tough decisions, such as increasing the taxable earnings cap or raising the full retirement age, neither of which is a complete solution. The most effective approach would involve bipartisan cooperation, similar to the 1983 overhaul that extended the program’s solvency by 50 years.
— news from The Motley Fool