Many commentators are already discussing the future of social security—and some are sounding the alarm bell—given the election of former President Trump to be the 47th President of the United States.
I do not have a crystal ball, nor a bell to ring, so all I can do is report on the findings of some experts on the topic as well as leading members of Congress who have jurisdiction over the Social Security Trust Fund. Only time will tell how this plays out.
As a group of senior lawyers, of course, we are concerned about the future of social security for ourselves and our clients. After all, millions of Americans rely on social security checks either partly or wholly for income. According to the Social Security Administration (SSA):
“In 2024, an average of almost 68 million Americans per month will receive a Social Security benefit, totaling about $1.5 trillion in benefits paid during the year.”
And, “Social Security is the major source of income for most people over age 65.”
Given the reliance of a large part of the population on Social Security and the commitments made to workers paying into the program their whole working lives, how can we as a country allow the Trust Fund to run out of funds?
The underlying problem, which we certainly recognize, is the population is aging and aging out of work while young people are not entering the workforce in larger numbers and, therefore, not contributing as much to the Social Security trust fund, which comes out of employees’ paychecks and is matched by employers.
“In 1940, the life expectancy of a 65-year-old was almost 14 years; today, it is over 20 years. The number of Americans 65 and older will increase from about 61 million in 2023 to about 77 million by 2035. In 2023, there will be an estimated 2.7 covered workers per Social Security beneficiary. By 2035, the Trustees estimate there will be 2.4 covered workers for each beneficiary.”
Removing undocumented immigrants from payrolls, as the incoming Administration has proposed, may also increase deficits and reduce payments to the Social Security Trust Fund.
The Social Security Board of Trustees—consisting of Janet Yellen, Secretary of the Treasury, Julie A. Su, Acting Secretary of Labor, Xavier Becerra, Secretary of Health and Human Services, and Martin O’Malley, Commissioner of Social Security –issued their annual report to the public on May 7, 2024. In this report, the Trustees found that:
“The Old Age and Survivors Insurance (OASI) Trust Fund [from which Social Security
is paid] will be able to pay 100 percent of total scheduled benefits until 2033,
unchanged from last year’s report. At that time, the fund’s reserves will become
depleted and continuing program income will be sufficient to pay [only] 79 percent
of scheduled benefits.”
The Trustees recommend that lawmakers “have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”
Unfortunately, I did not find the specific options that the Trustees recommend or prefer. The Peter G. Peterson Foundation, a think tank, has identified the following options for consideration: raising the payroll tax rate, increasing the retirement age, and adjusting benefits over time.
What has President Trump said about Social Security? Mainly that he won’t touch it. At the same time, he has proposed eliminating taxes on social security. However, the Speaker of the House, Mike Johnson (R-LA), has already suggested this would have to be offset by other income.
“You have got to do the math. You have got to make sure that these new savings from American people can be paid for and make sure the economy is a pro-growth economy,” Johnson said to Business Insider.
While eliminating taxes on social security payments sounds like a plus for seniors, several experts warn that eliminating these taxes, plus reducing the immigrant workforce, will only lead to future deficits and less payments.
The Committee for a Responsible Budget (CRB) – a bipartisan budget group—is one of those that are sounding the alarm bell for the future of social security.
In their recent report, CRB concludes:
“We find President Trump’s campaign proposals would dramatically worsen Social Security’s finances. 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. Under our central estimate, we find that President Trump’s agenda would:
I am not in a position to assess these findings either critically or objectively. I am just reporting on what some experts are concluding from President-elect Trump’s entire budget proposal.
The Social Security Program is within the jurisdiction of the Senate Finance Committee and the House Ways and Means Committee. Here are some previous remarks from the leaders of these committees in the 119th Congress, which begins in January 2025. For example, Senator Mike Crapo (R-ID), the incoming Chair of the Senate Finance Committee, has stated on his website that:
“Congress must act quickly to protect Social Security and implement needed reforms to make it permanently solvent. We must examine a wide array of proposals to strengthen Social Security and continue to seek methods of improving the Social Security system for those who are now on it and those who will depend on it in the future.”
On the House side, Congressman Jason Smith (R-MO), current and future Chair of the House Ways and Means Committee, has remarked that “protecting Social Security must be bipartisan and must be done the right way.”
These comments are certainly reassuring, but they were made before the Trump Administration submits its FY2025 budget. And before the Elon Musk—Vivek Ramaswamy “Department of Government Efficiency” has made its recommendations to the President and Congress on reining in government spending.
Unless Congress acts in the next few years –hopefully sooner than later –the Trust Fund will be depleted and not be able to pay full benefits to seniors. This itself is a cause for alarm.
In conclusion, the future of Social Security and the solvency of the Trust Fund is in our hands.
Let us do our part to protect it from needless and unforeseen cuts.
