If President Trump’s initial term in office serves as a precedent, his commitment to “not touch Social Security” may not endure for long.
As 2025 commenced, the average monthly Social Security benefit for retired workers stood at $1,975.34. While this figure might seem modest, a larger number of retirees than you might think rely on their Social Security income as the cornerstone of their financial stability.
For the past 23 years, national polling organization Gallup has assessed retirees’ views on the significance of Social Security income for their financial stability. In every survey, 80% to 90% of respondents expressed that it was essential, to some degree, for meeting their expenses.
Despite the need to protect and enhance America’s primary retirement program, the financial condition of Social Security has been in decline for the last 40 years. Reforms are imperative to improve the program’s finances—potentially necessitating President Donald Trump to break his campaign pledge by suggesting cuts to Social Security.
President Donald Trump delivering remarks. Image source: Official White House Photo by Shealah Craighead, courtesy of the National Archives.
Social Security may face major benefit cuts in just eight years
Before we explore the potential ramifications, it’s crucial to grasp the reasons behind Social Security’s faltering financial structure.
Since the mailing of the first Social Security check in 1940, the Social Security Board of Trustees has provided annual reports that evaluate the program’s financial status. These reports outline revenue sources and illustrate where those funds are allocated.
The long-term (75-year) projections presented by the Trustees regarding the solvency of Social Security’s trust funds are particularly eye-catching. While the program cannot go bankrupt under the current structure, the present payout schedule—including cost-of-living adjustments (COLAs)—could prove unmanageable.
Every year since 1985, the Trustees Report has warned of a long-term funding shortfall. This means that estimated expenses (benefits and, to a lesser degree, administrative costs) will surpass revenues collected over the following 75 years. The 2024 Trustees Report indicated a shocking long-term deficit of $23.2 trillion.
An immediate concern is the projected depletion of the Old-Age and Survivor Insurance Trust Fund’s (OASI) assets by 2033. Should these reserves, accumulated since the program’s inception, be exhausted, retired workers and survivor beneficiaries could face sweeping benefit cuts of up to 21%.
The factors driving this financial crisis for Social Security are a combination of ongoing demographic shifts, including rising income inequality, a historically low U.S. birth rate, and a marked decline in legal net migration rates since 1998.
The OASI’s asset reserves are projected to be depleted by 2033. US Old-Age and Survivors Insurance Trust Fund Assets at End of Year data by YCharts.
Anticipated efficiency-based cuts to Social Security from President Trump
Lawmakers aiming to reinforce Social Security have three options: boost income, reduce expenditures, or adopt a blend of both. However, since any alteration to Social Security typically results in disadvantageous outcomes for some groups, it is often a subject that lawmakers shy away from.
On the campaign trail, then-candidate Donald Trump asserted that he would not modify Social Security, meaning no substantial benefit reductions were on the table, easing the fears of current and future retirees. This implies that any increases to the full retirement age would be ruled out.
Nevertheless, President Trump has not closed the door on the possibility of efficiency-based reductions to Social Security. In a December 2024 interview on Meet the Press, he remarked, “I told people we’re not touching Social Security, other than making it more efficient. But people will receive what they are receiving.”
Throughout Trump’s first four years in office, his budget proposals consistently included various efficiency-oriented cuts to Social Security. Projections suggested that these moves would have cumulatively decreased expenditures:
For instance, Trump’s last budget proposal aimed to streamline the Disability Insurance Trust Fund by halving the duration of retroactive benefits available to disabled workers from 12 months to six months. This would have constituted over half of the projected $24 billion in savings over ten years.
While President Trump may avoid advocating for broad Social Security benefit cuts, indications suggest that he could renege on his promise to “not touch Social Security” by proposing efficiency-related reductions.
Image source: Getty Images.
The hard reality: Efficiency-based reductions will not suffice
Although the Trump administration’s initiatives to reduce government waste and enhance the efficiency of particular programs are commendable in some aspects, the proposed budget changes regarding Social Security during his first term would have barely made a dent in the program’s expanding cash shortfall.
The harsh reality is that fortifying Social Security will demand bipartisan collaboration and difficult decisions.
On social media platforms, commentators often advocate for removing the earnings tax cap as a solution to bolster Social Security. As of 2025, all earned income (wages and salaries, excluding investment income) between $0.01 and $176,100 is subject to a 12.4% payroll tax, the main funding source for Social Security. Any income exceeding this cap is exempt from the payroll tax.
A study from the Social Security Administration’s Office of the Actuary suggested that eliminating the payroll tax ceiling and subjecting all earned income to this tax could extend the trust funds’ solvency by “around 35 years.” While this approach would postpone the issue decades into the future, taxing all earned income alone does not fully address Social Security’s long-term funding shortfall.
Another prevalent suggestion involves gradually raising the full retirement age from 67 to potentially 69 or 70. This would require future retirees to wait longer for their full monthly benefits or accept a steeper reduction in their payouts if they choose to claim early. Regardless of their claiming age, retirees would see reduced lifetime income.
Although this strategy might effectively lower Social Security’s expenditures over many years, it does nothing to mitigate the anticipated depletion of the OASI’s asset reserves by 2033.
While Democrats often push for increased taxation on the wealthy and Republicans seek to reduce long-term expenditures, these unilateral strategies would not appropriately address the dilemma. The only way to sustain the current payout structure, which includes COLAs, is through bipartisan cooperation.
