A Look into the Future: What Trump Plans for Social Security

Joe Biden and Donald Trump share not only their political prominence but also their eligibility to receive full pension benefits for over a decade. However, during their first terms as President of the United States, significant reforms to social security were lacking. Now, Trump may have a second chance to tackle this challenge. The question is: Can he solve the biggest issue of social security by 2025? Contrary to widespread beliefs, social security is not on the verge of insolvency. While the system's financial reserves are dwindling, bankruptcy is not imminent. Specifically, the trustees predict that the two major trust funds—the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund—will be depleted by 2035. After that, only about 83% of the scheduled benefits can be paid, and by 2098, this figure could drop to 73%. Although ongoing revenues from the Federal Insurance Contributions Act (FICA) tax continue to flow, they are insufficient to fund the full benefits. Employees and employers contribute 6.2% and 1.45% of their wages, respectively, to support social security and Medicare. Yet even these amounts are not enough to avoid future cutbacks. And Trump? In a discussion with Sean Hannity of Fox News in December 2023, Trump stated that it is not necessary to touch social security. He believes that utilizing the U.S.'s oil and gas reserves could solve many financial problems, including the looming insolvency of social security. Whether this approach will indeed achieve the hoped-for sustainable impact remains to be seen.