Donald Trump’s victory raises long-term questions about Social Security

President-elect Donald Trump’s election victory is likely to have a “significant impact” and raise “questions” about the funding of the Social Security program, experts said Newsweek.

The Republican Trump will become the 47th president after his decisive defeat against the Democrat Kamala Harris on November 5th. Among other things, Trump promised to eliminate taxes on Social Security income, which, according to the Social Security Administration (SSA), is paid by around 40 percent of current recipients.

Under current rules, individuals earning between $25,000 and $34,000 per year are subject to tax on up to 50 percent of their Social Security income. If your income is higher, up to 85 percent of your benefits may be taxable.

While the pledge will put more money in beneficiaries’ pockets in the short term, experts warn it could impact Social Security’s coffers. The SSA’s 2023 trustee report released earlier this year found that the trust funds that support the nation’s largest benefit system for retirees, survivors of deceased workers and the disabled are expected to run out of funds in 2035.

By then, recipients are expected to receive only 79 percent of their full benefits unless Congress takes action to ensure their solvency.

“This Trump victory could have a significant impact on Social Security,” said Cliff Ambrose, founder and wealth manager of Apex Wealth Newsweek. “His proposed tax cuts aimed at reducing payroll taxes could further strain funding for the Social Security Administration, since payroll taxes are a major source of funding for Social Security benefits.”

An October investigation by the Committee for a Responsible Federal Budget (CRFB) found that Trump’s actions—including eliminating taxes on Social Security income and tips, imposing tariffs, and accelerating deportations of undocumented immigrants—would address Social Security’s cash-strapped budget in the coming years October will add $2.3 trillion to the decade, accelerating the program’s insolvency to 2031 – three years earlier than previously forecast.

The think tank estimated that eliminating the income tax on Social Security benefits could result in a revenue loss of about $950 billion for the SSA.

“The so-called experts at the CRFB have been wrong over the years. “President Trump kept his promise to protect Social Security in his first term, and President Trump will continue to strongly protect Social Security in his second term,” Trump campaign national press secretary Karoline Leavitt said Newsweek.

“Without a strategy to replenish or secure funding, these cuts could accelerate the need for reforms such as reducing benefits, adjusting the retirement age or increasing eligibility requirements,” said Benefitbay CEO Brandy Burch Newsweek.

Ambrose agreed that Trump needs to address the looming deficits to avoid cutting welfare: “The outcome of Trump’s proposals would depend largely on whether alternative financing solutions accompany these tax changes.”