Social Security is facing a crisis: It is running short on funding.
According to the federal government, the program’s trust fund faces a shortfall that will lead to an automatic benefit cut of 17% in 2035.
For nearly one-in-five seniors, Social Security benefits provide at least 90% of their income. In polls, most Americans list Social Security as a ”top issue” that is ”very important ” to them.
Donald Trump and Kamala Harris both say they won’t allow benefits to be cut, but neither has laid out a precise plan for addressing the problem. They have, however, offered different approaches: Harris advocates for increasing tax revenue for Medicare and Social Security by raising the contributions of high earners, while Trump − at odds with nonpartisan budget experts and fact checkers − says that the problem is caused by illegal immigration.
Trump would also create tax exemptions that would reduce the revenues that fund these programs, according to studies by non-partisan groups like the Committee for a Responsible Budget. The deficit watchdog released a projection Monday that Trump would move up the Social Security trust fund’s insolvency by three years.
“Social Security’s future hasn’t been a major focus of this election, but it should be,” Alex Lawson, executive director of Social Security Works, a left-leaning advocacy organization focused on retirement benefits, told USA TODAY. “Congress needs to act on Social Security before 2035 to prevent automatic benefit cuts. The presidential candidates and their parties have very different visions for our Social Security system.”
‘Making millionaires and billionaires pay their fair share’
Social Security and Medicare are funded by dedicated tax streams, called payroll taxes. The typical employee pays 6.2% of their income in payroll taxes, while their employer pays the same amount on their behalf. Self-employed people pay 12.4%.
Medicare’s trust fund is projected to run out of money in 2036, according to the Medicare Board of Trustees’ 2024 report.
When the candidates at the first presidential debate were asked how they’d address the shortfall, President Joe Biden said he would lift the cap on income that is taxed for Social Security and Medicare. Since only income below $168,000 is currently taxed, the average worker − who makes less than $60,000 per year − pays 6.2% of their earnings, while someone making $1 million per year pays less than 1%.
Biden proposed applying payroll taxes to income above $400,000 per year, which would ensure the trust fund doesn’t run out until 2066, according to the Social Security Office of the Chief Actuary. The Democratic National Convention platform included that proposal as well.
Harris’s campaign website says that “She will strengthen Social Security and Medicare for the long haul by making millionaires and billionaires pay their fair share in taxes.”
The Harris campaign declined to elaborate on what exactly those tax changes would be, when asked by USA TODAY.
“Vice President Harris and Governor Walz are fighting to lower costs and will always protect and strengthen Social Security and Medicare,” Harris campaign spokesperson Mia Ehrenberg said in an email. “In stark contrast, Donald Trump has a long record of trying to cut Social Security and Medicare for the millions of Americans who rely on these programs, proposing cuts to Medicare and Social Security while in office and promising to target them if elected again.”
The Trump campaign says he would not cut Social Security benefits, which 67 million elderly and disabled Americans receive.
Some advocates for increasing Social Security funding say they are confident that Harris would sign a bill that raises payroll taxes on high earners, in part because there is widespread support among congressional Democrats for such legislation.
“Her whole agenda is a continuation of the Biden-Harris presidency,” Lawson said. “Her position is actually clear because the Democratic position is clear, where she’s been with Biden is clear, and what she says on her website is extremely clear that it fits with what has been said before.”
What Trump would do about Social Security
Trump has not proposed a policy designed specifically to extend the Social Security trust fund’s solvency. He responded to the debate question about the program by arguing − as he has throughout the campaign − that illegal immigration is causing the trust fund’s impending deficit.
“These millions and millions of people coming in, they’re trying to put them on Social Security,” Trump said at the debate. “(President Biden) will wipe out Social Security. He will wipe out Medicare.”
Fact-checkers have called foul, pointing out that anyone residing in the U.S. illegally is not eligible to receive Social Security or Medicare. But many workers who entered the U.S. without legal status do support the programs by paying taxes.
“Immigration can often help the trust funds, as many still pay taxes into the system without receiving benefits,” Garrett Watson, senior policy analyst at the Tax Foundation, a center-right think tank, told USA TODAY. A study by the Social Security Administration found that unauthorized immigrants actually increased the Social Security Trust fund by $12 billion per year in 2010 and a 2016 study by the pro-immigration group New American Economy found a $13 billion contribution.
The Trump campaign argues that Democrats would provide a path to citizenship − and eligibility for key benefits, including Social Security − for immigrants here illegally. Harris has endorsed a pathway to citizenship for some immigrants who lack legal status.
Would Trump cut Social Security benefits?
In this campaign, Trump has repeatedly pledged not to cut Social Security or Medicare benefits.
“As president, I will not cut one penny from Social Security or Medicare,” Trump told the Faith and Freedom Coalition in June.
But Trump has, at times, backed cuts to Social Security and Medicare in the past. As president, he proposed in 2019 cutting $25 billion from Social Security and $575 billion from Medicare over a decade. In 2020, he advocated for cutting $45 billion from Social Security disability benefits.
Trump seemed to suggest in March that he would cut benefits, when he said, “There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements.” The Trump campaign said he was talking only about cutting waste and fraud.
“He said he’s not going to cut benefits and I believe that,” Stephen Moore, an advisor to the Trump campaign and a senior visiting fellow in economics at the Heritage Foundation, a conservative think tank, told USA TODAY.
‘You need to grow the economy’
Some analyses suggest that − regardless of his intentions − Trump’s tax plans would inevitably hasten the Social Security shortfall and resulting cuts in benefits.
First, Trump proposed exempting Social Security benefits themselves from taxation. Social Security benefits are only taxed to pay into the Social Security trust fund. So that tax exemption would cut revenue by an estimated $1.6 trillion to $1.8 trillion through 2035.
More recently, Trump has called for eliminating taxes on tips and on overtime wages. If that income isn’t subject to payroll taxes, then payroll tax revenues would decrease.
Exempting overtime from employee-side payroll taxes would cut revenues for Social Security and Medicare by at least $419.6 billion over 10 years, according to the Tax Foundation and exempting employers as well would double the revenue loss.
“That would just compound the problem, maybe accelerate the trust insolvency by even more, make it even sooner,” Watson said. “Then you’re looking at the early 2030s or even sooner, in the worst-case scenario.”
The Committee for a Responsible Budget added up the cost to Social Security of all Trump’s proposals and found it would increase the program’s deficit by roughly $2.3 trillion between 2026 and 2035. Benefits would have to be cut by one-third in 2035, the group found.
Harris has proposed exempting tipped wages from only income taxes, not payroll taxes. Trump has not set any such limits on his proposed payroll or overtime tax exemptions or said whether employers would also be exempt from their side of payroll taxes.
Moore says that Trump would avoid cutting Social Security benefits by increasing payroll tax revenues through faster economic growth. He notes the shortfall projections assume a 1.7% average annual economic growth rate, and he argues the economy will grow more under Trump, thanks to policies such as income tax cuts.
“You need to grow the economy,” Moore said. “What I always tell the (former) president is if we can just get to a sustained level of 3% growth, then the problem is solved. You’ll have plenty of revenue.”
