As 2025 started, retired workers received an average monthly Social Security check of $1,975.34. This amount may seem small, yet a significant number of retirees rely on it as a crucial part of their financial support.
For more than two decades, Gallup, a national polling organization, has surveyed retirees about the importance of Social Security to their finances. Consistently, 80% to 90% of respondents indicated that this income is necessary to help meet their expenses.
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While enhancing and safeguarding Social Security should be essential for lawmakers, the program’s finances have been declining for the last 40 years. To improve its financial status, reforms are needed—possibly including President Donald Trump proposing cuts despite his past campaign promises.
President Donald Trump delivering remarks. Image source: Official White House Photo by Shealah Craighead, courtesy of the National Archives.
Possible Benefit Cuts on the Horizon for Social Security
Before exploring potential outcomes, it is critical to understand why Social Security is in financial trouble.
Since issuing the first Social Security check in 1940, the Social Security Board of Trustees has released annual reports detailing the program’s finances, including where its income originates and how it is spent.
The Trustees also provide long-term (75-year) forecasts about the solvency of Social Security’s trust funds. Currently, the program cannot go bankrupt, but its payout structure, especially with cost-of-living adjustments (COLAs), may not stay sustainable.
The Trustees’ Report has warned each year since 1985 of a looming long-term funding shortfall. In straightforward terms, the projected payouts (benefits and administrative costs) will exceed income for the next 75 years. The 2024 Trustees Report estimates this shortfall at an alarming $23.2 trillion.
The more pressing worry is that the Old-Age and Survivor Insurance Trust Fund’s (OASI) reserves could run out by 2033. If the excess cash built since the program began were depleted, retirees and survivor beneficiaries could face benefit cuts of up to 21%.
The main reasons for this financial crisis in Social Security are demographic shifts, rising income inequality, a historically low birth rate in the U.S., and a significant drop in legal net migration since 1998.
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.
Trump Expected to Suggest Efficiency-Driven Cuts to Social Security
Lawmakers aiming to enhance Social Security face three main options: increase income, decrease spending, or seek a combination of both. However, significant changes often mean that some individuals would be negatively affected, making politicians wary of taking action.
Presidential candidates do not have the luxury of avoiding significant issues. They must propose concrete solutions for an ailing program.
Donald Trump, during his campaign, assured voters that he would not make changes to Social Security that would lead to significant benefit cuts. This assurance meant raising the full retirement age was not on the table.
Nonetheless, President Trump has left open the possibility of proposing efficiency-based cuts to Social Security. In a December 2024 interview with Meet the Press, he stated regarding Social Security that, “I said to people we’re not touching Social Security, other than we make it more efficient. But the people are going to get what they’re getting.”
Throughout Trump’s first four years in office, his budget proposals consistently included various efficiency-based cuts to Social Security. These proposals were projected to decrease outlays substantially:
For instance, Trump’s last budget suggested improving the efficiency of the Disability Insurance Trust Fund by reducing retroactive benefits from 12 months to 6 months for workers with disabilities. This measure was expected to account for more than half of the anticipated $24 billion in decade-long savings.
Though Trump is unlikely to propose sweeping benefit reductions, signs indicate he may not adhere to his pledge of “not touching Social Security” by leaning toward efficiency-based cuts.
Image source: Getty Images.
Efficiency Cuts Are Not Enough to Solve the Problem
While efforts to reduce government waste and improve program efficiency are beneficial in general, the Trump administration’s budget proposals concerning Social Security during his initial term would not resolve the widening cash deficit faced by the program.
The stark reality is that fulfilling the needs of Social Security will demand bipartisan collaboration and difficult decisions.
Many social media commentators suggest removing the earnings tax cap to strengthen Social Security. In 2025, all earned income (like wages and salary, excluding investment income) between $0.01 and $176,100 is subject to a 12.4% payroll tax, which funds the program. Income above this cap does not contribute to the payroll tax.
A study from the Social Security Administration’s Office of the Actuary found that completely eliminating the payroll tax ceiling and taxing all earned income would extend the solvency of Social Security’s trust funds by about 35 years. Although this solution would delay addressing the funding issue, it alone cannot fully resolve the program’s long-term shortfall.
Another common suggestion is to gradually raise the full retirement age from 67 to perhaps 69 or 70. This change would require future retirees to wait longer to receive their benefits in full or accept a larger reduction if they claim early. Regardless of the choice made, their lifetime income will be diminished.
This approach may help reduce Social Security’s payments over many years but does not tackle the imminent depletion of the OASI’s reserves by 2033.
While Democrats might seek to increase revenue through taxing the wealthy and Republicans advocate for reductions in long-term expenses, these independent solutions fail to address the overarching problem. The only viable path to sustaining Social Security’s payout structure, including COLAs, for the future demands bipartisan cooperation.
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