Major Social Security Cuts Loom, Partly Attributed to Trump’s Policies
The financial outlook for Social Security is becoming increasingly uncertain, and recent policies have contributed to its precarious state. The 90th anniversary of the Social Security Act in August 2025 saw the average monthly retirement benefit exceed $2,000 for the first time. The new average monthly check stands at $2,071.30. This amount, while vital for many retirees, is insufficient to cover rising living expenses.
According to Gallup, between 80% to 90% of retirees depend on their Social Security income for at least part of their expenses. Ensuring the sustainability of Social Security is critical for lawmakers. However, analyses indicate that the program’s financial foundation is increasingly fragile, with contributions from President Donald Trump’s policies being a contributing factor.
Projections for Social Security Benefits
Each year since its inception in 1940, the Social Security Board of Trustees has published a report on the program’s financial health. As of mid-2025, the Trustees Report disclosed that Social Security faces a staggering $25.1 trillion in unfunded obligations over the next 75 years. While the program cannot declare bankruptcy, there are growing concerns about the sustainability of benefit payouts.
The Old-Age and Survivors Insurance trust fund (OASI), which supports around 53.6 million retirees, is projected to exhaust its reserves by 2033. Without these reserves, future payouts may face a harsh reality, potentially requiring a 23% reduction in benefits by that year to meet obligations through 2099.
Impact of Trump’s Tax and Spending Law
Trump’s signature tax and spending legislation, often referred to as the “big, beautiful bill,” has compoundingly affected Social Security’s viability. Although the legislation aimed to eliminate taxes on benefits for certain seniors, it ultimately fell short of bipartisan support needed for amending the Social Security Act.
The bill did offer some tax breaks, including a $6,000 increase in the standard tax deduction for eligible seniors. Nevertheless, these changes will likely diminish Social Security’s incoming funds through 2028. Estimates from the Social Security Administration indicate an anticipated cost increase of $168.6 billion for the OASI and Disability Insurance trust fund from 2025 to 2034, with the expected reserves depletion advancing to late 2032.
Demographic Challenges Facing Social Security
Although Trump’s policy has contributed to the program’s challenges, larger demographic shifts pose a substantial risk to Social Security. The U.S. fertility rate recently hit a record low, with fewer than 1.6 children born per woman in 2024, far below the 2.1 required for replacement. This demographic trend threatens the worker-to-beneficiary ratio future retirees rely on.
Moreover, a decline in legal immigration since the 1990s has further strained Social Security’s income sources. As younger immigrants typically contribute to the workforce for many years, fewer newcomers result in decreased payroll tax revenues. Additionally, income inequality exacerbates these challenges. In 1983, 90% of earned income fell under payroll tax; by 2024, this figure had dropped to approximately 83%. This trend indicates that many higher earners are evading the payroll tax, leading to potential shortfalls for the program.
Addressing these demographic shifts presents a formidable challenge for ensuring the future strength of Social Security. As debates continue, stakeholders must find sustainable solutions to protect this essential program for future generations.
