How Would Joe Biden and Donald Trump's Social Security Plans Affect Your Retirement Benefits?
This year's U.S. presidential election will be different from the one held in 2020 -- even with the same candidates representing the two major political parties. No two elections are exactly alike because political and economic dynamics change.
However, some of the same major issues of four years ago remain important in the 2024 election. You can put Social Security near the top of the list. President Joe Biden and presumptive GOP presidential nominee Donald Trump have different ideas about what should be done with the popular federal program. How would Biden and Trump's Social Security plans affect your retirement benefits?
Biden's Social Security position
You won't find a detailed plan for Social Security on President Biden's campaign website. However, his proposed federal budget for fiscal year 2025 provides a pretty good outline of the Social Security changes the president would like.
The only concrete item about Social Security in Biden's proposed budget is to give an additional $1.3 billion to the Social Security Administration (SSA) to improve service delivery to Americans. The budget does, however, include the president's guiding principles for reforming Social Security.
Most importantly, Biden opposes benefit cuts in any way, shape, form, or fashion. This stance encompasses the privatization of Social Security. The president has also made clear in his past public statements that he's against increasing the full retirement age.
Biden's main proposal for keeping Social Security solvent is "asking the highest-income Americans to pay their fair share." He has been adamant about not raising taxes on anyone making less than $400,000. One way to implement this proposal is to make all income of $400,000 or more subject to the payroll tax used to fund Social Security. Then-candidate Biden recommended this approach in his 2020 presidential campaign.
The president also wants to "improve Social Security benefits" with a special focus on "those who face the greatest challenges making ends meet." Although no details were included for this in his proposed budget, in the past Biden has called for some benefit increases, such as a guaranteed minimum benefit equal to at least 125% of the federal poverty level. He also proposed in the 2020 campaign to increase benefits by 5% for anyone who has received benefits for 20 years or more.
Trump's Social Security position
Former President Trump's 2024 campaign website mentions Social Security but only briefly. There's one sentence on the site that says that he "will always protect Medicare, Social Security, and patients with pre-existing conditions."
To assess Trump's position on Social Security, we must turn to his public comments. For the most part, he has expressed opposition to any changes to Social Security. During a Fox News town hall in December 2023, Trump stated, "You don't have to touch Social Security." He wants to use the U.S. oil supply to help fund Social Security along the same lines that Saudi Arabia uses its oil wealth to fund public programs.
Trump seems to reject the idea of increasing the full retirement age. He criticized former U.N. Ambassador and South Carolina Governor Nikki Haley during the recent GOP presidential nomination campaign for her proposal to raise the retirement age for younger Americans.
In a recent interview with CNBC, Trump was asked by Squawk Box host Joe Kernen if he had changed his views on how to handle entitlements such as Social Security, Medicare, and Medicaid. He replied, "So first of all, 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 former president's comments seemed to imply that he was open to Social Security cuts. However, he later clarified in an interview with Breitbart News, "I will never do anything that will jeopardize or hurt Social Security or Medicare."
How would these plans affect your retirement benefits?
Neither Biden's nor Trump's Social Security plans would affect the retirement benefits for most Americans -- at least not over the near term. The most needy individuals could receive more benefits if Biden's previous proposals were implemented.
However, if no changes are made to bolster Social Security, the program's combined trust funds will run out of money by 2033 according to the nonpartisan Congressional Budget Office. This would lead to a 25% benefit cut in 2034.
No major Social Security reforms were passed during Trump's prior term as president or during Biden's current term. Regardless of who wins in November, another four years of doing nothing could make implementing the changes needed to preserve the program's solvency more painful.
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How Would Joe Biden and Donald Trump's Social Security Plans Affect Your Retirement Benefits? was originally published by The Motley Fool
