Trump vs. Biden: How do they plan to save Social Security as it faces a $22 trillion funding shortfall?
As we near the 60th U.S. presidential election, a survey says ensuring Social Security is financially sound is a top policy priority for the majority of American adults. In fact it is one of those rare issues that an equal proportion of Republicans and Democrats care deeply about, according to Pew Research.
That's because the federal program that supports around 70 million beneficiaries each year is set to run out of funds in the next decade if the government doesn't step in.
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After 2033, Americans will receive around 80% of their full scheduled benefits, according to the 2023 Social Security and Medicare Trustees Report. By 2097, this will drop to 74% of their benefits. The total funding shortfall until 2097 is expected to be $22.4 trillion.
Voters will be looking to the next president to work with Congress and save their retirement plans, and there are several options on the table. For instance, a recently introduced bill leans on high earners to increase funding by only taxing earnings above $250,000.
Between their track records and their current and prior campaign promises, you can start to make sense of what the frontrunners would do if elected.
Trump’s take
Donald Trump has talked a lot about entitlements, but his views have "zigzagged over the years," according to an NBC analysis.
While campaigning in 2016 he vowed not to touch Social Security, but in his fiscal 2021 budget he proposed slashing two disability programs run by the Social Security Administration (SSA) — the Social Security Disability Insurance and Supplemental Security Income (SSI). Congress blocked those proposals.
In his current run, the former president has been speaking quite a bit about Social Security but no clear plan to make it solvent has emerged.
In the primaries, he ran an attack ad on his GOP challenger, Nikki Haley, focusing on her plan to raise the Social Security retirement age as a way to reduce expenses.
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He recently told CNBC that there’s “a lot you can do in terms of entitlements, in terms of cutting.” He didn’t give any specifics, but a Trump campaign spokesman told CNBC he was referring only to “cutting waste and fraud.”
Soon after, Trump told Breitbart News that he would never cut Social Security or Medicare.
Biden’s view
Throughout his term, Biden has not touched Social Security and the official White House website says he "opposes any proposal to cut benefits, as well as proposals to privatize Social Security." However, as a senator he did vote to tax and freeze Social Security benefits, according to The Intercept.
The president wants to extend the program's solvency by getting high earners to pay Social Security taxes on all of their earnings.
In 2024, any earnings above $168,600 are not taxed. This means someone with an annual income of $1 million stopped contributing to the program on March 2 this year, according to the Center for Economic and Policy Research.
Last year, the American Academy of Actuaries said that removing the cap this way would "avoid impacting low-income workers, but it could be a large tax increase on high income workers (and their employers)" and it would cover 78% of the 2034 shortfall.
Biden's press release also mentions he supports "efforts to improve Social Security benefits" and "investments in Social Security Administration (SSA) services."
His proposed $7.3 trillion budget for fiscal year 2025 increases SSA’s funding by 9% to improve customer service at SSA’s field offices, State disability determination services, and teleservice centers for retirees, and for individuals with disabilities, and their families.
Comparing the two
It’s tough to say which candidate has a better plan to solve Social Security's solvency problem. Without a solid plan from Trump, you can’t compare him to Biden.
Right now, there’s not enough information on this to make a real decision. But keep your eye out, as this will be a hot topic for the election.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
