What would Harris and Trump do about the Social Security shortfall?

Social security is facing a crisis: there is a shortage of funding.

According to the federal government, the program’s trust fund is facing a shortfall that will lead to an automatic reduction in benefits 17% by 2035.

For almost one in five seniors Social Security Benefits provide at least 90% of their income. In polls, most Americans list Social Security as one of the most important issues ”top problem” 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 to address the problem. However, they have proposed different approaches: Harris advocates increasing tax revenues for Medicare and Social Security by increasing contributions from high earners, while Trump — unlike nonpartisan budget experts and fact-checkers — says the problem is caused by illegal immigration . .

Trump would also create tax exemptions that would do that reduce revenues who fund these programs, according to studies by nonpartisan groups such as the Committee for a Responsible Budget. The deficit watchdog published a forecast on Monday that Trump would rise The insolvency of the Social Security trust fund by three years.

“The future of Social Security has not been a major focus in this election, but it should be,” Alex Lawson, executive director of Social Security Works, a left-wing advocacy group focused on retirement benefits, told USA TODAY. take action on social security before 2035 to prevent automatic benefit cuts. The presidential candidates and their parties have very different views on our social security system.”

‘Make millionaires and billionaires pay their fair share’

Social Security and Medicare are financed by specific tax streams, called payroll taxes. The average employee pays 6.2% of his income in payroll taxes, while his employer pays the same amount on his behalf. Self-employed people pay 12.4%.

The Medicare trust fund The money is expected to run out in 2036, according to the 2024 Medicare Board of Trustees report.

When the candidates of the first presidential debate Asked how they would address the deficit, President Joe Biden said he would lift the cap on income taxed for Social Security and Medicare. Since only income under $168,000 is currently taxed, the average worker has − who earns less than $60,000 per year − pays 6.2% of his income, while someone earning $1 million per year pays less than 1%.

Biden proposed applying payroll taxes to income above $400,000 a year, which would keep the trust fund from running out until 2066. according to the Social Security Office of the Chief Actuary. The Platform for the Democratic National Convention also included that proposal.

Harris’s says the campaign website that “She will strengthen Social Security and Medicare in the long run by making millionaires and billionaires pay their fair share of taxes.”

The Harris campaign declined to explain 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 track record of cutting Social Security and Medicare for the millions of Americans who rely on these programs. cuts to Medicare and Social Security while into office and promises to attack them if they are re-elected.”

The Trump campaign says he would not cut Social Security benefits 67 million elderly and disabled Americans receive.

Some advocates of increasing Social Security funding say they are confident Harris will sign a bill that increases payroll taxes on high earners, in part because there is broad popular support. congressional Democrats for such legislation.

“Her entire agenda is a continuation of the Biden-Harris presidency,” Lawson said. “Her position is actually clear because the Democratic position is clear, where she has been with Biden is clear, and what she says on her website is extremely clear and fits with what has been said before.”

What Trump would do about Social Security

Trump has not proposed policies specifically designed to increase the solvency of the Social Security trust fund. He responded to the debate question about the program by arguing – as he has throughout the campaign − that illegal immigration is causing the looming trust fund deficit.

“These millions and millions of people coming in, they’re trying to put them on Social Security,” Trump said during the debate. “(President Biden) will wipe out Social Security. He will wipe out Medicare.”

Fact checkers have called it wrongnoting that anyone in the US illegally is not eligible for 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 because 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 Social Security Administration study found that unauthorized immigrants actually increased the Social Security fund $12 billion per year in 2010 and a Study from 2016 from the pro-immigration group New American Economy found a contribution of $13 billion.

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 path to citizenship for some immigrants who lack legal status.

“Kamala Harris wants to bankrupt the country with free health care for 11 million illegal immigrants and benefits like Social Security and Medicare, diverting resources away from Americans and toward noncitizens who don’t pay into federal relief programs,” said Karoline Leavitt, National press secretary of the Trump campaign. in a statement. “President Trump is calling for the largest deportation program since President Eisenhower to end the financial strain on our healthcare system and ensure our country can continue to care for American citizens who rely on Medicaid, Medicare and Social Security – and not from illegal immigrants.”

More: Donald Trump has promised a ‘mass deportation’. It would cost billions.

Would Trump Cut Social Security Benefits?

In this campaign, Trump has repeatedly promised not to cut Social Security or Medicare benefits.

“As president, I will not cut a dime from Social Security or Medicare.” Trump told the Faith and Freedom Coalition in June.

But Trump has sometimes supported cuts to Social Security and Medicare in the past. As president, he proposed in 2019 There will be $25 billion in cuts to Social Security and $575 billion to Medicare over the next decade. In 2020 he advocated cuts $45 billion from Social Security disability benefits.

Trump seemed to suggest in March that he would cut benefits, when he said: “You can do a lot in terms of rights, in terms of cuts and also in terms of theft and the poor management of rights.” Trump’s campaign said he was only about reducing waste and fraud.

“He said he’s not going to cut benefits and I believe that,” Stephen Moore, a Trump campaign adviser and senior visiting fellow in economics at the Heritage Foundation, a conservative think tank, told USA TODAY.

‘You have to let the economy grow’

Some analyzes suggest that – regardless of his intentions – Trump’s tax plans would be inevitable accelerate the social security deficit and the 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. This tax exemption would therefore reduce revenues an estimated $1.6 trillion to $1.8 trillion until 2035.

More recently, Trump has called for the elimination of taxes on tips and overtime wages. If no payroll tax is levied on that income, payroll tax revenues will decrease.

Exempting overtime from payroll taxes on the employee side would at least reduce revenues for Social Security and Medicare $419.6 billion over ten yearsaccording to the Tax Authorities, and exempting employers would also double the loss of income.

“That would only make the problem worse, perhaps further accelerating and even making the trust’s insolvency sooner,” Watson said. “Then you are looking at the beginning of 2030 or even earlier, in the worst case.”

The Committee for a Responsible Budget added up the Social Security costs of all of Trump’s proposals and found that it would increase the program’s deficit by roughly $2.3 trillion between 2026 and 2035. Benefits should be cut by a third by 2035, the group found. .

Harris has proposed exempting tipped wages only from income taxes, and not from payroll taxes. Trump has placed no such limits on his proposed payroll or overtime tax exemptions, nor has he said whether employers would also be exempt from their side of the payroll tax.

Moore says Trump would avoid cutting Social Security benefits by increasing payroll tax revenue through faster economic growth. He notes that deficit projections assume average annual economic growth of 1.7%, and he argues that the economy will grow more under Trump, thanks to policies such as income tax cuts.

“You have to grow the economy,” Moore said. “What I always say to the (former) president is that if we can just achieve a sustainable level of 3% growth, the problem is solved. You will have enough income.”