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Social Security’s Finances Erode Further and Could Spell Benefit Cuts

Greenbeard

Greenbeard

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Not accounting for potential impacts of Trump's tariffs and deportations which may worsen the picture, we're eight years from a 23% cut to benefits.

Social Security’s Finances Erode Further and Could Spell Benefit Cuts
The Social Security program faces a longstanding financing shortfall that, if left unaddressed, would slash millions of retirees’ crucial monthly benefit payments in just eight years.

The deteriorating financial outlook for the retirement program, which supports roughly 61 million Americans, was released in its annual trustees report on Wednesday. It is now expected to run out of money nine months earlier than previously projected, which means benefits could be reduced by 23 percent if Congress does not act to bolster the program.
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Some policy experts say it’s hard to fully project Social Security’s outlook because the latest report doesn’t reflect many of President Trump’s policies, including his tariff and mass deportation plans, which are expected to worsen the program’s deficits. . .

If the administration’s tariffs cause the economy to contract and lead to job losses, that would dampen trust fund revenues because fewer payroll taxes would be flowing to the fund. If tariffs caused price increases, that could lead to a higher cost of living adjustment for Social Security recipients and therefore a bump in benefits. Immigrants, both lawful and otherwise, are generally a net positive to the trust fund. One analysis, from October, projected that Mr. Trump’s proposals would accelerate the trust fund’s insolvency by three years.
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Allan said:
Does this include Trump's commitment to eliminate taxes on Social Security?
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He couldn’t have that done via reconciliation, so the OBBB does this:

Enhanced Deduction for Seniors

Provides a deduction for seniors (age 65 or older) of $4,000 per eligible filer with a modified adjusted gross income that does not exceed $75,000 for single filers ($150,000 for married filing jointly). The senior deduction is available to both itemizers and non- itemizers. The deduction is allowed for tax years 2025 through 2028.
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atr.org

List of Tax Cuts in the Big, Beautiful Bill - Americans for Tax Reform

The One Big Beautiful Bill delivers on President Trump's promise of across the board, pro-growth tax relief for American households and businesses. Below is a list of the tax cuts in the One Big Beautiful Bill passed on Thursday, May 22: Income Tax Cuts: Trump-level Personal Income Tax Brackets Are…
atr.org atr.org
 
Greenbeard said:
Not accounting for potential impacts of Trump's tariffs and deportations which may worsen the picture, we're eight years from a 23% cut to benefits.

Social Security’s Finances Erode Further and Could Spell Benefit Cuts
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I doubt Trump's tariffs have anything to do with this. The Society Security Administration has been projecting this situation for at least a decade or more. Problem basically is fewer people are working and paying FICA payroll taxes, In good years excess FICA was even loaned to the govenment. Unfortunately the huge baby boomer generation which had been the prime FICA payer is now retired and drawing their payments and the smaller generations coming up aren't able to mining SS payments in the current range.
 
ttwtt78640 said:
Telling congress critters they have 5 to 8 years to deal with something is much like saying it’s not yet a priority.
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The Social Security can has been kicked down the road through many administrations. I guess the congress that ends up with the hot potato will feel the need to address it.
 
Bullseye said:
I doubt Trump's tariffs have anything to do with this. The Society Security Administration has been projecting this situation for at least a decade or more. Problem basically is fewer people are working and paying FICA payroll taxes, In good years excess FICA was even loaned to the govenment. Unfortunately the huge baby boomer generation which had been the prime FICA payer is now retired and drawing their payments and the smaller generations coming up aren't able to mining SS payments in the current range.
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Bingo. And let's see what happens when AI starts replacing younger workers.
 
Pretty much what we are seeing is Congress and the Presidents not being willing to fix it. Do you damn jobs and come up with a solution. They will not because they know whichever party does it is going to suffer at the ballot box.
 
dseag2 said:
The Social Security can has been kicked down the road through many administrations. I guess the congress that ends up with the hot potato will feel the need to address it.
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A simple ‘fix’, to prevent exhausting the SS ‘trust me’ fund, would be to increase the SS FICA ‘payroll’ tax rate(s) from 6.2% to 7.75%.

Using liberal math, that’s only a 1.55% tax rate increase. ;)
 
Integrityrespec said:
Get everyone off who shouldn't be on. Raise the SSI tax 1 or 2 %, increase the age by another year. You can't do nothing. Chicken shit Congress has to act of we all are going to regret the inaction of politicians with no guts.
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You can absolutely do nothing. Benefits will adjust downward to reflect the available revenue.
 
ttwtt78640 said:
A simple ‘fix’, to prevent exhausting the SS ‘trust me’ fund, would be to increase the SS FICA ‘payroll’ tax rate(s) from 6.2% to 7.75%.

Using liberal math, that’s only a 1.55% tax rate increase. ;)
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The increase has been needed for some time. Congress suffers from lack of a spine. They only know how to spend. Just get Congress to agree to fix it. Every member of Congress should do the right thing and vote for the FICA tax increase, raise retirement by a year. If they don't it falls on their spineless asses when the system fails. Priority one should be to fix the SSI system, politics be damned.
I agree with the tax increase, have said this for more than 10 years that it's the only answer.
 
Bullseye said:
I doubt Trump's tariffs have anything to do with this. The Society Security Administration has been projecting this situation for at least a decade or more. Problem basically is fewer people are working and paying FICA payroll taxes, In good years excess FICA was even loaned to the govenment. Unfortunately the huge baby boomer generation which had been the prime FICA payer is now retired and drawing their payments and the smaller generations coming up aren't able to mining SS payments in the current range.
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Birth rates have been going down and immigration is one of the few ways to correct that without raising taxes. Given the current climate on immigration, I think Trump's policies will absolutely have an effect.
 
Integrityrespec said:
The increase has been needed for some time. Congress suffers from lack of a spine. They only know how to spend. Just get Congress to agree to fix it. Every member of Congress should do the right thing and vote for the FICA tax increase, raise retirement by a year. If they don't it falls on their spineless asses when the system fails. Priority one should be to fix the SSI system, politics be damned.
I agree with the tax increase, have said this for more than 10 years that it's the only answer.
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With my suggested (25%) SS FICA ‘payroll’ tax rate(s) increase, there’s no need to raise the SS ‘full benefit’ age.
 
exoplanet said:
Birth rates have been going down and immigration is one of the few ways to correct that without raising taxes. Given the current climate on immigration, I think Trump's policies will absolutely have an effect.
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Maybe the correct immigration would help but it would have to be massive to make a difference.
 
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