Less than a month ago, the midterm elections in the United States came to an end. But as one election season ends, another begins, with future presidential candidates set their eyes on the Oval Office in November 2024. One of those candidates is former President Donald Trump.
Trump, the 45th president of the United States, who lost to Joe Biden in the November 2020 election, announced on November 15 his bid for re-election to the nation’s highest office. Although voters a long rather than deciding who will be the two leading candidates for the 2024 election, Trump’s previous victory in 2016, as well as his base, gives him a good shot at winning the Republican nomination.
Whoever wins the presidency in 2024 will be tasked with tackling the current $20.4 trillion cash shortfall for America’s most important retirement program, Social Security, through 2096. In other words, tough decisions will eventually have to be made.
The $64,000 question is: If Donald Trump is re-elected, would Social Security cuts be on the table?
Trump’s Social Security solutions have appeared all over the map
The first thing to understand about the former president’s Social Security plan is that he never really had one while in office. At no point during his term in office did Trump create a specific plan to strengthen Social Security beyond mitigating some perceived inefficiencies with the Disability Insurance Trust Fund, as outlined in presidential budget proposals.
But if you look back to the turn of the century, you’d find a number of Social Security proposals from former President Donald Trump dotted all over the map.
For example in his book The America we deserve, which was published in 2000, Trump advocated a one-time 14.25% tax on the wealthy to pay off the U.S. national debt and a portion of what would have been interest payments to pay off this debt in Social Security. Specifically, Trump proposed applying this tax to individuals with a net worth of more than $10 million, then funneling $100 billion each year into Social Security for a decade to bolster it.
In addition, Trump advocated a partial privatization of Social Security The America we deserve. Privatization would allow individuals to determine a portion of how their future retirement benefits would be invested. It was an idea championed by former President George W. Bush, but it ultimately fell flat with lawmakers (even within his own party).
More recently, before being elected president in November 2016, Trump argued that benefit testing could be a smart move. Means testing would use income thresholds to reduce or eliminate benefits altogether. In other words, high earners who are unlikely to depend in any way on Social Security income in retirement would receive reduced benefits, or perhaps none at all.
Rights are on the table
However, it’s important to recognize that just because Donald Trump never produced a concrete plan to deal with the growing long-term Social Security cash deficit, it doesn’t mean there isn’t a possible solution on the table if he is reelected.
In January 2020, during the World Economic Forum, CNBC host Joe Kernan bluntly asked then-President Trump, “Are there ever rights on your plate?” Trump replied, “At some point they will be.”
This statement, coupled with Donald Trump’s lack of a concrete Social Security proposal, would likely mean that any blanket solution to fix Social Security shortcomings would include the Republican Party’s two core proposals.
For starters, most Republican legislators in Congress believe the full retirement age should be gradually raised to 70 — currently that’s 67 for anyone born in 1960 or later. Full retirement age is the age at which a qualifying retired employee can receive 100% of their monthly benefits. Since retirement payouts began in 1940, the full retirement age has increased by two years, while average life expectancy has increased by about 13 years.
Why raise the full retirement age? The simple reason would be to reduce Social Security spending in the long run. Regardless of whether future retirees choose to wait longer to receive their full payout or accept a lower monthly benefit by claiming before full retirement age, their total lifetime payouts from the program would decrease.
The second central Republican proposal would be to switch Social Security’s inflationary measure from the consumer price index for urban wage earners and white-collar workers (CPI-W) to the chained consumer price index. The CPI-W is the measure that helps determine the annual cost of living (COLA).
The Chained CPI differs from the CPI-W in one major way: substitution bias. If the price of a good or service rises, consumers can opt for a comparable good or service at a lower cost. The Chained CPI is responsible for this substitution. Using the Chained CPI would result in an annual COLA that is on average 0.3% lower than using the CPI-W.
This is the most likely outcome for Social Security should Trump be re-elected as president
Now that you’ve taken a closer look at Donald Trump’s Social Security proposals over the years, as well as the Republican Party’s broader plan to address the more than $20 trillion shortfall in Social Security over the next several years, let’s address the question: would Donald Trump reduce Social Security benefits if he is re-elected?
The answer is almost certainly no, and there’s an important reason why.
Addressing Social Security shortcomings will take more than a president signing an executive order. To change Social Security, 60 yes votes are required in the U.S. Senate. To find the last time either party had a supermajority in the Senate, you’d have to go back more than four decades. This means that any legislation that changes Social Security will require bipartisan support in the upper chamber of Congress — and cooperation has been off the menu for both sides when it comes to Social Security for decades.
While Republican lawmakers have resisted raising payroll taxes for high earners, Senate Democrats have disagreed with any effort to raise the full retirement age or lower annual COLAs by switching to the Chained CPI. With neither side willing to meet in the middle and find some form of agreement, all proposed Social Security legislation has stalled.
Unless a supermajority of Republican lawmakers took shape in the U.S. Senate, Trump would likely have no influence over the Social Security program or benefits paid if he is re-elected as president.