Less than a month ago, the midterm elections ended in the United States. But as one election season ends, another begins, and the presidential candidate will set his sights on the Oval Office in his November 2024. His one such candidate is former President Donald Trump.
Trump, the 45th president of the United States, who lost to Joe Biden in the November 2020 election, announced his bid to be re-elected to America’s top office on November 15.voters it’s long Trump’s previous victory in 2016 and his base of support give him a good chance of winning the Republican nomination before deciding the two leading candidates in the 2024 election.
Former President Trump signs a document. Image Source: Official White House photo by Shealah Craighead.
Whoever wins the 2024 presidential election will be tasked with addressing the current $20.4 trillion cash shortfall in Social Security, America’s top retirement program, by 2096.
The $64,000 question is: If Donald Trump is re-elected, would a cut in Social Security benefits be on the table?
Trump’s Social Security solutions are everywhere
The first thing to understand about the former president’s Social Security system is that he didn’t actually have one during his tenure. Aside from cutting some perceived inefficiencies in the Disability Insurance Trust Fund, as set out in the presidential budget, Trump will continue to invest heavily in strengthening Social Security during his presidency. I never presented a concrete plan.
But if you look back at the beginning of the century, you can see all around the social security proposals put forward by former President Donald Trump.
For example, in his book the america we deservepublished in 2000, Trump proposed a one-time tax of 14.25% on the wealthy to pay off U.S. government bonds and funnel a portion of the interest to pay this debt back to Social Security. Specifically, Trump proposed applying this tax to individuals with net worths greater than $10 million and pouring $100 billion into Social Security each year for 10 years to strengthen it. did.
Additionally, Trump advocated partial privatization of Social Security. the america we deservePrivatization gives individuals control over some of how their future retirements are invested. This was an idea championed by former President George W. Bush, but ultimately fell through with lawmakers (even within his party).
Most recently, before he was elected president in November 2016, Trump thought that testing benefits could be a smart move. Means tests use income thresholds to reduce or eliminate benefits entirely. In other words, high-income earners who are less likely to depend on some form of Social Security income in retirement may receive reduced benefits or none at all.
Image Source: Getty Images.
Eligibility under consideration
However, just because Donald Trump hasn’t put forward a concrete plan to address Social Security’s long-term cash shortage doesn’t mean there won’t be a potential fix on the table if he’s re-elected. It is important to recognize that no
In January 2020, at the World Economic Forum, CNBC host Joe Kernan bluntly asked then-President Trump, “Are rights ever on your plate?” Mr Trump replied, “Someday it will.”
This statement, coupled with Donald Trump’s lack of concrete Social Security proposals, suggests that a broad-based solution to addressing Social Security’s shortcomings is likely to feature two core Republican proposals.
First of all, most Republicans in Congress believe the full retirement age should be gradually raised to 70. Currently, the retirement age for those born after 1960 is 67. Full Retirement Age is the age at which an eligible retired worker can receive her 100% of her monthly benefits. Since retirement benefits began in 1940, the age of full retirement has increased by two years, and life expectancy has increased by about 13 years.
Why raise the full retirement age? The simple reason is to cut social security spending in the long term. regardless of whether future retirees choose to wait longer to receive full payouts or accept reduced monthly benefits by claiming before full retirement age. Total lifetime payments from are reduced.
The second major Republican proposal is to switch the Social Security inflation indicator from the Consumer Price Index (CPI-W) for urban wage earners and office workers to the Chained Consumer Price Index. CPI-W is a metric that helps determine your annual cost of living adjustment (COLA).
Chained CPI differs from CPI-W in one major way. It’s substitution bias. As the price of goods and services rises, consumers may choose similar goods and services at lower costs. Chained CPI describes this alternative. Using Chained CPI yields an average of 0.3% lower annual COLA than using CPI-W.
Here are the most likely outcomes for Social Security if Trump is re-elected as president
Now that we’ve taken a closer look at Donald Trump’s Social Security proposals over the years and the Republican Party’s broader plan to tackle Social Security’s more than $20 trillion deficit in the next few years, let’s tackle the issue at hand. Will Trump cut Social Security benefits if re-elected?
The answer is almost certainly no, and there are main reasons for that.
It is not enough for the President to sign an executive order to address the shortcomings of Social Security. To amend Social Security, he needs 60 affirmative votes in the U.S. Senate. To know the last time any party had a majority in the Senate, we have to go back more than 40 years. This means that any law that modifies Social Security will require bipartisan support in the Senate of Congress.
While Republicans have opposed raising payroll taxes on high earners, Senate Democrats have opposed attempts to raise the age of full retirement or lower the annual COLA by switching to a chained CPI. there is All of the proposed Social Security bills have stalled because neither party would meet along the way to find common ground.
Unless a Republican supermajority forms in the Senate, Trump’s re-election probably won’t affect the Social Security program or benefits paid.
