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Social Security is still in good shape but faces challenges -- from Trump
https://www.latimes.com/business/story/2025-06-20/social-security-is-still-in-good-shape-but-faces-challenges-from-trumpNO PAYWALL: https://archive.ph/kNAIp
. . .
Trump has consistently promised that he won’t touch Social Security and Medicare, but actions speak louder than words. “Trump’s tariffs and mass deportation program will accelerate the depletion of the trust fund,” Kathleen Romig of the Center on Budget and Policy priorities observed after the release of the trustees’ reports this week. “The Trump administration’s actions are weakening the country’s economic outlook and Social Security’s financial footing.”
Immigration benefits the program in several ways. Because “benefits paid out today are funded from payroll taxes collected from today’s workers,” notes CBPP’s Kiran Rachamallu, “more workers paying into the system benefits the program’s finances.” In the U.S., he writes, “immigrants are more likely to be of working age and have higher rates of labor force participation, compared to U.S.-born individuals.”
The Social Security trustees’ fiscal projections are based on average net immigration of about 1.2 million people per year. Higher immigration will help build the trust fund balances, and immigration lower than that will “increase the funding shortfall.” All told, “the Trump administration’s plans to drastically cut immigration and increase deportations would significantly worsen Social Security’s financial outlook.”
A less uplifting aspect of immigration involves undocumented workers. To get jobs, they often submit false Social Security numbers to employers — so payroll taxes are deducted from their paychecks, but they’re unlikely ever to be able to collect benefits. In 2022, Rachamallu noted, undocumented workers paid about $25.7 billion in Social Security taxes.
Trump’s tariffs, meanwhile, could affect Social Security by generating inflation and slowing the economy. Higher inflation means larger annual cost-of-living increases on benefits, raising the program’s costs. If they provoke a recession, that would weigh further on Social Security’s fiscal condition.
Trump also has talked about eliminating taxes on Social Security benefits. But since at least half of those tax revenues flow directly into Social Security’s reserves, they would need to be replaced somehow. Trump has never stated where the substitute revenues could be found.
Trump has consistently promised that he won’t touch Social Security and Medicare, but actions speak louder than words. “Trump’s tariffs and mass deportation program will accelerate the depletion of the trust fund,” Kathleen Romig of the Center on Budget and Policy priorities observed after the release of the trustees’ reports this week. “The Trump administration’s actions are weakening the country’s economic outlook and Social Security’s financial footing.”
Immigration benefits the program in several ways. Because “benefits paid out today are funded from payroll taxes collected from today’s workers,” notes CBPP’s Kiran Rachamallu, “more workers paying into the system benefits the program’s finances.” In the U.S., he writes, “immigrants are more likely to be of working age and have higher rates of labor force participation, compared to U.S.-born individuals.”
The Social Security trustees’ fiscal projections are based on average net immigration of about 1.2 million people per year. Higher immigration will help build the trust fund balances, and immigration lower than that will “increase the funding shortfall.” All told, “the Trump administration’s plans to drastically cut immigration and increase deportations would significantly worsen Social Security’s financial outlook.”
A less uplifting aspect of immigration involves undocumented workers. To get jobs, they often submit false Social Security numbers to employers — so payroll taxes are deducted from their paychecks, but they’re unlikely ever to be able to collect benefits. In 2022, Rachamallu noted, undocumented workers paid about $25.7 billion in Social Security taxes.
Trump’s tariffs, meanwhile, could affect Social Security by generating inflation and slowing the economy. Higher inflation means larger annual cost-of-living increases on benefits, raising the program’s costs. If they provoke a recession, that would weigh further on Social Security’s fiscal condition.
Trump also has talked about eliminating taxes on Social Security benefits. But since at least half of those tax revenues flow directly into Social Security’s reserves, they would need to be replaced somehow. Trump has never stated where the substitute revenues could be found.
MUCH MORE great information about the state of Social Security at the link: https://archive.ph/kNAIp
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