Trump’s federal hiring freeze may impact Social Security benefits — what it means for the next retiree ‘raise’

Despite being the leader of the government, President Donald Trump doesn’t have a very high opinion of government work, or federal employees. In fact, when President Trump took office, he let the Department of Government Efficiency (DOGE) run wild, shutting down departments and slashing staff.

The president has also put a freeze on hiring new civilians to fill federal positions. The hiring freeze was first put into effect Jan. 20, 2025, right after Trump took office. It’s been extended multiple times, though, and will now remain in effect until the start of the fiscal year 2026.

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While failing to hire any new federal workers has all sorts of consequences, one of the biggest issues — and one many people may not be paying attention to — is how it could impact Social Security beneficiaries.

Why did Trump put a hiring freeze in place?

President Trump signed the executive order stating, “By the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby order a freeze on the hiring of Federal civilian employees, to be applied throughout the executive branch.”

The administration cited a number of reasons for the actions, including:

• Making the government more fiscally responsible

• Shrinking the federal government to avoid bureaucracy

• Prioritizing private sector job growth over the growth of government jobs

• Draining the “swamp” and ending ineffective programs

The president did make clear that the order should not adversely impact Social Security. However, there are downstream effects that can make it harder for seniors to get the full benefits they deserve in 2026.

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How will this affect Social Security beneficiaries?

Social Security retirees could be adversely impacted by President Trump’s hiring freeze because the inability to hire new workers could impact the Cost of Living Adjustment (COLA).

In most years, retirees receive a COLA to help ensure their buying power doesn’t decline over time as the price of goods and services increase. COLAs are calculated using a specific formula.

Adjustments take into consideration changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). When the third quarter CPI-W data shows that the price of the basket of goods and services have gone up, retirees get a raise equal to the average percentage increase during the third quarter.

However, the Bureau of Labor Statistics (BLS) uses enumerators to check how much things cost each month. Enumerators provide this data to statisticians, who put the consumer price index together. Unfortunately, the Wall Street Journal has reported that economists are warning the government may not be able to hire enough enumerators, which would mean that BLS statisticians are left making more guesses as to price increases rather than using accurate data.

We are in the middle of the critical third quarter, and with BLS making clear that this guesswork is going to continue until the hiring freeze is lifted, there is a very real chance inflation won’t be measured incorrectly and retirees will not get the COLAs — or raises — they deserve.

This is a de facto benefits cut, because beneficiaries would lose buying power relative to the cost of goods and services.

This is not the only way that the Trump administration has impacted Social Security either.

The administration has cut staff at the Social Security Administration and made it harder for people to get in-person customer service support. It is being more aggressive at collecting overpayments. It is imposing new requirements on claiming benefits in the name of fighting fraud, and also moving towards ending paper checks.

All of these moves will impact those collecting benefits and, in many ways, could make their lives harder.

What can retirees do to deal with the hiring freeze?

Retirees can’t do much about the fact BLS data that determines their raises may not be accurate. However, they can budget more carefully in case their COLA ends up not keeping pace with inflation.

There are already serious issues with the raise seniors get, with The Senior Citizens League estimating benefits have lost 20% of buying power since 2010. Retirees may have to adjust by purchasing less expensive items, such as switching to more meatless meals or opting for generic products, if this trend continues — and their benefits don’t stretch as far.

When new checks start coming in 2026, retirees can keep tabs on spending, see how far their funds are going and make any budget adjustments necessary at that time to keep their spending within the fixed income they have coming in.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.