Trump’s Social Security plan could raise checks now—but cut them later
President Donald Trump is calling for a sweeping change to Social Security—one that could boost retirees’ monthly income immediately but risk long-term benefit cuts for millions. The proposal has sparked debate over whether short-term relief is worth the financial damage it may cause the system.
Trump wants to eliminate taxes on Social Security benefits
On April 29 President Trump renewed his push to eliminate federal taxes on Social Security benefits. While this proposal is popular with older people—especially the half of all beneficiaries who currently pay taxes on their monthly checks—experts warn that removing this revenue stream could accelerate the program’s financial crisis.
Social Security has been partially funded by benefit taxes since 1984. Those taxes now contribute nearly $100 billion annually, helping to cover payments to over 52 million retired workers.
Why this plan matters now
According to the 2024 Social Security Trustees Report, the Old-Age and Survivors Insurance (OASI) Trust Fund will run out of reserve assets by 2033. If nothing changes, beneficiaries could see an automatic 21% cut to monthly checks just eight years from now.
Eliminating taxes on benefits would boost short-term income for many, but it could also widen the funding shortfall. Analysts estimate that ending this tax would strip nearly $944 billion in revenue from Social Security over the next decade.
Who currently pays taxes on benefits?
When Congress approved benefit taxation in the 1980s and 1990s, it affected about 10% of older households. Due to inflation and higher incomes, that number has grown to nearly 50%.
Here’s how the tax applies in 2025:
- Single filers with income over $25,000 pay tax on up to 50% of benefits
- Joint filers with income over $32,000 face the same
- If income exceeds $34,000 (single) or $44,000 (joint), up to 85% of benefits are taxed
Because these thresholds haven’t been adjusted for inflation, more retirees are being pulled into the tax bracket every year.
Trump’s first 100 days: What’s already changed at the SSA?
In addition to the tax proposal, the Trump administration has already implemented multiple changes at the Social Security Administration (SSA) through the Department of Government Efficiency (DOGE):
- SSA staffing reduced by 7,000 to a target of 50,000 employees
- Paper checks eliminated, effective Sept. 30, 2025
- Fraud protection increased through improved phone verification and identity systems
- Overpayment clawback rules changed, increasing monthly withholdings from 10% to 50%
- SSA Commissioner Frank Bisignano nominated
These changes aim to cut costs and modernize operations, but critics warn they may lead to longer wait times and reduced service quality for retirees.
Social Security Fairness Act repeals penalties for 2.2 million retirees
The administration also implemented the Social Security Fairness Act, which repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). This change provides retroactive payments to retired public-sector workers—such as teachers and firefighters—who previously saw their benefits reduced. The SSA has already paid out more than $14.8 billion in retroactive benefits.
The risk of removing benefit taxes
While Trump’s plan would increase take-home income for many older people now, it could fast-track the depletion of Social Security’s trust fund and result in deeper cuts later.
- Trust fund depletion may arrive before 2033 without benefit tax revenue
- Mid- to high-income retirees benefit the most, while low-income older people—those most reliant on Social Security—would see little change
- Legislative hurdles remain high, as repealing the tax would require 60 votes in the Senate
What happens next?
Trump’s proposal to eliminate Social Security benefit taxation remains just that—a proposal. With resistance in Congress and strong warnings from fiscal analysts, the plan may face a steep uphill battle.
In the meantime, current and future retirees should prepare for changes—both good and bad—as Washington weighs how to reform one of America’s most important programs.