The Social Security Administration is facing a financial crisis that will impact the next U.S. president, whether Kamala Harris or Donald Trump. Currently, 68 million Americans receive Social Security benefits, which support retirees, disabled individuals, and survivors of beneficiaries.
However, the system is under strain due to a growing number of retirees and a shrinking workforce contributing to the program. Over 11,200 Americans turn 65 daily, leading to an increased number of benefit claims. Without intervention, the Social Security trust funds will be depleted by 2033, leaving only 79% of benefits payable.
If the trust fund runs dry in 2033, the average retiree will face a significant reduction in monthly benefits, with cuts averaging $403 from the current monthly payment of $1,920. As a result, Social Security has become a key issue for voters in the upcoming presidential election.
Both candidates, Trump and Harris, have pledged to protect the program, but neither has outlined detailed plans to address the funding shortfall. Experts agree that solving the problem will likely require either benefit cuts, tax increases, or a combination of both, yet neither candidate has discussed these difficult choices openly.
Donald Trump has proposed eliminating federal taxes on Social Security benefits, a plan that has garnered strong support, with 85% of voters favoring the idea. Under current law, retirees pay taxes on up to 85% of their benefits based on income thresholds.
Social Security Faces Imminent Crisis as 2033 Insolvency Looms, Pressuring Next U.S. President to Act
While Trump’s plan could provide immediate financial relief for retirees, it could also push the Social Security trust fund closer to insolvency by over a year. Furthermore, the primary beneficiaries of this tax cut would be higher-income households, and Trump’s broader economic policies, such as tariffs, could result in a net tax increase for retirees.
Kamala Harris has emphasized raising taxes on high-income earners and corporations to stabilize Social Security. Her plan, similar to President Biden’s, involves applying the Social Security payroll tax to incomes over $400,000. This would bolster the program’s finances while keeping most households unaffected, as around 95% to 98% of Americans earn less than this threshold.
Although this strategy could extend the solvency of Social Security and potentially allow for benefit increases, Harris has not yet provided detailed specifics on how her administration would tackle the looming funding crisis.
As the 2033 insolvency date approaches, reform efforts will need to be implemented swiftly. Historically, Social Security reform has exempted individuals over 55 from major changes, but experts like Jason Fichtner suggest that the severity of the current crisis may require modifications that could impact older Americans as well.
With less time to prepare for retirement adjustments, this group could feel the effects of changes more acutely if swift actions are necessary to save the program from insolvency.
Whoever wins the presidential election, addressing Social Security’s financial shortfall will be a difficult and urgent task. Achieving reform will require bipartisan cooperation, as any changes will need 60 votes in the Senate to pass.
As the depletion date nears, delaying action only increases the likelihood of sharper benefit cuts and steeper tax increases. Both parties will need to confront these challenges directly if Social Security is to remain solvent for future generations.
