Big changes could be coming to Social Security, depending on which candidate wins in November.
Millions of Americans will head to the polls on Nov. 5 or vote via mail or in person before then. The presidential candidates from the two major parties — Vice President Kamala Harris for the Democrats and former President Donald Trump for the Republicans — offer stark contrasts in nearly every area.
Social Security is no exception. The Democratic and GOP presidential nominees have very different views about what needs to change with the federal program. Here are the three biggest ways Harris’ and Trump’s Social Security plans could affect retirees.
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1. Trump: No taxes on Social Security benefits
On July 31, 2024, Trump posted in all caps on the Truth Social social media platform: “Seniors should not pay tax on Social Security!” Since then, he has repeated the statement in campaign rallies, adding, “And they won’t.”
Not every retiree would be impacted if Trump returned to the White House and could make good on his pledge. Around 40% of people who receive Social Security pay federal income taxes on their benefits, according to the Social Security Administration (SSA).
Would Trump’s plan help you? It depends on how you file your federal income taxes and your combined income (your adjusted gross income plus nontaxable interest plus half of your Social Security benefits). Some retirees must pay federal taxes on up to 50% of their benefits, while others making more money must pay taxes on up to 85% of their benefits.
The idea of exempting Social Security benefits from federal income taxes isn’t a new one. Until 1984, no one had to pay federal taxes on their Social Security benefits.
2. Harris: Different COLA calculation method
Harris has committed to “protect and expand” Social Security but hasn’t provided detailed plans for the program yet. However, as a U.S. senator, she co-sponsored the Social Security Expansion Act.
This legislation proposed some major changes that wouldn’t affect retirees, including increasing the payroll tax cap for high-income workers to increase revenue for Social Security. It also featured expanding retirement benefits for low-income workers.
One big part of the Social Security Expansion Act that would impact every retiree who receives Social Security, though, was the proposal to change how cost-of-living adjustments (COLAs) are calculated. The bill would adopt the Consumer Price Index for the Elderly (CPI-E), which proponents argue more accurately reflects the spending of seniors than the current inflation metric used to determine Social Security COLAs.
The Congressional Research Service performed an analysis to see how using the CPI-E could impact Social Security COLAs. It found that a hypothetical COLA using this metric would have resulted in Social Security increases of the same size or greater in all but six years since 1986.
3. Harris and Trump: The affect when Social Security runs out of money
There’s one common denominator between Harris’ and Trump’s ideas about Social Security: Both would affect when the program runs out of money. The combined Social Security trust fund reserve will be depleted in 2035 if nothing is done, based on the 2024 Social Security Trustee report. But some changes could accelerate this timeline, while others could slow it down.
Currently, federal income taxes paid on Social Security benefits provide around 4% of the program’s financing. The 1984 change to tax benefits was made as part of several major reforms intended to prevent the Social Security trust funds from running out of money.
The Committee for a Responsible Federal Budget (CFRB) estimates that Trump’s proposal to eliminate federal income taxes on Social Security benefits would speed up the insolvency date for Social Security by one year. CFRB also concluded that the change would move up the insolvency date of the Medicare Hospital Insurance Trust Fund by six years to 2030.
What about the alternate COLA calculation method supported by Harris? It would increase Social Security’s costs, too, and therefore cause the program’s combined trust funds to run out of money somewhat sooner. However, increasing the payroll tax cap (which Harris supported as Senator and as Vice President) and other revenue-increasing moves previously supported by Harris would extend the solvency of Social Security for decades.
The political reality
Presidential candidates sometimes make campaign pledges that they can’t fulfill. The political reality is that the president can’t change Social Security unilaterally — both houses of the U.S. Congress must first pass legislation to reform the program.
Whether or not any of the Social Security proposals supported by Harris or Trump ultimately impact retirees, therefore, depends on what members of Congress want to do. The down-ballot races are important for retirees, too.