Not only has President Donald Trump broken his promise on Social Security, he may have accelerated the program’s path to insolvency

For most retirees, Social Security offers more than just a check. A quarter century of annual Gallup surveys shows that 80 to 90 percent of retirees rely, to some extent, on this Social Security income to make ends meet.

But this legendary program is not based on the best financial foundations. America’s main retirement program projects a $29.3 trillion funding gap through 2100, according to the Social Security Board of Trustees’ 2026 report. The trustees’ report has warned of an unfunded long-term liability every year since 1985.

Additionally, the Trustees’ latest report estimates that the Old-Age and Survivors Insurance (AVS) Trust Fund will exhaust its asset reserves — excess revenue collected since its inception and invested in interest-bearing special issues, as required by law — by the fourth quarter of 2032. Although Social Security will not go bankrupt, the current payment schedule, including annual cost-of-living adjustments, appears unsustainable and may require cuts radical changes in benefits in six years. years.

Image source: Official White House photo.

Despite these challenges, President Donald Trump campaigned (for his second non-consecutive term) on ending the taxation of Social Security benefits. stop this very unpopular This tax would allow retirees to keep more of their monthly payment.

Even though the president’s promise looked great on paper, he ultimately failed to keep his promise. Worse still, his landmark tax and spending law, the “Big, Beautiful Bill,” appears to have accelerated AVS’s path to insolvency.

Donald Trump Failed to End Taxation of Social Security Benefits

In late July 2024, just months before the election, then-Republican presidential candidate Donald Trump wrote in all caps on Truth Social: “Seniors should not pay Social Security taxes.”

Although this is not an official policy proposal from candidate Trump, it raises hopes that, if elected, he would end the taxation of benefits.

In 1983, the Social Security trust funds (the AVS and the disability insurance trust fund) were running on steam. Without reforms, the program’s asset reserves would have been depleted in less than a year. This led to the adoption of the Social Security Amendments of 1983, which among other things introduced taxation of benefits.

Starting in 1984, up to 50% of an individual’s benefits could be exposed to the federal income tax rate if their provisional income – adjusted gross income + tax-free interest + half of the benefits – exceeded $25,000 (or $32,000 for a couple filing jointly). A second tax tier was added in 1993, exposing up to 85% of the benefits to federal tax when provisional income exceeded $34,000 for singles or $44,000 for couples filing jointly.

When it was introduced, the benefit tax affected around one in ten older households. But because these provisional income thresholds were never adjusted for inflation, about 50 percent of all elderly households now pay federal taxes on a portion of their Social Security income.

.@POTUS: “In the weeks and months to come, we will pass the largest tax cuts in American history, and that will include no tax on tips, no tax on Social Security, and no tax on overtime. It’s called the big, beautiful bill…” https://t.co/SRwaWoY9gZ

— Rapid Response 47 (@RapidResponse47) April 29, 2025

President Trump claimed that his signature tax and spending law, the Big, Beautiful Bill (signed July 4, 2025), would end the tax on Social Security income – but that is not the case.

The President’s Tax and Spending Act temporarily increases the annual standard deduction for eligible seniors age 65 and over by $6,000 (or $12,000 if filing jointly) between calendar years 2025 and 2028. Although this reduced the federal income tax liability for some retirees, it does not end the taxation of benefits.

Even if President Trump had wanted to end welfare taxation, it would have proven virtually impossible. It would take 60 votes out of 100 in the Senate to change the Social Security law, and neither party has achieved a supermajority in the upper house of Congress since the late 1970s. Ending taxation of benefits is not an issue that would garner bipartisan support.

Long story short, President Trump has failed to keep his promise to end the Social Security tax.

Image source: Getty Images.

Trump’s big, beautiful bill created an unsightly problem for Social Security

In addition to failing to deliver on his campaign promise to end the welfare tax, the president’s Big, Beautiful Bill appears to have dug an even deeper hole for America’s main retirement program.

There is no doubt that certain groups of taxpayers benefit from the Big and Beautiful Bill. He made the Tax Cuts and Jobs Act’s cut in the personal income tax bracket permanent and introduced several temporary tax credits and deductions from 2025 to 2028. In addition to the aforementioned senior citizen deduction, which can provide an enhanced annual deduction, Trump’s tax law introduced the “no tip tax” and “no overtime tax” provisions for eligible workers.

But what the Big and Beautiful Bill gives to taxpayers, it takes away from Social Security.

Between 2025 and 2028, the temporary deductions linked to this law reduce the pool of labor income (wages and salaries, but not investment income) subject to professional withholding tax by 12.4%. Last year, this payroll tax brought in more than 91% of Social Security revenue.

Shortly after President Trump signed the Big, Beautiful Bill, Senator Ron Wyden (D-OR) asked the Social Security Administration (SSA) to provide a 10-year projection of how it would affect the program. In early August 2025, the SSA’s Office of the Actuary (OACT) published its findings.

OACT estimates that Trump’s Tax and Spend Act will add $168.6 billion in costs to Social Security from 2025 to 2034. Additionally, OACT predicts that the insolvency of the OASI Asset Pool would be shifted by three months, from the first quarter of 2033 to the fourth quarter of 2032. Not surprisingly, the insolvency timeline of the OASI Asset Pool has been shifted from the first quarter of 2033 to the fourth quarter of 2032 in the 2026 Social Security Board Report.

The law that President Trump said would end the taxation of benefits (but did not) accelerates the timetable for sweeping benefit cuts for retired workers and survivors of deceased workers.