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In June 2024, President Donald Trump made a bold promise to his supporters at a campaign rally: “As president, I will not cut one penny from Social Security or Medicare.” He reiterated this commitment in July 2024 on social media, adding, “I will not raise the retirement age by one day.”

Since returning to the White House for a second term, President Trump has kept these promises. However, his administration has introduced changes that could impact the Social Security program. Here’s what retirees need to know about these developments.

Department of Government Efficiency (DOGE) and Social Security Cost Cuts

Department of Government Efficiency (DOGE) Logo

In January 2025, President Trump signed an executive order to create the Department of Government Efficiency (DOGE). Initially tasked with modernizing federal technology and software, DOGE’s scope has expanded to include workforce optimization, cost efficiencies, and deregulation.

As a result, the Social Security Administration (SSA) has reduced its staffing target to 50,000 employees, down from the current 57,000. The agency has also identified cost-saving opportunities in areas like contracts, grants, property, and technology, as well as streamlining printing, travel, and purchase card policies.

These measures are expected to save over $800 million in fiscal 2025. While this is a significant portion of the SSA’s estimated $6.5 billion in administrative spending, it pales in comparison to the $110 billion deficit projected for the same year.

Proposal to End Taxation of Social Security Benefits

Social Security Tax Concept

During his campaign, President Trump vowed to eliminate taxes on Social Security benefits, stating, “Seniors should not pay tax on Social Security.” In February 2025, White House press secretary Karoline Leavitt confirmed that President Trump plans to implement the “largest tax cut in history,” including the removal of taxes on Social Security benefits.

While this proposal has merit, it raises concerns about the long-term sustainability of the Social Security program. The Social Security trust fund is already projected to be depleted by 2035, at which point tax revenue would cover only 83% of scheduled benefits. This could lead to an automatic 17% cut in benefits unless Congress intervenes.

Eliminating taxes on Social Security benefits would exacerbate the problem. According to a budget model from the Penn Wharton School of Business, the program could lose $1.5 trillion in revenue over the next decade if taxes on benefits are removed. This would accelerate the trust fund’s insolvency to 2033, two years earlier than currently anticipated.

Hamza’s Take

As someone who closely follows policy changes impacting retirees, I believe President Trump’s efforts to streamline government efficiency are commendable. However, the proposal to eliminate taxes on Social Security benefits is a double-edged sword. While it would provide immediate relief to seniors, it could also hasten the program’s financial challenges.

Historically, Congress has never allowed the Social Security trust fund to become insolvent, and I suspect lawmakers will find a solution before benefit cuts become necessary. However, removing taxes on benefits would leave Congress with less time to address the funding gap, making the situation more precarious.

FAQs

1. What is the Department of Government Efficiency (DOGE)?

The Department of Government Efficiency (DOGE) is a federal agency created by President Trump in January 2025 to improve productivity, modernize technology, and reduce costs across government programs, including Social Security.

2. How will DOGE impact Social Security?

DOGE has led to cost-cutting measures within the Social Security Administration, including reducing staffing levels and streamlining operations, which are expected to save over $800 million in fiscal 2025.

3. What happens if the Social Security trust fund is depleted?

If the trust fund is depleted, tax revenue will cover only 83% of scheduled benefits, leading to an automatic 17% cut in benefits unless Congress intervenes.

4. How would eliminating taxes on Social Security benefits affect retirees?

While eliminating taxes would provide immediate financial relief to retirees, it could accelerate the depletion of the Social Security trust fund, potentially leading to earlier benefit cuts.

5. What can retirees do to prepare for these changes?

Retirees should stay informed about policy changes, consider adjusting their retirement plans, and explore additional income sources to mitigate potential impacts.