One month ago, the elections in the US came to a close. As one election season ends, another begins, with prospective presidential candidates looking to the Oval Office. Donald Trump is one of the candidates.
The 45th president of the United States, who lost to Joe Biden in the 2020 election, announced his candidacy for a second term. Although voters are a long way from deciding who the two primary candidates will be, Trump's victory in 2016 gives him a good chance to win the Republican nomination.
The former president signed paperwork. The photo was taken by Shealah Craighead.
The next president of the United States will have to tackle a $20.4 trillion cash deficit for America's top retirement program, Social Security, over the course of the next two decades. Hard decisions will have to be made.
Would Social Security benefit cuts be on the table if Donald Trump is re-elected?
While in office, the former president never had a Social Security plan. During his time in office, Trump did not propose a specific plan to strengthen Social Security or reduce the perceived inefficiencies with the Disability Insurance Trust Fund.
If you go back to the beginning of the century, you'll find a lot of Donald Trump's Social Security proposals.
In his book The America We Deserve, which was published in 2000, Trump advocated for a tax on the wealthy to pay off the U.S. national debt. Trump wanted to apply this tax to people with a net worth of more than $10 million and then put the money into Social Security every year for a decade.
Trump made a case for partial privatization of social security. Individuals would be able to decide how their retirement benefits are invested. It was an idea championed by former President George W. Bush, but it didn't pan out.
Testing for benefits might be a smart move according to Trump. Income thresholds would be used to reduce or eliminate benefits. If you're a high earner who won't rely on Social Security income in retirement, you'll get a reduced benefit or nothing at all.
The image came from the same source as the one above.
Even though Donald Trump never laid out a plan to fix Social Security's long-term cash shortfall, it doesn't mean a fix isn't on the table if he's reelected.
At the World Economic Forum, CNBC host Joe Kernan asked President Trump if entitlements were on his plate. At some point they will be.
Donald Trump's lack of a concrete Social Security proposal would likely mean that any broad-stroke solution to resolve Social Security's shortcoming would feature the two core Republican Party proposals.
The full retirement age should be raised to as high as 70 for people who were born in 1960 or later, according to most Republican lawmakers. An eligible retiree can receive 100% of their monthly benefit at the full retirement age. The average life expectancy has increased by 13 years since retired-worker payouts began.
The full retirement age needs to be increased. The reason is to reduce Social Security's outlays over time. The lifetime payouts from the program would decline regardless of whether future retirees choose to wait longer to receive their full payouts or take a reduced monthly benefit.
The Republican proposal would remove Social Security's measure of inflation from the Consumer Price Index for Urban Wage Earners and Clerical Workers. Annual cost-of-living adjustments are determined by the measure of the Consumer Price Index-W.
substitution bias is a big difference between the ChainedCPI and theCPI-W. Consumers may opt for a similar good or service if the price goes up. This substitution is accounted for by the ChainedCPI. It would result in an annual COLA that's less than if the CPI-W were used.
Now that you've had a closer look at Donald Trump's Social Security proposals throughout the years, as well as the broader Republican Party plan to tackle Social Security's greater than $20 trillion deficit over the next years, let's address the question at hand.
There is a key reason why the answer is almost certainly no.
It will take more than a president signing an executive order to fix Social Security. 60 yes votes are needed in the US Senate to amend Social Security. The last time either party had a supermajority in the Senate was more than four decades ago. When it comes to Social Security, cooperation hasn't been on the agenda for either party for decades.
Senate Democrats don't agree with any attempt to raise the full retirement age or lower the annual cost of living allowance by changing to the ChainedCPI. All proposed Social Security legislation has stopped because neither party is willing to compromise.
If a supermajority of Republican lawmakers were to take shape in the U.S. Senate, Trump wouldn't have an impact on the Social Security program.
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