Social Security Is Teetering, and 3 of President Donald Trump's Policies Are Helping to Push It Over the Edge

Social Security, established in 1940, serves as a critical financial safety net for retired workers. In 2025, the Old-Age and Survivors Insurance trust fund, which disburses monthly benefits, is projected to run out of assets by the end of 2032. This program is primarily funded by a 12.4% payroll tax levied on earned income, which accounts for over 91% of its income.

However, President Donald Trump's policies could exacerbate the program's financial woes. Three of Trump's policies are currently pushing Social Security towards a precipice. The first is the "Big, Beautiful Bill" (BBB), a permanent tax and spending law from Trump's second term. Although it provides temporary tax breaks for some Americans, these deductions reduce the pool of income subject to the payroll tax, thus decreasing Social Security's primary funding source.

The second policy is "Trumpflation," or inflation driven directly by Trump's policies. This has resulted in an unusually high Social Security cost-of-living adjustment (COLA) of 3.6% in 2027, significantly above the average. The high COLA is partly due to Trump's tariff and trade policies, which have increased consumer prices by 2.9 percentage points since 2025, leading to a direct increase in goods prices.

The third policy is the ongoing Iran war, which has caused a significant disruption in global oil supply, driving up gas and diesel prices. These higher prices have fueled one of the largest COLAs in decades, further straining Social Security's financial reserves. Combined, these three Trump policies are accelerating the timeline for potentially sweeping benefit cuts of 22% for retired workers and survivors of deceased workers.