Debate continues on which presidential candidate would be better for your Social Security

Two Washington D.C. think tanks are at odds over which presidential candidate would be better for Social Security.

The Committee for a Responsible Federal Budget (CRFB) argues the program could run out of money within six years if Donald Trump is reelected, while Vice President Kamala Harris’ policies would not significantly alter the current trajectory.

The National Committee to Preserve Social Security and Medicare (NCPSSM) agrees that a Trump presidency is bad for the retirement fund but feels Harris would greatly benefit the program.

The program also faces a dilemma as the population ages. Trustees have projected that the trust fund will become insolvent by 2035.

“I wouldn’t call it a crisis right now, but if Congress doesn’t act by 2035, you are likely to get only 85% of what you think you’re going to get,” Dan Adcock, Government Relations and Policy Director of NCPSSM told MyNorthwest Monday.

Released on Monday and reported in The Washington Post, the CRFB findings predicted a Trump presidency would move back solvency by years.

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To consider them side-by-side, Marc Goldwein, CRFB’s senior policy advisor, said Trump’s proposals could have an unprecedented detrimental impact on the program compared to previous presidential campaigns. One of Trump’s key promises is to eliminate federal income taxes on benefits. Currently, 40% of people pay taxes on a portion of their benefits, which are funneled back into the trust fund. Removing this tax could cost the program nearly $1 trillion over a decade, the report estimates.

Adcock said that Harris wants the “wealthy to pay their fair share of Social Security taxes.” Under the Harris plan people would pay 6.2% of their taxes no matter how much they make. Under Trump, you would pay 6.2% in taxes up to $168,600 in salary. If you make more than that, you would not pay anything.

As far as the continuing service workers debate on taxing tips, Trump would have not tax them while Harris would have workers continue to pay 6.2% on tips. To put it simply, she would take money out of workers pockets now to make sure you get your full Social Security benefits in the future.

Kiplinger Personal Finance says those who would benefit the most from untaxed Social Security income narrow down to top earners, including:

• The highest-income households (the top 0.1% of the income spectrum — those making nearly $5 million or more annually) would see the biggest benefit from untaxed Social Security income. Hypothetically, if there were no taxes on the benefit they’d get an average tax cut of nearly $2,500 in 2025.
• Middle- and upper-income households (those earning between $63,000 and $200,000) would also get a bigger share of after-tax income. Households in this income range would see a tax cut between $1,190 and $1,430.

Trump’s plan to deport millions of undocumented workers could reduce the fund’s revenue by hundreds of millions of dollars. Undocumented immigrants contribute to the Social Security Trust Fund through payroll taxes but are ineligible to claim benefits, thus providing a net positive contribution.

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Trump’s proposed high tariffs on imports could harm the economy, leading to higher inflation. Increased inflation would result in higher payouts due to automatic cost-of-living adjustments. The report also mentions Trump’s promises to exempt tip income and overtime earnings from federal income taxes. If these exemptions extend to Social Security and Medicare taxes, it could cost the trust fund between $150 million and over $1 trillion over ten years.

The CRFB report predicts that under Trump’s policies, Social Security would face mandatory benefit cuts by 2031 or 2032. Without legislative changes, these cuts could increase from the currently projected 23% to about 33%.

Despite the incoming storm, Adcock said, “Don’t make any decisions based on what might happen.” He said stay the course because he believes that Congress will do what it has to do to save the program, even if it takes until 2035.

“Social Security is a very popular program,” Adcock expalined. “Congress will step in with a fix.”

Both Trump and Harris have pledged to protect Social Security and prevent benefit cuts if elected. However, neither has presented a comprehensive plan to address the projected funding gap. Stabilizing the trust fund will require either increasing revenue, reducing expenditures, or a combination of both.

Bill Kaczaraba is a content editor at MyNorthwest. You can read his stories here. Follow Bill on X, formerly known as Twitter, here and email him here.