On January 20, Donald Trump became the 45th President of the United States. Throughout his campaign, President Trump repeatedly promised that he would neither cut Social Security benefits nor raise the retirement age of future beneficiaries if he became president. However, his campaign conditioned his promise not to touch benefits upon another promise: Trump stated that he would avoid cuts to Social Security by growing the economy. Although every politician would like to see the economy grow under his or her leadership, it is an open question whether Trump’s policies could lead to the sort of growth that he has promised.
The economy grew significantly under President Obama’s administration. Trump’s proposed policies depart starkly from the policies that were proven effective under the Obama administration. In light of their differences in policy, Trump may not achieve the promised growth. What happens to Social Security then? We don’t know. But there are clues.
Throughout his campaign, Trump was at odds with the Republican Party with respect to Social Security. The official Republican Party platform states that the party will not decrease benefits only for current retirees and those close to retirement age. It makes no promises to future retirees who are not close to retirement age, and it makes no promises to the disabled. The Party Platform also states that the party opposes tax increases to fund Social Security, including raising the payroll cap on high earners. If tax increases and cuts for present beneficiaries are off the table, assuming that the economy does not grow at the rate required, that leaves only two options: cutting benefits for the disabled and raising the retirement age.
In keeping with the party platform, Congressman Sam Johnson, the chairman of the House Social Security subcommittee, recently introduced a bill that would cut Social Security benefits for all but the very poorest beneficiaries. The House Freedom Caucus, an anti-establishment group within the Republican Party, has proposed another possibility: cutting benefits for everyone now.
As of right now, despite clues about the policies favored by the Republican establishment and anti-establishment, we don’t know what the new administration will do about Social Security. Indeed, the fledgling Trump administration has offed no proposals for cutting Social Security. However, we may have more information soon, because the federal government will reach the debt ceiling on March 15, 2017. At that point, Congress must act on the government’s borrowing authority or face a government shutdown. Such events in the past have prompted other administrations to take positions on Social Security.