Social Security: Here’s what Trump’s proposed budget could mean for your benefits

Aimee Picchi | Special to USA TODAY

Show Caption Hide Caption Social Security funding, explained With a rapidly growing aging population, securing Social Security funds is now more crucial than ever. But how did we get here in the first place?

While campaigning for the presidency in 2016, Donald Trump repeatedly vowed that he wouldn’t touch Social Security. But as the 2020 general election nears, his administration is signaling changes that could undermine his pledge.

Trump has largely continued to voice support for the social safety-net program, which provides retirement benefits for 44.5 million seniors – even though he appeared to backtrack in a January interview when he told CNBC that he’d “take a look” at restructuring entitlement programs. After Democrats accused him of breaking his campaign pledge, Trump restated his earlier vow, writing on Twitter, “We will not be touching your Social Security or Medicare in Fiscal 2021 Budget.”

Yet Trump’s words and his administration’s actions aren’t in alignment.

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Case in point: His fiscal 2021 budget, released Monday, includes cuts to the Social Security program. So why aren’t retirees up in arms? That’s because the reductions are aimed at the part of Social Security program that provides benefits to about 8.5 million disabled workers – and not the monthly retirement benefits.

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The Social Security Disability Insurance program is still part of Social Security, notes Kathleen Romig, senior policy analyst at the Center for Budget and Policy Priorities, a left-leaning think tank.

“What he's said has been very consistent, that his budget won’t touch Social Security, but the things he’s doing are not consistent” with his vows, Romig says. “The administration has rationalized that by trying to redefine what Social Security means.”

Social Security disability

Social Security isn’t only for retirees: About 4.2 million children in the U.S. receive payments from the program because one or more of their parents died, became disabled or retired, according to the Social Security Administration. And the disability program protects millions of workers of all ages.

“Social Security has included disability insurance as part of the program” since the 1950s, Romig notes.

Trump’s budget has little chance of winning congressional approval, especially with the Democrats controlling the House. But the budget signals the administration’s priorities, including cutting social safety-net programs such as food stamps and Medicaid.

What this means for you

Trump’s budget would trim spending by about $45 billion on Social Security Disability Insurance and Supplemental Security Income, a program for disabled children and adults, by promoting return-to-work programs, according to the nonpartisan Committee for a Responsible Federal Budget.

Romig says that suggests about 5% of disabled workers would return to the workforce, which she views as unlikely given that workers who qualify for disability don’t have a track record of returning to the labor market.

It’s possible that spending in the program could be trimmed through another method: In November, the Social Security Administration proposed more frequent “continuing disability reviews,” or checks to make sure that people receiving disability payments are, in fact, still disabled.

While it’s unclear when or if this proposal will be adopted, its impact would likely knock thousands of disabled Americans from the program, Romig says. Many of those disabled workers will lose their coverage simply because they fail to keep up with the paperwork, she adds.

Will Social Security be there for you?

About 3 of 4 workers worry Social Security won’t be there for them when they’re ready to retire, according to a Transamerica survey. But that’s a dangerous fallacy, retirement experts say.

In fact, the Social Security system isn’t going broke. Because workers pay into Social Security with each paycheck, the program has a continuous stream of income.

“Social Security will go on and on forever as long as people continue to work,” Romig notes.

Yet the program’s spending is now exceeding income – due partly to millions of retiring baby boomers – which means the government is dipping into reserves to pay out benefits. Those reserves are slated to be depleted in 2035, the Social Security trustees said in its 2019 report.

But that does not mean Social Security will be gone by 2035. Instead, retirees at that point will see a 20% cut in their benefits, the trustees say.

That’s why politicians have proposed reforming Social Security. Fixes could include boosting the full retirement age – effectively, a cut to your benefits since you’d have fewer years to claim them – or raising the cap on payroll taxes, set at $137,700 for 2020.

While Trump hasn’t proposed any changes for Social Security’s mainstay of providing retirement benefits, taxpayers may want to keep an eye on the issue if he’s elected to a second term, Romig says.

That’s because presidents traditionally tackle Social Security in their second term, such as President George Bush’s attempt to partially privatize the program in 2005.

Aimee Picchi is a business journalist whose work appears in publications including USA Today, CBS News and Consumer Reports. She previously spent almost a decade covering tech and media for Bloomberg News. You can find her on Twitter at @aimeepicchi.