Unidentified Senator Warns of Trump Tax Reform's Impact on Social Security
A recent search for a senator who sent a letter in 2021 to the Social Security Administration's Office of the Actuary regarding President Donald Trump's tax reform law, the 'Big, Beautiful Bill', has yielded no clear results. Meanwhile, in May 2023, a significant milestone was reached as the average monthly Social Security retired-worker benefit surpassed $2,000 for the first time.
The senator's letter, which remains unidentified, expressed concerns about the financial impact of Trump's tax reform law on Social Security. The law, known as the 'Big, Beautiful Bill', has been projected to widen Social Security's deficit by $168.6 billion from 2025 through 2034. This is due, in part, to the law speeding up the expected exhaustion of the Old-Age and Survivors Insurance (OASI) asset reserves by one quarter, to the fourth quarter of 2032.
The financial strain on Social Security is compounded by ongoing demographic shifts. Baby boomers retiring, increased longevity, rising income inequality, decreased net legal migration, and a record-low U.S. birth rate are all contributing to the weakening of Social Security's foundation. These factors, combined with the impact of Trump's tax reform law, put the existing payout schedule, including near-annual cost-of-living adjustments, at risk. This is concerning given that 80% to 90% of retirees rely on their monthly Social Security income to cover their expenses. Without Social Security, the poverty rate for retirees aged 62 and over would jump from 10.1% to an estimated 37.3%.
The unidentified senator's letter highlights the potential long-term effects of Trump's tax reform law on Social Security. As the program faces increasing pressure from demographic shifts and financial strain, it is crucial for lawmakers to address these issues to ensure the program's sustainability for future generations.
