Social Security Under Trump: 5 Warning Signs

The landscape of federal agencies has been experiencing turbulent changes since President Donald Trump’s second inauguration, and even Social Security, known as the “third rail” of American politics, is not exempt from these shifts.

Trump assured during his campaign that he would not reduce benefits for eligible recipients, a promise reiterated by the White House in a March 11 press release stating, “The Trump Administration will not cut Social Security, Medicare, or Medicaid benefits.” Thus far, the administration has stayed true to its commitment to keep benefit levels unchanged.

However, in the early days of the administration, announcements have been made regarding rule changes and staff reductions that could impact service levels, particularly for vulnerable applicants and beneficiaries. This comes at a time when a significant number of Americans are reaching retirement age, creating what is known as “peak 65.”

Within the administration, rhetoric has become more heated. Elon Musk, a “special government employee” overseeing the Department of Government Efficiency (DOGE), referred to Social Security as “the biggest Ponzi scheme of all time” in a podcast interview on Feb. 28. Trump also criticized the program in his recent Congressional address, citing “shocking levels of incompetence and probable fraud” within Social Security.

Social Security is the largest expenditure in the national budget, with $1.5 trillion allocated to the program in 2024. In September of that year, 51.5 million retired workers received an average benefit of $1,922. However, Social Security serves more than just retirees. In September 2024, beneficiaries included:

According to AARP, 40% of older Americans rely on Social Security for over half of their family income, and 14% depend on the program for 90% or more of their income.

Concerns about the future of Social Security are mounting, with former SSA commissioner Martin O’Malley warning that the administration’s actions could lead to a “system collapse.” Here are five developments to monitor as the new administration aims to reduce Social Security costs.

At the start of Trump’s term, the Social Security Administration (SSA) employed 57,000 individuals. By Feb. 28, the SSA announced plans to decrease this number to 50,000. Even before the cuts, Social Security was operating with the lowest staffing levels in 50 years, despite a growing population of retirees and longer life expectancies.

For context, in 1995, there were 62,504 SSA employees serving 43.4 million beneficiaries. This translated to a ratio of about 694 beneficiaries per employee. With the SSA aiming to serve 68.5 million beneficiaries with 50,000 staff members, the ratio nearly doubles to 1,369 to 1.

While many services can now be accessed online, not all seniors have internet access. A significant number of beneficiaries still require in-person assistance, particularly for complex issues. The processing time for disability claims has already doubled in the past five years, increasing from four to eight months, according to AARP.

Lee Dudek, acting commissioner of Social Security under Trump, has implemented two significant process changes aimed at combating fraud and identity theft. However, these changes may complicate matters for new applicants and current beneficiaries, especially those with limited mobility.

• On March 12, SSA announced that direct deposit changes can no longer be processed over the phone to combat fraud associated with these requests. Changes must now be made online or at a local office.

• On March 18, SSA introduced “stronger identity verification procedures” requiring individuals to verify their identities online when applying for benefits. Those unable to do so must visit a field office.

These changes are expected to increase field office visits by 75,000-85,000 per week, posing challenges for vulnerable populations while reducing fraud risk and improper payments.

A significant policy change requiring appointments rather than drop-in visits at field offices was implemented in December. While drop-in visits are still accommodated, most offices now mandate appointments for in-person services.

To schedule an appointment, individuals must call the main Social Security line, where hold times can exceed two hours. Appointment availability is typically a month or more out. Conflicting reports within the administration suggest potential closures of public-facing offices, with some SSA offices slated for closure according to the Department of Government Efficiency.

The lists provided by different sources show about 1,200 field offices, with some small remote sites being considered for closure.

In cases of overpayment to recipients, Social Security historically withheld 100% of future benefit checks until the excess amount was recovered. President Joe Biden reduced this rate to 10%, but under Dudek’s leadership, the 100% recovery policy has been reinstated. The SSA aims to assist beneficiaries facing hardship due to the accelerated repayment, requiring them to contact an office to discuss their situation.

A report from the Social Security Administration’s Office of the Inspector General estimated $72 billion in “improper payments” from fiscal years 2015 to 2022. The policy change is expected to help recover an additional $7 billion annually.

The long-term funding challenges of Social Security predate Trump’s administration, but some policy proposals could worsen the situation. The program relies on current workers’ payroll taxes to fund benefits for retirees, but an aging population has led to an imbalance between contributors and beneficiaries. The ratio of workers to retirees has significantly declined since 1960.

Since 2010, Social Security has been paying out more in benefits than it receives in payroll taxes. In 2023, there was a $41 billion shortfall covered by trust funds expected to be depleted by 2035. If the funds run out, Social Security would only be able to pay 83% of scheduled benefits.

Addressing the funding gap may involve raising the retirement age, increasing payroll taxes, or removing the cap on Social Security payroll taxes. While full retirement age was raised to 67 in 1983, no such changes are currently proposed. Trump has pledged to eliminate income taxes on Social Security benefits, a move that could impact the system’s sustainability by reducing tax revenues reinvested into benefits.

A study by The Wharton School projected that eliminating taxes on Social Security benefits would shorten the trust funds’ lifespan by two years, increasing federal debt by 7% by 2054.

(Photo by Andrew Harnik/Getty Images)