Trump, Biden Acts Threaten Social Security, Medicare Trust Funds
President Trump's One Big Beautiful Bill Act and President Biden's Social Security Fairness Act have raised concerns about the future of the Social Security and Medicare trust funds. The acts, signed into law respectively, could accelerate the depletion of these funds, leaving beneficiaries with reduced benefits.
The Old-Age and Survivors Insurance Trust Fund, which pays Social Security retiree benefits, is projected to run out in 2033. If depleted, beneficiaries would receive only 77% of their benefits, facing a significant cut. The Hospital Insurance fund for Medicare Part A is also at risk, expected to be fully depleted by 2028, leaving beneficiaries with only 89% of their benefits.
The acts have contributed to this situation. The One Big Beautiful Bill Act reduces the taxability of benefits for older Americans with low income, reducing money flowing into the trust. Meanwhile, the Social Security Fairness Act increases payments to certain public sector employees, further straining the trust fund. These changes, combined with a decreasing ratio of workers to beneficiaries and a shrinking coverage of earnings by Social Security payroll tax, have exacerbated the funds' insolvency projections.
The latest 2025 annual Social Security and Medicare trustees report projects the insolvency of the Social Security trust funds around the mid-2030s. While the Disability Insurance Trust Fund is expected to remain stable until at least 2099, the Old-Age and Survivors Insurance Trust Fund and the Hospital Insurance fund face severe shortfalls. Lawmakers must address these challenges to ensure the long-term solvency of these vital programs.
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