Ninety years ago, Social Security was created. What was born out of financial destitution during the Great Depression to create a federal safety net for the impecunious has since metastasized into a bankrupt system that has served as a primary source of income for millions of Americans. While President Donald Trump has committed to strengthening the popular retirement program, fiscal mismanagement over the past few decades has produced a “oh, the humanity!” moment.
To commemorate Social Security’s 90th anniversary on August 14, President Trump signed a proclamation, committing “to always defending Social Security, rewarding the men and women who make our country prosperous, and taking care of our own workers, families, seniors, and citizens first.” He touted the One Big Beautiful Act, which implemented a temporary $6,000 federal income tax deduction for US seniors.
Despite the fiscal woes facing the near-century-old safety net, Trump stated that his administration will ensure its solvency. “You reported it all the time. In four or five years, it’s going to go bust, but not anymore, it’s not,” the president told reporters.
“In the campaign, I made a sacred pledge to our seniors that I would always protect Social Security and, under this administration, we’re keeping that promise and strengthening Social Security for generations to come,” President Trump continued. “You keep hearing stories that in six, seven years, Social Security will be gone, and it will be if the Democrats ever get involved, because they don’t know what they’re doing. But it’s going to be around a long time with us
While strengthening the program is the president’s intention, the numbers present a vastly different depiction of the structure’s future.
Are the rumors of Social Security’s death greatly exaggerated? While the benefit program turned 90, it could easily face its demise at 97.
Earlier this month, the Office of the Chief Actuary (OACT) at the SSA published an analysis examining the program’s monetary health. The report concluded that the Republican tax-cut-and-spending megabill could accelerate the insolvency of the trust’s funds.
“Because the revenue from income taxation of Social Security benefits is directed to the Social Security and Medicare trust funds, implementation of the OBBBA will have material effects on the financial status of the Social Security trust funds,” the report stated, pointing to the fourth quarter of 2032 as the reserve depletion date.
All eyes will be on the 2026 Trustees Report, which will feature the latest data, methods, and assumptions – as well as potential changes arising from the One Big Beautiful Bill.
Nevertheless, whenever the retirement trust fund is out of cash, a 24% across-the-board cut is automatically instituted. This means an average couple receiving a monthly check will endure an annual reduction of more than $18,000. However, Experts from the Committee for a Responsible Federal Budget, an independent policy organization, say it is not too late to reverse course.
“Social Security is 90 years old, but it hasn’t had a comprehensive checkup since it was 52 (in 1983) – and it is showing its age. To ensure the program survives another 90 years, lawmakers should pursue trust fund solutions to restore solvency and make other improvements. In the coming months, the Committee for a Responsible Federal Budget will begin releasing novel solutions that could help address the program’s challenges.
“But the most important solution is political will. Politicians need to be honest with the public on the challenges the program faces and what it will take to ensure the program can pay full benefits past the age of 100. Time is running out.”
How did this happen, anyway? First, the US population is aging rapidly, and the number of retirees drawing benefits is approaching parity with the number of workers paying into the system. The other factor is declining birth rates, meaning fewer individuals are entering the workforce and, as a result, the federal government is collecting less payroll tax revenue to fund the system.
Economic observers argue that a short-term fix, of course, is to raise the eligibility age and increase taxes. Still, the long-term solution is either to phase it out or bolster the contribution pool.
American seniors are receiving a modest increase to their Social Security benefits. According to The Senior Citizens League, the expected 2026 cost-of-living adjustment, or COLA, is projected to rise to 2.7% based on the latest Consumer Price Index-W.
While it is a preliminary forecast – the United States still has the August and September CPI reports ahead – the organization’s executive director, Shannon Benton, says next year’s COLA will be inadequate.
“With the COLA announcement around the corner, seniors across America are holding their breath,” Benton said in a statement. “While a higher COLA would be welcome because their monthly benefits will increase, many will be disappointed.”
For now, and under today’s economic climate, it is better than nothing.
It turns out that the real magic number is $63 trillion. The 2024 Old-Age, Survivors, and Disability Insurance (OASDI) trustees’ report determined that Social Security is facing a permanent $63 trillion in long-term unfunded liabilities. Ultimately, it is political suicide for either side to execute drastic changes to the system, but it is also negligence not to address this fiscal black hole. Perhaps the aim is to abolish the idea of retirement, an ancient relic of a bygone era.