Social Security 2025: A Breakdown of How Payments Could Be Affected Under Biden vs. Trump

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The winner of the November election will serve as president until the next chief executive takes the oath of office in January 2029. If nothing changes between now and then, whoever is sworn in that day will have to make some tough choices regarding Social Security, as the trusts that fund it are on pace to be depleted by the mid-2030s.

When that happens, the program won’t be able to pay recipients the full benefits they were promised — and bought through their payroll taxes for their entire working lives.

Both Donald Trump and Joe Biden are eligible to serve only one more term, so the Social Security buck won’t ultimately stop with them — but will either of them make changes to the program if elected?

Perhaps — but none that will impact payments in 2025.

A President Can Only Approve or Reject Congressional Action

For all their differences, Joe Biden and Donald Trump have one thing in common. Both of them can propose any policies or make any promises they like regarding Social Security, but they can’t act on them without congressional authorization. Congress controls spending and holds the power to alter eligibility rules for Social Security and all so-called entitlement programs.

Since the president has the power only to sign or veto a congressional bill, the outcome of the Senate and House elections is as consequential as the presidential contest. Both Biden and Trump will need a friendly Congress — or at least one willing to compromise — to make any changes to Social Security.

Both candidates have vowed not to reduce the benefits that retirees and other recipients rely on, but they have radically different ideas on how to maintain the status quo, should they and their respective parties enjoy unified power in 2025.

Trump and a GOP Congress

Trump has said he doesn’t think Social Security should be changed and has floated the idea of using oil and gas revenues to support the program, which the Motley Fool compared to Saudi Arabia’s model of social safety-net funding. Trump has vowed not to raise the payroll taxes that fund Social Security but has indicated he might try to lower them.

In March, more than 170 Republican House lawmakers — including many Trump allies — signed a budget proposal that calls for raising the age of eligibility for future retirees.

Biden and a Democratic Congress

Like Trump, President Biden has vowed not to reduce benefits, but he aims to retain the program’s solvency by taxing the wealthy. Biden has proposed removing income limits on the payroll tax and levying new taxes on income over $400,000 to fund the program.

However, since a unified Congress won’t be possible until 2025, neither Trump nor Biden will be able to implement any proposals until 2026.

In short, the November results can’t affect benefit payments for 2025.

Either Way, Beneficiaries Should Brace for a Lackluster Raise

Neither Biden nor Trump will be able to take action that affects payments in 2025, but beneficiaries should prepare to be disappointed by next year’s checks.

Every year since the mid-1970s, the law has required the Social Security Administration (SSA) to conduct an annual cost-of-living adjustment (COLA) that increases payments, if necessary, to ensure that benefits keep pace with inflation, so recipients can retain their purchasing power as prices rise over time.

In 2023, the SSA issued a 3.2% COLA for 2024, bringing the average retirement benefit up to $1,907 per month.

Analysts had called for another 3.2% raise for 2025, but on June 12, MarketWatch reported that a 3% COLA is now more likely. While that’s better than the 2.6% average over the last 20 years, it might leave recipients feeling light in the wallet, considering the lingering effects of continued inflation. A 3% raise would give the average recipient $1,964.21 per month instead of $1,968.02, which would have been the result of a 3.2% COLA.

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