Since taking office, President Trump, DOGE and the administration have been focused on trimming the budget and eliminating what they say is waste and fraud. Those initiatives have included a close look at Social Security and Medicare — the government's two largest programs, in both cost and the number of people impacted.
Presidential advise and DOGE head Elon Musk called entitlement spending within Social Security and Medicare key targets for cuts, and has cited overpayments, unused offices, and other redundancies. Musk also claimed that over $100 billion each year is paid to individuals with no Social Security number.
However, President Trump has pledged not to reduce or eliminate any benefits.
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“The Trump Administration will not cut Social Security, Medicare, or Medicaid benefits,” the White House said in a recent press release. The President himself has maintained that he won't touch Social Security, Medicare or Medicaid, and instead will be looking to remove "tremendous fraud" from the system.
President Trump's comments come at a time when the Senate is wrangling with whether it will pass the Republican-controlled House's government funding bill or risk a government shutdown.
Considering that over 71 million people currently receive Social Security benefits, and that Medicare currently serves 68.2 million people, it's important to examine what changes, if any, President Trump has vowed to make during his time in office.
So, whether you’re collecting benefits now or expect to in the future, Trump’s Social Security and Medicare agenda could have an impact on your finances.
The stakes for Social Security
Social Security is the government's biggest budget item and largest program, accounting for $1.46 trillion in 2024. Of that amount, 3.8% was funded by income taxes on Social Security benefits, while 91.3% was from payroll tax contributions and reimbursements from the General Fund of the Treasury. The program covered 71.6 million workers, according to the latest facts and figures about Social Security, 2024.
Medicare is the second largest budget item (as part of the larger Health spending category), accounting for $848 billion, or roughly 12% of the budget last year, with Medicare enrollment topping 65 million or roughly 25.4% of all 258.3 million adults in the U.S. who are enrolled in the program.
Predicting when Social Security’s trust fund will be exhausted is not an exact science. According to the Social Security Board of Trustees' May 2024 report, the trust fund will be insolvent in November 2035, one year later than previously projected.
However, a more recent report from the Congressional Budget Office (CBO) projected that Social Security would run out of money in 2033. Although Social Security would still exist after that time, retirees may receive a smaller percentage, thought to be around 79%, of their full benefits. That is, unless congressional lawmakers adopt changes before then. Tactics they may take might involve increasing Social Security payroll tax and trimming benefits.
While Social Security is in danger of running out of cash, Medicare’s finances have improved slightly over the past several years. Even so, Medicare, a federal healthcare program for seniors ages 65 and older and for people entitled to disability benefits, is also expected to encounter a cash crunch in 2036.
Social Security was established by President Franklin D. Roosevelt’s administration in 1935. It provides monthly income to more than 71 million beneficiaries, including retired Americans, disabled workers, survivors of deceased workers, and families. It comes as no surprise, then, that the system is overburdened.
The stakes for Medicare
Medicare is, in essence, a national health plan first visualized by President Teddy Roosevelt. President Harry Truman also fought to get a bill passed during his term, but was unsuccessful, and it was another 20 years before a form of national health insurance — Medicare for Americans 65 and older, and younger people with disabilities — would become a reality. Today, Medicare serves more than 65 million people million people.
According to the annual Medicare Trustees reports, Medicare covers about half of the healthcare expenses of enrollees. The remaining costs of healthcare are almost always covered by taking additional private insurance and/or by joining a public Medicare Part C and/or Medicare Part D health plan. These same trustees now project that Medicare's hospital insurance benefits will run out of money in 2036, if not sooner.
However, Medicare care cost projections are uncertain when looking out over several decades. This is partially due to scientific advances, therapies and procedures that may change the landscape of health care in the U.S. Conditions untreatable today may be handled routinely in the future and healthcare may become more efficient going forward. However, no one can be certain whether future developments will increase or decrease costs.
How Trump addressed Social Security in his first term
Trump’s approach in the past ties to the belief that a stronger economy would naturally sustain Social Security. He argued then, as he does today, that economic growth and job creation would boost payroll tax revenues, thereby supporting the program. However, experts mostly agree that economic growth alone isn't enough to solve the substantial funding issues facing Social Security.
While, in the past, some of Trump's comments sent mixed signals on his intentions for Social Security, his latest update repeats what he said to Fox News' Sean Hannity in an interview in February. "Look, Social Security won't be touched, other than if there's fraud or something. It's going to be strengthened. But it won't be touched."
In his first term and during his campaign, Trump also proposed eliminating taxes on Social Security benefits for seniors. However, some experts worry that his proposal to end Social Security taxes could destabilize benefit amounts in the long term.
Trump made no significant headway during his first term in remedying the funding issues impacting Social Security and Medicare. Each of his yearly federal budgets proposed spending cuts in Social Security, Medicare and Medicaid. However, the cuts were primarily in reduced payments to healthcare providers and hospitals, as opposed to recipient benefits. These cuts were not enacted, regardless.
The Republican Study Committee proposals
Republicans won both the House and the Senate, giving the GOP control over Congress for at least the next two years. Although both former President Biden and President Trump oppose the major changes to Social Security laid out by the Republican Study Committee (RSC), which includes more than 170 GOP representatives, a 2022 survey showed that many Americans support these or similar proposals.
The RSC's plan rejected two methods aimed at addressing Social Security's solvency issues — increasing taxes and using general funds to pay benefits. Instead, the committee called for three reforms:
- Adjust the full retirement age (FRA) for future retirees based on life expectancy.
- Adjust the primary insurance amount (PIA) benefit formula for anyone not nearing retirement and earning more than the PIA benefit factor for the wealthiest individuals.
- Phase out over time and limit auxiliary benefits (for spouses, divorced spouses, and children) for high-income earners.
While it isn't surprising that former President Biden would oppose these changes, many would assume President Trump would support the GOP proposals. That isn't the case. Last year, Trump stated that "under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security." Recently, his overall stance has remained the same, "you don't have to touch Social Security."
Will Trump change the retirement age?
There has been much discussion about increasing the full retirement age (FRA) in the U.S. as lawmakers explore options to ensure the Social Security program's solvency.
However, President Trump has said he will not support raising the retirement age. It is also worth noting, however, that some individuals within the Republican Party do support raising the retirement age to 69 (full retirement age is currently 66 or 67 depending on the year you were born).
A report from the Congressional Budget Office found that this increase would likely lead to smaller lifetime benefits for recipients and would leave workers who are currently in their 30s and 40s with around $3,500 less per year; a 13% annual benefit cut. The report also found that changing the Social Security FRA would not actually save enough money to change the currently predicted 2033 trust fund depletion deadline.
Read our article on how raising the social security retirement age to 69 might affect you.
Will Trump cut Social Security?
The White House on Tuesday said that Trump will "always protect" Social Security and Medicare.
Benefits and supplemental security income (SSI) payments increased by 2.5% in 2025. This cost-of-living adjustment (COLA) affects over 72.5 million Americans, providing an average increase of about $50 per month.
During his recent address to Congress, Trump said he will eliminate federal taxes on Social Security benefits for retirees. Before 1985, Social Security benefits weren't subject to federal taxes, and currently, only a few states continue to tax them. Trump also announced that his administration would investigate fraud within the program, citing issues like unrealistic beneficiary ages and excessive spending.
Trump has also maintained that he won’t raise payroll taxes, but may cut them. Both employees and employers fund Social Security via payroll taxes, with each contributing 6.2%. Self-employed workers pay the full 12.4% tax themselves. Trump insists he won’t raise payroll taxes “on his watch.” However, looking back on his first term, he may go even further by lowering payroll taxes instead of just refusing to raise them. Some experts agree this will harm the program and possibly make matters worse.
The administration has linked waste and fraud in entitlement programs, including Social Security. In an August 2024 report from the Social Security Administration’s Office of the Inspector General, it was found that nearly $72 billion had been paid out in improper payments between 2015 and 2022.
Trump also stated that government databases list millions of beneficiaries at improbable ages, including individuals over 160 years old. That said, no evidence has been released (as of yet) showing hundreds of thousands of people over 100 years old collecting benefits illegally.
In a statement on February 19, Lee Dudek, the new acting Social Security Administration commissioner, said that individuals listed as over 100 years old in the Social Security system are "not necessarily receiving benefits," but are instead individuals without a recorded date of death.
The position by both the administration and DOGE is worrying advocates, who fear the claims are a pretext for massive cuts to the program in the future.
It's important to remember that any changes Trump makes to Social Security would likely not take effect until at least 2026, as only earlier scheduled changes will impact the program in 2025.
Trump initiatives on Social Security since taking office
- Trump proposes halting federal taxes on Social Security. The "No Tax on Social Security Bill" refers to recent legislation aimed at eliminating federal taxes on Social Security benefits for seniors. The bill was introduced to the House on January 31, 2025 and has been referred to the House Committee on Ways and Means.
- Trump created the newly created Department of Government Efficiency (DOGE). The agency, under the direction of Elon Musk, is intended to "implement the president's agenda by modernizing federal technology and software to maximize governmental efficiency, reduce waste and fraud."
- Trump wants to lower inflation. If inflation drops as Trump desires, it could lead to a lower cost-of-living adjustment (COLA) for benefits.
- Trump names Leland Dudek as the acting commissioner of the Social Security Administration. Prior to becoming the Acting Commissioner, Dudek served as a Senior Advisor for the Social Security Administration's Office of Program Integrity.
- Trump nominates Frank Bisignano, chief executive of payments and financial technology company Fiserv, to serve as commissioner of the agency. Bisignano's Senate confirmation hearing is expected to take place later this month.
How Social Security funding could change taxes
A new law before the House Ways and Means Committee will eliminate federal taxes on Social Security benefits starting this year. However, some states may continue to tax Social Security. The No Tax on Social Security Bill (H. R. 904) will bring significant financial relief to millions of retirees. Tax returns filed in 2026 will reflect these changes if passed.
What does that mean for you? If you are married, with an annual income of between $32,000 and $44,000, up to 50% of your Social Security benefits were taxed last year. If the bill becomes law, then you will pay no tax on your benefits. That could mean a savings of up to $5,000 in taxes annually. But critics have warned that cutting the taxes could push the Social Security Trust Fund closer to insolvency.
In 2024, taxes on Social Security benefits raised about $94 billion. Data from the Congressional Budget Office (CBO) show that in eliminating taxes, as currently proposed, the total reduction in revenue will be about $1.6 trillion between fiscal years 2026 and 2035 — with $650 billion less for Medicare and $950 billion less revenue for Social Security if funding is reduced.
The highest-income households or those making nearly $5 million or more annually would see the biggest benefit from untaxed Social Security income. If there are no taxes on the benefit, they'll get an average tax cut of nearly $2,500 in 2025. Middle- and upper-income households, or those earning between $63,000 and $200,000 would also get a break, as a share of after-tax income. Households in this income range would see a tax cut between $1,190 and $1,430.
Keep in mind that if you file as an individual on your income taxes, and have a total annual income that’s less than $25,000, you don’t pay taxes on your Social Security benefits regardless..
How Trump addressed Medicare in his first term
Medicare provides health coverage to more than 63 million Americans over the age of 65. But an aging population and increased enrollment, along with rising healthcare costs, are major factors that have contributed to Medicare’s current financial strain.
Trump stated in 2016 that his administration would act to "Modernize Medicare," which refers to proposals such as premium support and raising the age of Medicare eligibility. Trump supported repealing and replacing the Affordable Care Act (ACA), which many feared would adversely affect the Medicare provisions included in the law, such as drug benefits, improved preventive benefits and numerous Medicare savings proposals.
During his first term in office, President Trump did propose some cuts to Medicare, as reported by the New York Times — though experts agreed these cost reductions would not have significantly affected benefits. (Congress did not enact them).
President Trump also published the Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors in October 2019. The EO directed Trump's government to build on the access Medicare Advantage beneficiaries have to tax-advantaged medical savings accounts. It also asked the government to determine ways for those beneficiaries to earn cash rewards or rebates in exchange for saving the program money by receiving quality care.
In 2018, then-President Trump signed these five Medicare healthcare changes into law, as reported by PBS:
- Medicare’s Independent Payment Advisory Board was abolished before even starting.
- The rules for Medicare’s Part D drug plans were changed with the coverage gap (or donut hole) in these plans ending (in 2019).
- Consumers who spent a great deal of money on drugs and entered the so-called catastrophic phase of Part D plans will pay no more than a few dollars for each prescription or, for costly drugs, no more than 5% of the cost of the drug.
- Medicare’s caps on covered expenses for outpatient therapy were officially repealed.
- People making more than $500,000 a year ($750,000 for couples) will pay 85% of the actual costs of Part B and D in 2019, up from 80% a year earlier. Most Medicare enrollees pay premiums that equal about 25% of these costs.
- Medicare Advantage plans would now pay for limited long-term care expenses – something that until now has not been covered by Medicare.
What Trump has said about Medicare since becoming President
On his first day back in office, Trump rescinded several executive orders previously signed by former President Joe Biden, including . Executive Order 14087 signed by Biden on Oct. 14, 2022, with the stated goal of lowering prescription drug costs for all Americans.
At first glance it might seem that Trump's action would increase prescription drug prices. However, current drug prices won't be affected by this move. The Inflation Reduction Act of 2022, which was signed into law by Biden, phases in a cap for out-of-pocket costs for Medicare beneficiaries and establishes a $35 per-month cap on insulin. Overturning these provisions would require an act of Congress.
The HHS didn't complete the initiative to lower drug prices before Biden left office. Trump's executive order (rescinding Biden's executive order) may mean that the department's efforts to research how to lower Medicare drug prices could come to a screeching halt. However, during his first term, Trump supported policies that would lower Medicare drug prices.
Trump also nominated Robert F. Kennedy, Jr. to be the HHS Secretary. Kennedy was confirmed by the Senate on February 13, 2025. At this point, it’s unlikely that Kennedy will seek to cut Medicare benefits. President Trump has also stated, "We will protect Medicare and ensure seniors receive the care they need without being burdened by excessive costs."
The nonpartisan Committee for a Responsible Federal Budget confirmed that Trump's budgetary proposals for Medicare were intended to reduce the cost of Medicare — not to reduce the benefits older Americans receive.
However, the Congressional Budget Office said in a report last week that Republicans can’t achieve their goal of slashing $2 trillion in federal spending over the next decade without making cuts to Medicaid. The U.S. Government Accountability Office estimates taxpayers lose as much as $521 billion annually to fraud — and most of that is within entitlement programs, such as Medicare and Medicaid.
Trump also tapped Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services (CMS), nominating the former Senate candidate to lead the division. Although Trump and the RNC vowed not to cut Medicare, Oz and several key Republicans have advocated for Medicare Advantage, a paid alternative to traditional Medicare coverage managed through private insurers. (It is a bit ironic that Oz's plan bears a striking resemblance to Kamala Harris’ 'Medicare for All' proposal).
As of 2024, an estimated 33.8 million Americans received health coverage through Medicare Advantage. Private insurers provide these plans and must offer at least the same level of coverage as original Medicare. However, it's unclear how advocating for Medicare Advantage plans would save the government and U.S. taxpayers money. Advantage programs reportedly cost 22% more per beneficiary than traditional Medicare, likely because Advantage companies must generate a profit.
Read RFK Jr. Now Heads HHS: How Medicare and Your Retirement May Change to learn more.
While it may be still too early for predictions, Trump has maintained his earlier position to “not cut one penny” from Medicare. He also said he’d give Robert F. Kennedy Jr. broad rein to reshape health care.
Trump initiatives on Medicare since taking office
- Trump rescinded former President Joe Biden's executive order 14087. This order was put in place to lower the cost of prescription drugs for Americans. Existing laws and regulations governing prescription drug pricing and Medicare and Medicaid policies remain in effect.
- Trump freezes federal funds. A federal judge intervened to temporarily halt President Trump’s directive to freeze certain federal funds — possibly including Medicare. However, a memo from the Office of Management and Budget (OMB) clarifies that Medicare (along with Social Security and Medicaid) are excluded from the freeze.
- Future cuts? Although President Trump has said he will make no cuts to Medicare, in an updated statement by White House spokesperson Kush Desai, the mention of Medicare was removed. It is up to the House Energy and Commerce Committee to decide what programs will see funding cuts under Trump's new budget, and so far it is uncertain what will happen to both Medicare and Medicaid.
- New continuing resolution. In early March, Republicans unveiled the new continuing resolution (CR) bill in hopes of avoiding a government shutdown on Friday, March 14. In the CR, anyone who receives Medicare or Medicaid should see no disruptions to their benefits. Medicare would also extend many services, including telehealth, through the 2025 fiscal year.
Bottom line
It's misleading to say that the issues facing Medicare and Social Security are singularly related to Congress reducing the portion of tax dollars pouring into the programs. Or, that DOGE can find sufficient fraud and waste to make the programs solvent. It can be argued instead that it is the framework for these programs that lawmakers set up originally. If that's true, the best foot forward would be finding a bipartisan trajectory on legislation to change spending or revenue, or both.
Medicare and Social Security have been hot topics of debate for decades. But the fact remains that each program is strapped for cash and there is no easy way out. Both the Republicans under Trump and the Democrats under Biden (and many administrations before them) made promises to overhaul Medicare and Social Security, but clearly, all have come up short.
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