Hello, happy Tuesday. There are 41 days left until Donald Trump returns to the White House. Today we focus on what he does for the elderly, especially those who, unlike him, need Social Security to survive.

Over the weekend, the president-elect promised on NBC’s “Meet the Press” that he would “not touch Social Security unless we make it more efficient.” That includes avoiding previously floated ideas, such as raising the retirement age, he vowed.

“The people will take what they can get,” he said, which sounds as much like a threat as it does a promise.

The Republican Party has long attempted to dismantle or reduce Social Security since its founding in 1935. And despite President Trump’s assurances, financial attack dogs Elon Musk and Vivek Ramaswamy were on Capitol Hill last week, with lawmakers suggesting: “Everything is on the table” As for the cut.

So what exactly do we get under Trump 2.0 when it comes to the country’s most popular social safety net? We asked the experts, so let’s dig deeper.

Why ruin Social Security in the first place?

Social Security is one of the most popular programs run by the government. 87% of Americans — regardless of political party — agree that protecting it should be a priority.

That’s because many of us, even middle-class savers, worry about what will happen if we can no longer work. So while Social Security is a combination of forced savings and insurance policies that some on the right resent, it also has a deep place in our hearts as a safety net to prevent us from falling into poverty in old age. There is. Those of us who claim to hate government benefits.

Daniel Hammermesh, a professor emeritus of economics at the University of Texas at Austin, said people bluntly say that Social Security won’t last forever, but secretly they don’t have other plans for surviving in retirement. do. For about 50% of Americans over 65Social security accounts for about 50% of your income. For about a quarter of them, it’s 90% of their income.

Although many people say they don’t count on Social Security, “deep down, we depend on it,” he told me.

So it is politically insane to suggest abolishing it, as some on the right have done. Approximately 68 million Americans receive a check each month, primarily due to age or disability. Mr. Trump clearly understands that this is a large number of ballots.

But there’s also this. Social Security means you’re living on borrowed time.

“We know that the Social Security Trust Fund is going to run out of money, which means something has to happen,” said Alan Auerbach, a professor of economics and law at the University of California, Berkeley. .

The trust fund will likely be depleted by 2034. If nothing changes, benefits will have to be cut.

(Sorry, an earlier version of this newsletter said the system would be defunded, which my esteemed colleague Michael Hiltzik pointed out was inaccurate.)

dig a deeper hole

Despite this frightening reality, President Trump’s detailed plan for Social Security so far only deepens the hole by eliminating taxes on benefits and tips.

Lawrence Kotlikoff, an economics professor at Boston University, warns that the system would go bankrupt even faster in that case, since these taxes are the source of revenue that keeps the system afloat.

But he added that eliminating taxes, especially on retirees, is a plan to “give more and more money to seniors who have nothing to do but vote on Election Day.”

This is, of course, good political common sense, but as Kotlikoff succinctly summed it up, it leaves young people “scrappy.”

Kotlikoff said it is possible to fix the system, but it will require drastic measures. He would like to see an entirely new system introduced that would allow young workers to put some of their contributions into the market while still receiving a guaranteed pension when they retire.

Privatization of various kinds has fascinated Republican voters for years, but some worry that it may ultimately become President Trump’s goal — that is, without any insurance on profits. This means that the savings part will be forced.

President Trump recently nominated Frank Bisignano, a financial services executive who reportedly earns more than $100 million a year in the private sector, to head the Social Security Administration.

“I look forward to applying my experience to transforming the Social Security system,” Bisignano said in a news release.

And while DOGE’s Musk and Ramaswamy have vowed to cut government spending by $2 trillion, it will be difficult to do so without cutting into Social Security.

“I wish them the best of luck,” Auerbach said. He points out that the bulk of government spending goes to Social Security, Medicare, Medicaid and defense.

“Discretionary spending other than defense makes up a fairly small portion of the budget,” he said. “If you take $2 trillion out of it, you’re talking about making it disappear.”

Translation: When a billionaire changes things, it rarely works out for the little guy, and it often doesn’t work out the way the billionaire thinks it will.

But to be fair, the last time Social Security was “transformed” was under Ronald Reagan. In reality, it didn’t turn out badly, and in the end it was surprisingly bipartisan. After multiple threats of deep cuts, Congress ultimately increased the retirement age from 65 to 67, among other changes, extending the plan’s life to some extent.

Hamermesh said thoughtful, bipartisan reform could save the system again. He has two big fixes in mind. First, because people are living longer, raise the retirement age again.

Second, remove the cap that allows high earners to protect a large portion of their wages from being paid into the fund. In 2024, high-income earners will pay social security taxes only Up to $168,600.

Their income was then no longer taxed for Social Security purposes. Mr. Auerbach said that taxing these additional wages would go a long way toward stabilizing Social Security. But just as Democrats hate raising the retirement age, Republicans hate taxing the wealthy.

“I cannot stress enough that there is a rational solution, but it will cost everyone politically something,” Hamermesh said.

Cut or uncut?

Bipartisan support is not my greatest hope for the next four years, but where does that leave us?

Teresa Ghilarducci, an economics professor at the New School in New York, predicts “malign neglect.”

She said she thinks President Trump will likely just sit back and watch the ship sink. This will not affect his current benefits or his aging basis as there are enough funds left to pay for about 10 years. But as the debt worsens exponentially, it will be extremely difficult for future administrations to save the program.

Ghilarducci said in an email that doing nothing is a deliberate strategy to “shrink Social Security by default and leave millions of Americans with reduced benefits.” “Trump is smart enough not to push for something as unpopular as raising the retirement age (despite the Republican Study Committee raising it), but time is running out.”

Auerbach expects to see the ship sink.

“If I were to pick one most likely outcome, I would say absolutely nothing happens,” he said.

So should we believe President Trump when he says that those currently receiving Social Security benefits are safe? yes. Almost certainly, those receiving checks now will not see their amounts go down during President Trump’s term.

But doing nothing about Social Security for the next four years could be the worst outcome. Workers in their 40s and 50s (and younger) who dream of retirement end up paying into a system they can’t pay back.

What else to read:

Must read: Want to work in the Trump administration? Prepare for the loyalty test.
Next up: Top Syria expert explains Washington’s next move
LA Times Feature: Schiff opposes Biden’s preemptive pardon as Trump threatens to send Biden to prison again

Stay golden,
Anita Chhabria

P.S.: Wildlife photographer Marc Girardeau captures dramatic photos of humpback whales unexpectedly appearing off the coast of Orange County in pursuit of a pod of anchovies. Read the story about it here or check it out See more photos of Girardeau.

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