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President Donald Trump Has Dug a Nearly $169 Billion Hole for Social Security

March 28, 2026 — 07:56 am EDT

Written by

Sean Williams for

The Motley Fool->

Key Points

- Although Social Security is in no danger of bankruptcy or insolvency, its financial outlook has been deteriorating for decades.

- President Trump's flagship tax and spending law is expected to constrain Social Security's primary income stream and potentially speed up the timeline to sweeping benefit cuts.

- However, ongoing demographic shifts are primarily responsible for the program's financial shortcomings.

- The $23,760 Social Security bonus most retirees completely overlook ›

In February, more than 70 million people collected a Social Security benefit check, 54 million of whom are retired workers. For many of these retirees, Social Security income isn't a luxury -- it's nothing short of a necessity.

According to 24 years of annual surveys from Gallup, 80% to 90% of retirees rely on their monthly benefit, in some capacity, to make ends meet. These polls demonstrate how imperative it is for lawmakers, including President Donald Trump, to strengthen Social Security's foundation for current and future beneficiaries.

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Unfortunately, Trump's flagship tax and spending law, the "big, beautiful bill," has dug an even deeper hole for America's foremost retirement program.

President Trump delivering remarks. Image source: Official White House Photo by Joyce N. Boghosian.

Social Security's long-term financial outlook has been deteriorating for decades

Since the first Social Security retired-worker benefit check was mailed in January 1940, the Social Security Board of Trustees has been publishing annual reports detailing the current and forward-looking financial health of this leading social program.

The Trustees Report allows anyone to track how Social Security generated every dollar of income the previous year, as well as trace where those dollars ended up. However, the Trustees' short-term (10-year) and long-term (75-year) forecasts often command more attention.

On the one hand, the Trustees Report has been cautioning of a long-term funding obligation shortfall since 1985. Put simply, projected income collected over the 75 years following a report is believed to be insufficient to cover outlays (mostly benefits, but also administrative expenses to operate Social Security). The 2025 Board of Trustees Report estimates that this long-term unfunded obligation has swelled to $25.1 trillion.

But this isn't the biggest concern for Social Security or its beneficiaries. The more immediate issue is the projected exhaustion of the asset reserves for the Old-Age and Survivors Insurance trust fund (OASI). The OASI is responsible for doling out monthly benefits to retired workers and the survivors of deceased workers.

According to the 2025 Trustees Report, the OASI's asset reserves -- excess income collected since inception that's invested in special-issue, interest-bearing government bonds, as required by law -- are expected to be depleted by 2033.

It's important to note that the OASI doesn't need a penny in its asset reserves to continue making payments to eligible beneficiaries. Social Security is in absolutely no danger of bankruptcy, insolvency, or halting benefits for current or future retirees.

However, the depletion of the program's asset reserves would signal that the existing payout schedule, inclusive of cost-of-living adjustments (COLAs), isn't sustainable. If the Trustees' forecast is accurate, retired workers and survivors of deceased workers could see their monthly checks slashed by up to 23% in seven years.

The OASI's asset reserves may be gone by 2033. US Old-Age and Survivors Insurance Trust Fund Assets at End of Year data by YCharts.

Trump's flagship tax and spending law just made Social Security's funding hole even deeper

You might be wondering how President Trump fits into all of this. The answer lies with the signing of his flagship tax and spending law on July 4, 2025.

For some Americans, the big, beautiful bill means extra cash in their pockets. While this is far from a comprehensive list, the most impactful piece of legislation passed during his second, non-consecutive term:

- Increases the standard deduction for eligible seniors aged 65 and over by $6,000 ($12,000 for those filing jointly) from tax years 2025 through 2028.

- Provides eligible workers with the abili