Core Insights - The article discusses the significant changes to Social Security under President Trump's second term, highlighting both intended and unintended consequences of his policies [1][5]. Policy Changes - The Trump administration replaced the previous 10% overpayment recovery rate with a 50% clawback rate for over 1 million beneficiaries, totaling $23 billion in overpayments as of September 30, 2023 [2]. - An executive order was signed to end the mailing of federal benefit checks, requiring over 500,000 beneficiaries to set up direct deposit or a Direct Express Card for their payments [3]. Economic Impact - Trump's tariff and trade policies have led to a permanent increase in Social Security's cost-of-living adjustment (COLA) due to rising inflation, which increased from 2.31% to 3.01% [12]. - The COLA for 2026 is set at 2.8%, marking the first time in nearly three decades that benefits have risen by at least 2.5% for five consecutive years [14]. Financial Outlook - The "big, beautiful bill" passed during Trump's second term is projected to reduce income collection for Social Security's Old-Age and Survivors Insurance trust fund and Disability Insurance trust fund by $168.6 billion from 2025 to 2034 [18]. - The timeline for the depletion of the OASI's asset reserves has been accelerated from 2033 to 2032, with potential benefit cuts of up to 23% necessary to avoid further reductions over the next 75 years [22].
President Donald Trump's Policies Come With Unintended Consequences for Social Security
The Motley Fool·2025-12-13 23:44