Trump’s tax law widens Social Security deficit by $169 billion

The Big Beautiful Bill, signed into law in July 2025, is projected to increase costs for Social Security trust funds by $168.6 billion between 2025 and 2034. The Social Security Administration's Office of the Actuary determined that temporary tax breaks in the legislation reduce the income subject to the 12.4% payroll tax, which serves as the program's primary funding source.

According to the 2026 Trustees Report, the Old-Age and Survivors Insurance trust fund is projected to exhaust its asset reserves by the fourth quarter of 2032. This timeline is one quarter earlier than previous estimates, which had projected depletion in the first quarter of 2033.

The report estimates that sweeping benefit cuts of 22% will be necessary for retired workers and survivors in six years if current funding levels persist. While the $168.6 billion increase is a fraction of the program's estimated $29.3 trillion long-term unfunded obligation, it accelerates the depletion of reserves that support monthly benefits and cost-of-living adjustments.

Read the full story at fool.com.