Will Social Security and Medicare Survive? What Trump’s New Policies Mean for You

In a significant move, President-elect Donald Trump has named Scott Bessent as his choice for U.S. Treasury Secretary. The veteran investor, known for his time at Soros Fund Management, is stepping into a critical role as the nation grapples with economic challenges and debates about the future of key entitlement programs like Social Security and Medicare.

Bessent’s Vision for the Economy

During his Senate confirmation hearing, Bessent unveiled his “3-3-3” economic plan. This strategy aims to achieve 3% economic growth, 3% inflation, and a 3% budget deficit. Central to his plan is the extension of Trump’s 2017 tax cuts, alongside bold new proposals to eliminate taxes on service workers’ tips, overtime pay, and Social Security benefits.

While these measures are designed to provide immediate relief for workers and retirees, Bessent was candid about the challenges facing Social Security and Medicare. He acknowledged that these programs make up a significant portion of federal spending but emphasized that tackling discretionary spending should be the administration’s immediate focus. “The next four years aren’t the time to deal with these entitlements. We need to first get discretionary spending under control,” he stated.

Trump’s Stance on Social Security and Medicare

President-elect Trump has been vocal about his commitment to protecting Social Security and Medicare. On multiple occasions, he has pledged not to cut funding for these programs. “Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security,” he declared in early 2023. This promise was reiterated during a rally in Florida, where Trump assured voters, “I will not cut one penny from Social Security or Medicare.”

Challenges Ahead

Despite these promises, Social Security and Medicare face long-term financial challenges. The Social Security Administration warns that without reforms, the trust funds supporting retirement payments could run out by the mid-2030s. If that happens, benefit reductions of about 17% may be necessary.

Furthermore, Bessent’s proposed tax cuts on Social Security benefits could deepen funding challenges. Experts estimate that such cuts could increase the federal deficit by $1.6 trillion over the next decade, potentially speeding up the depletion of the Social Security and Medicare trust funds.

What’s Next?

As Scott Bessent prepares to lead the Treasury Department, balancing the administration’s tax policies with the need to preserve Social Security and Medicare will be a critical task. His approach will be closely watched, as millions of Americans rely on these programs for their retirement and healthcare needs.