Trump vs. Biden: 3 Things We Know About Where They Stand on Social Security

In the photo on the left, President Donald Trump speaks to his supporters during a campaign stop in North Carolina. Democratic presidential nominee Joe Biden speaks to his supports at a campaign stop in Florida. This story goes over what each presidential nominee's plan is for social security.
Left, President Donald Trump speaks during a campaign rally at the Robeson County Fairgrounds in Lumberton, N.C., Saturday, Oct. 24, 2020. Right, Democratic presidential candidate former Vice President Joe Biden speaks at a drive-in rally at Broward College, Thursday, Oct. 29, 2020, in Coconut Creek, Fla. Chris Seward and Andrew Harnik / AP Photo


Social Security has reached a major tipping point: It’s about to start paying out more benefits than workers are paying in. That means the next president faces big decisions about how to address its funding shortfall — yet it’s barely gotten a mention during the presidential debates.

About half of older Americans rely on Social Security benefits for 50% of their income, making it a vital issue for the nation’s most reliable bloc of voters. Here’s what you should know about where President Donald Trump and his challenger, former Vice President Joe Biden, stand on Social Security.

Trump’s Plans for Social Security: 3 Things We Know

Trump hasn’t released a formal plan for Social Security, but here’s what we know based on his past statements and his actions in the Oval Office.

1. Trump wants a permanent payroll tax cut.

In August, Trump ordered a payroll tax holiday, allowing workers who make less than $104,000 annually to keep the 6.2% of their paychecks that typically go toward Social Security for the last four months of 2020. However, the president needs approval from Congress to cut taxes, and Congress hasn’t approved the cut. It’s widely expected that workers who haven’t had Social Security taxes withheld will owe those payroll taxes in early 2021.

When Trump announced the payroll tax break, he said if he wins the election, he’ll extend the cut beyond the end of the year and “terminate the tax.” (Again, he’d need approval from Congress.)

2. … but he hasn’t proposed changing Social Security retirement benefits.

While this promise gave rise to headlines stating that Trump had vowed to terminate Social Security benefits, PolitiFact rated the claim mostly false. Though Trump hasn’t proposed an alternative way to fund Social Security without payroll taxes, he doesn’t want to cut benefits. In fact, he told the AARP that “we will never cut our Social Security. We will guard it with everything we have.”

One possibility that’s been suggested: Congress could replace payroll tax revenue with money from its general fund. That’s what lawmakers did when President Obama cut payroll taxes by 2 percentage points for two years after the Great Recession. It’s unclear whether the shortfall in general funds would be made up through budget cuts, raising other taxes, increasing the deficit or a combination of these.

3. Trump does want to slash SSDI and SSI benefits.

While Trump doesn’t want to reduce Social Security retirement benefits, he included about $45 billion in cuts to Social Security Disability Insurance (SSDI) and Supplemental Security Insurance (SSI) in his 2021 budget proposal.

Trump has proposed cutting disability benefits by reducing the amount of retroactive benefits a worker can receive from 12 months to six and narrowing the definition of disability. Currently, age can be used as a factor to qualify a worker for disability benefits if they’re at least 50. The administration has suggested increasing the age requirement to 55. Trump has also proposed various changes that would make it harder to receive SSI benefits, which go to low-income families.

Biden’s Plans for Social Security: 3 Things We Know

Biden has proposed the following changes to Social Security benefits.

1. Biden would raise Social Security taxes on high earners.

Biden would continue collecting payroll taxes at the same rate for workers who earn less than $400,000. But people earning above that amount could see their taxes go up. Workers currently pay Social Security only taxes on the first $137,700 of income. (In 2021, it will increase to $142,800.)

Biden wants to impose the 6.2% Social Security tax on incomes above $400,000. Earnings between $142,800 and $400,000 still wouldn’t be subject to the tax. However, he wouldn’t increase the benefits for workers with high incomes. The maximum income that would be used to calculate future benefits would still be $142,800, no matter how much you’d be taxed.

2. Biden would give some recipients higher benefits.

Biden proposes increasing benefits for several groups of people. He’s calling for:

  • A minimum benefit of 125% of the federal poverty line for people who worked at least 30 years.
  • Increasing payments for surviving spouses to a maximum of 75% of the couple’s combined benefit.
  • Increased payments for people who have received benefits for at least 20 years to help those who may have exhausted their retirement savings.

3. He wants to change how COLAs are calculated.

Social Security cost of living adjustments are calculated using the Consumer Price Index for Urban Wage Earners and Clerical Earners, or CPI-W. But because the CPI-W only measures costs for households with at least one person working, it doesn’t reflect the cost increases that retirees actually face. For example, seniors spend a higher percentage of their incomes on medical expenses than working-age people, so rising health care costs affect them more.

Biden proposes determining Social Security COLAs using a different measurement called the Consumer Price Index for the Elderly, or CPI-E, which is designed to measure changes in living costs specifically for people 62 and older. But switching to the CPI-E wouldn’t drastically increase COLAs. Using the CPI-E vs. the CPI-W would yield COLAs that are about 0.25 percentage points higher on average. Social Security recipients are getting a 1.3% raise in 2021; using the CPI-E would have yielded a COLA of about 1.55%.

Why Social Security Matters to You

It’s tempting not to think about your future Social Security, especially if you’re a younger voter. But despite the scary projections about Social Security depleting its funds, you can expect benefits to be around for you.

If Social Security burns through its reserves, it will still take in enough to pay roughly three-quarters of the benefits it’s promised through payroll taxes. Even if the president wants to do away with payroll taxes, it’s highly unlikely that Congress would sign off. But some big decisions will need to be made that could determine how much you pay in taxes and how long you have to work before you retire.

No matter which candidate’s stance you prefer, make sure you cast your ballot this Nov. 3 — or earlier. Your retirement depends on it.

Robin Hartill is a certified financial planner and a senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]