The budget package signed into law will negatively affect Social Security's financial status, pushing forward the date when full benefits can no longer be paid. The Chief Actuary noted that the income tax provisions in the legislation will significantly impact the program's trust funds. Estimates suggest that the depletion date for the Old-Age and Survivors Insurance Trust Fund is moved up from early 2033 to late 2032, resulting in a deteriorated actuarial balance. Overall, the changes will lead to reduced tax revenue from Social Security benefits starting in 2025.
Treasury Secretary Scott Bessent has identified components of the budget law as a "backdoor way for privatizing Social Security." He emphasizes the potential threat this poses to the program.
Chief Actuary Karen Glenn stated that the budget package signed by President Trump will harm Social Security's finances, advancing the depletion date for full benefits payout.
Glenn's analysis indicates that the reserve depletion date for the Old-Age and Survivors Insurance Trust Fund will shift from early 2033 to late 2032 due to the new tax provisions.
The combined impact of the law's income tax provisions suggests a decrease in tax revenue derived from Social Security benefits, ultimately weakening the financial status of the trust funds.
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