2 Changes President Trump Wants to Make to Social Security. Will 2026 Be the Year They Become Reality?
Key Points
During his campaign, Trump pledged to eliminate the federal income tax on Social Security retirement benefits.
He also floated the idea of funding Social Security using U.S. oil and gas revenue.
At least some progress will be made related to one of those goals next year.
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Donald Trump didn't talk a lot about Social Security when he campaigned for president last year. Since taking office for his second presidential term in January 2025, Trump hasn't made Social Security a top priority, either.
The president has primarily focused on immigration, levying tariffs, extending the tax cuts enacted during his first term, and eliminating what he views as "woke" policies in the federal government. However, that doesn't mean that Social Security hasn't been on his mind at all.
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As a presidential candidate, Trump wanted to make two key changes to Social Security. Will 2026 be the year that they become reality?
President Trump signs executive orders at Mar-a-Lago. Image source: Official White House photo.
Eliminating federal taxes on Social Security benefits
During the 2024 presidential campaign, Trump pledged, "Seniors should not pay taxes on Social Security, and they won't." Currently, around 40% of Social Security recipients (including those receiving retirement benefits or disability benefits) pay federal income taxes on their benefits.
That hasn't always been the case, though. Until 1984, Social Security benefits weren't subject to federal taxes. However, Congress passed a bipartisan plan to bolster the federal program in 1983. This plan, which was signed into law by former President Ronald Reagan, included taxing up to 50% of Social Security benefits and gradually raising the full retirement age to 67.
Trump's plan to eliminate federal taxes on Social Security benefits was politically popular but panned by policy experts. The Committee for a Responsible Federal Budget stated that the move would, among other things, advance the timeframe for Social Security's retirement trust fund running out of money by more than one year. Garrett Watson with The Tax Foundation called Trump's idea "neither fiscally responsible nor sound tax policy."
Increase Social Security's financial stability using oil and gas revenue
Those criticisms of Trump's proposal to eliminate federal taxes on Social Security benefits for retirees made a key assumption: that nothing else would be done to improve the program's financial stability. However, when he was running for a second term as president, Trump floated an idea he believed would put Social Security on a solid financial footing.
In a town hall hosted by Fox News' Sean Hannity in December 2023, Trump said, "You don't have to touch Social Security." He added, "We have such incredible wealth under our feet, that that takes care of everything."
Trump was referring to the oil and gas reserves in the U.S. He pointed to Saudi Arabia as an example of a country that is able to fund government spending without borrowing, thanks to its oil and gas revenue. Trump told Hannity, "We have more oil and gas than they do."
Will these two Social Security changes happen in 2026?
Many retirees who have paid federal taxes on their Social Security benefits won't have to do so in 2026. However, it won't be because those taxes have been eliminated.
Following the passage of the "One Big, Beautiful Bill" in July 2025, the Social Security Administration (SSA) stated, "The bill ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits." That statement isn't entirely true.
A provision in the legislation includes an enhanced tax deduction for Americans aged 65 and older. This tax deduction isn't limited to Social Security benefits. But some retirees who previously paid federal taxes on their Social Security benefits will no longer have to do so beginning next year, thanks to this "senior bonus."
However, the Tax Policy Center (TPC) estimates that most seniors will see a reduction in the federal taxes owed on Social Security benefits rather than those taxes being fully eliminated. Around half of Social Security recipients will still owe some federal taxes on their benefits, according to TPC's analysis. Additionally, the "senior bonus" will expire in 2028.
What about the idea of using oil and gas money to bolster Social Security? The Trump administration hasn't advanced any proposals along those lines so far. It's unlikely, therefore, that Social Security's bleak financial forecast will improve in 2026.
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