One of the hallmarks that set the Social Security Administration apart from other government programs was its sedulous avoidance of anything resembling partisan politics. That was a key to its overwhelming popularity among Americans.
Apparently, those days are over.
The change occurred July 3, when the agency sent an email to millions of beneficiaries headlined “Social Security Applauds Passage of Legislation Providing Historic Tax Relief for Seniors.” It reproduced the email as a press release on its website.
It was unprecedented for SSA — an agency that historically has avoided politics — to take a political ‘victory lap’ on Trump’s behalf.
— National Committee to Preserve Social Security and Medicare
The reference was to the budget bill that had received final congressional passage that day, and was signed by President Trump on July 4. The message text said the agency was “celebrating the passage of the One Big, Beautiful Bill, a landmark piece of legislation.”
It said the measure “ensures that nearly 90% of Social Security beneficiaries will no longer pay federal income taxes on their benefits, providing meaningful and immediate relief to seniors who have spent a lifetime contributing to our nation’s economy.”
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A few things must be noted about this message. One is that it’s a massive breach of norms for the agency. “It was unprecedented for SSA — an agency that historically has avoided politics — to take a political ‘victory lap’ on Trump’s behalf,” stated the National Committee to Preserve Social Security and Medicare, “particularly on a bill that endangers the long-term care and nutrition benefits of millions of seniors.” The committee called the message “blatantly political and misleading.”
But that’s only the start of what was wrong with this message.
It was not merely misleading about what’s in the budget bill, but factually inaccurate. The Social Security Administration had to append a correction to its press release, though one hasn’t gone out to those who received it via email — millions of Americans who are either receiving benefits or who signed up for informational updates from the agency (including myself).
“Sending propaganda to the millions on SSA’s lists is unprecedented & dangerous,” Kathleen Romig, a former Social Security official who now performs analyses at the Center on Budget and Policy Priorities, wrote on Bluesky.
Its inaccuracies about the budget bill and its effect on beneficiaries and the program itself, she added, “undermines trust” in Social Security communications, “making people more vulnerable to scams.”
Let’s take a look. Here are the key inaccuracies in the message:
“The new law includes a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries, providing relief to individuals and couples,” it said. “Additionally, it provides an enhanced deduction for taxpayers aged 65 and older, ensuring that retirees can keep more of what they have earned.”
To begin with, it’s the “enhanced deduction” for taxpayers 65 and older that “eliminates federal income taxes for most beneficiaries.” In other words, the agency implied that two provisions of the budget bill reduce taxes for seniors, when in fact there’s only one. The agency corrected the press release July 7, so that the second sentence now reads, “It does so by providing an enhanced deduction for taxpayers aged 65 and older.” (Emphasis mine.)
Moreover, as labor economist Teresa Ghilarducci observed at Forbes, “the bill doesn’t do anything directly to Social Security.” A provision that would have specifically exempted Social Security benefits from taxes was dropped from the bill when it came under consideration by the Senate.
The claim that beneficiaries will “no longer pay federal income taxes on their benefits” is also inaccurate: The enhanced deduction — $6,000 for single filers, $12,000 for couples — will expire in 2028, unless it’s extended by Congress. It’s also limited by income: The full deduction is available only to singles up to $75,000 in income, $150,000 for couples. The deduction phases out above those levels, zeroing out for singles with $175,000 in income or higher, $250,000 for couples.
The deduction applies to all income, not just Social Security.
Like so much else in the budget bill, the tax break as it might apply to Social Security benefits goes mostly to wealthier taxpayers. That’s because of the way Social Security benefits are taxed.
The tax calculation is based on “modified adjusted gross income,” or modified AGI — the adjusted gross income (AGI) reported on the taxpayer’s tax return, plus certain tax-exempt income and half of Social Security benefits received. For individuals with modified AGI less than $25,000 and $34,000 ($32,000-$44,000 for couples), up to 50% of Social Security benefits are subject to tax, at the taxpayer’s normal tax rate. For those with modified AGI over $34,000 (over $44,000 for couples), up to 85% of benefits are taxable.
For individuals with modified AGI less than $25,000 (for couples, $34,000), Social Security benefits aren’t taxable. As a result, the lowest-earning 20% of beneficiaries (those with incomes of $63,000 or less) pay an average tax of 1% of their benefits, according to Paul Van de Water of the Center on Budget and Policy Priorities. The tax bite rises sharply for those with higher incomes; for the richest 20% — those with incomes higher than about $205,000 — the tax bite has averaged about 20% of benefits. They’re the people who will gain the most from the tax provisions in the budget bill.
The Social Security Administration’s email and press release quoted its newly-minted commissioner, Frank Bisignano, as stating that “by significantly reducing the tax burden on benefits,” the budget bill “reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
That’s exactly wrong. The reduction of taxes on benefits will weaken, not protect, Social Security (and Medicare too). The reason is that about 60% of the revenues generated by those taxes is credited to the Social Security trust funds. The rest goes to Medicare.
In 2025, that sum is expected to come to about $60 billion for Social Security, or more than 4% of the program’s overall income, and $40.7 billion for Medicare, or nearly 9% of the funding for Medicare Part A, which covers hospital services. The budget bill has no provision for replacing that money.
The reduction won’t be trivial. According to an estimate by the Committee for a Responsible Federal Budget, a think tank of deficit hawks, the tax reduction will pare that income by about $30 billion a year. That’s enough, the committee says, to accelerate the exhaustion of the programs’ trust funds, or reserves, by a year or more, bringing that projected point for Social Security to 2032 from 2033, and for Medicare from late 2033 to mid-2032.
Both programs may have to be shored up fiscally sometime in the next decade to avoid benefit cuts; the budget bill will make that process harder.
Bisignano, in the press release, lauded the budget bill as “a historic step for America’s seniors.” The devilish details make plain that it’s nothing of the kind, since what’s granted to seniors in the next year or two may have to be recovered later.
His predecessors as Social Security commissioner generally treated the program as a sacred trust, with bipartisan support. The flawed, partisan message shows that the current administration doesn’t care enough about that trust to make sure that its communications with its beneficiaries and the public meet the highest standards, as millions of Americans had come to expect.
