Social Security beneficiaries are accustomed to getting occasional emails from the program about matters like a benefits statement, but many were perplexed to get a different kind of message from the Social Security Administration late in the evening on Thursday, July 3.
“The Social Security Administration (SSA) is celebrating the passage of the One Big, Beautiful Bill, a landmark piece of legislation that delivers long-awaited tax relief to millions of older Americans,” the email, reviewed by USA TODAY, said. The message is referring to the legislative package of Trump’s priorities for cuts to taxes and spending on social programs that was passed by the House of Representatives earlier that day.
The agency also published a news release titled “Social Security Applauds Passage of Legislation Providing Historic Tax Relief for Seniors” that mirrored the email.
Issuing an overtly political statement is unusual for the agency that oversees Social Security, which makes monthly payments to 73 million retirees, their survivors, and people with disabilities.
“It’s completely unprecedented,” said Alex Lawson, executive director of Social Security Works, a left-leaning advocacy organization focused on retirement benefits. “It’s an enormous breach of trust.”
Lawson contends that the email praising Trump’s “Big, Beautiful Bill” violates the Hatch Act, a law against partisan political activity by federal government employees.
The Social Security Administration did not immediately respond to inquiries seeking clarification. The White House referred USA TODAY’s request to SSA.
A tax cut for some seniors
During his campaign, Trump promised to eliminate income taxes on Social Security benefits. Instead, the just-passed bill − which Trump will sign in the late afternoon on July 4 − creates a $6,000 federal income tax deduction for Americans 65 and older.
Since Social Security benefits are often a large part of seniors’ income, some portion of those benefits will now be untaxed for those who qualify for the deduction.
“It reduces the amount of Social Security benefits subject to tax, but it’s not just for Social Security,” explains Garrett Watson, senior policy analyst at the Tax Foundation, a center-right think tank.
“This is a historic step forward for America’s seniors,” said Social Security Commissioner Frank Bisignano, a former Wall Street executive appointed by Trump. “For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans. By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
There are many Social Security recipients and seniors who won’t get a tax cut, however.
About 5% of retired Social Security beneficiaries are ages 62 to 64.
There are also deceased workers’ survivors and disabled workers who are younger than 65.
Among those 65 and older, many have incomes below the standard deduction of $14,600 per person or $29,200 per couple, so they already aren’t paying income taxes anyway.
At the other end of the spectrum, the deduction phases out for individuals making more than $75,000 or couples earning more than $150,000.
Less benefit for those with lower incomes
“Lower-income earners benefit less than middle and upper-middle income households,” Watson said.
On average, seniors in the bottom 20% income will save just 0.1% on their tax bill, according to the Tax Policy Foundation’s analysis, about one-tenth of what those in the middle of the income distribution will save.
“It’s been marketed as tax relief for seniors, but a lot of seniors are going to be surprised when they find out it doesn’t apply to them,” Watson said. “I’m getting asked all the time by folks what this actually means for their tax situation.”
Social Security’s long-term funding problem
And while some will soon benefit from lower taxes, the lost tax revenue could trigger a future automatic benefit cut for all beneficiaries.
That’s because Social Security benefits aren’t taxed like normal income. Instead of being used as general revenues, they go specifically into the trust funds that provide a backstop for Medicare and Social Security.
The Social Security and Medicare Hospital Insurance trust funds were on track to be depleted by 2033, but now that date will be moved up to 2032, because the senior citizen tax deduction will lop an estimated $30 billion per year off the tax revenues those trust funds collect, according to the Committee for a Responsible Federal Budget. That, in turn, will trigger a future automatic benefit cut of 24% to all recipients, the centrist think tank projects.
Those problems will only grow worse, Watson noted, if Congress renews, increases or makes permanent the senior tax deduction, when it expires in 2028.
“It’s a mixed bag for seniors, because some seniors will get some tax relief; the cost of that, though, is borne by the entire Social Security system,” Lawson said.
Email comes amid customer-service ‘crisis’
Critics are pouncing on the message arriving at a time when the Social Security Administration has been suffering from problems with customer service.
The Trump administration has reduced the agency’s staff and instituted new rules on identification for applicants, resulting in average wait times that have ballooned to 90 minutes.
In June, the agency stopped making public real-time performance metrics about how long they will have to wait to reach a live person on the phone, and how long applications for new benefits take to be approved, USA TODAY reported on June 26. Multiple times, USA TODAY reporters called Social Security’s 1-800 line they did not reach a live person before the line disconnected with no warning.
Contributing: Sarah D. Wire
This article originally appeared on USA TODAY: Unusual Social Security Administration email touts Big, Beautiful Bill
