Social Security's trust fund has been borrowed from by multiple administrations, but the pattern is more complex than one president "borrowing the most"

Social Security does not work the way most people think it does regarding presidential borrowing. The program does not have a separate fund that presidents can tap into like a bank account. Instead, what people often refer to as "borrowing from Social Security" usually means one of two things: the federal government using payroll tax revenue that was supposed to go to Social Security for other spending, or the program's trust fund reserves declining because more money is going out in benefits than coming in through taxes.

The second scenario is what actually happens. When Social Security pays out more in benefits than it collects in payroll taxes in a given year, it draws down its reserve fund. This has occurred during recessions, wars, and periods of high unemployment — times when benefit payments spike while tax revenue drops. No president directly "borrows" from Social Security in the way you might borrow from a savings account. The decline happens automatically when the math does not add up.

The trust fund reserves have declined most sharply during specific historical periods: the early 1980s under Ronald Reagan, the 2008 financial crisis under George W. Bush, and the COVID-19 pandemic under Donald Trump. But attributing this solely to any one president misses how Social Security actually works and what causes reserves to shrink.

Key Takeaways

  • Social Security's trust fund declines when benefit payments exceed payroll tax revenue, which happens during recessions and high unemployment — not because presidents withdraw money.
  • The largest reserve declines occurred during the 2008 financial crisis, the COVID-19 pandemic, and the early 1980s, when unemployment spiked and tax revenue fell.
  • Congress, not individual presidents, sets benefit amounts and tax rates, so responsibility for trust fund changes is shared across administrations and legislative sessions.
  • The trust fund is projected to be depleted around 2034 based on current demographic trends and benefit structures, regardless of which party controls government.

How the trust fund actually declines

Social Security collects payroll taxes from workers and employers and pays those taxes out as benefits to retirees, disabled workers, and survivors. In most years, the taxes collected exceed the benefits paid, and the surplus goes into a reserve fund called the Old-Age and Survivors Insurance Trust Fund (for retirement and survivor benefits) and the Disability Insurance Trust Fund (for disability benefits).

When the opposite happens — when benefits paid out exceed taxes collected — the program draws down these reserves to cover the difference. This is not borrowing in the traditional sense. It is spending down savings. The trust fund was built up during decades when the worker-to-beneficiary ratio was high (many workers paying in, fewer retirees drawing out). As the population ages and that ratio shrinks, the reserves naturally decline.

The trust fund reserves have been drawn down most significantly during periods of economic crisis: the 1983 recession, the 2008 financial crisis, and the 2020 pandemic recession. During these times, unemployment rises (fewer people paying payroll taxes), while benefit claims often increase (more people drawing early retirement or disability). The reserves absorb the gap.

The 2008 financial crisis and trust fund depletion

The largest single-year decline in Social Security's combined trust fund reserves occurred in 2009, during the Great Recession under President George W. Bush and into President Barack Obama's first year. Unemployment peaked at 10 percent in October 2009. Payroll tax revenue dropped sharply because fewer people were working, while benefit payments remained steady or increased as older workers claimed benefits earlier due to job loss.

The Old-Age and Survivors Insurance Trust Fund reserves fell by tens of billions of dollars that year. However, this decline was not caused by any policy decision made by Bush or Obama. It was the automatic result of the economic collapse. Both administrations inherited a system where the worker-to-beneficiary ratio had already been declining for decades due to demographic shifts (lower birth rates, longer lifespans).

By 2021, the combined trust fund reserves had recovered somewhat due to economic growth and higher employment, but the underlying trend remained: more beneficiaries relative to workers, meaning reserves would eventually deplete.

The COVID-19 pandemic and recent trust fund changes

The COVID-19 pandemic under President Donald Trump caused another sharp decline in trust fund reserves in 2020 and 2021. Unemployment spiked to 14.7 percent in April 2020. Payroll tax revenue fell as businesses closed and workers were laid off. Simultaneously, more people filed for Social Security benefits, including early retirement claims.

The trust fund reserves declined by approximately $20 billion in 2021 alone. Again, this was not a policy choice but an automatic consequence of the economic shock. The Biden administration inherited this trend, and reserves have continued to decline as demographic pressures persist.

Congress sets the rules, not individual presidents

It is important to understand that Congress, not the president, sets Social Security's benefit amounts and payroll tax rates. These are legislative decisions made by the House and Senate. Presidents can propose changes, but they cannot unilaterally alter how much people receive or how much workers and employers pay in taxes.

The last major legislative change to Social Security occurred in 1983, when Congress passed amendments signed by President Ronald Reagan. Those amendments raised the payroll tax rate and gradually increased the full retirement age. They were designed to shore up the trust fund for decades. However, demographic changes (people living longer, lower birth rates) have outpaced those adjustments, so the underlying imbalance has returned.

Any future changes to Social Security — whether raising taxes, reducing benefits, or changing may be able to access ages — will require new legislation passed by Congress. No president can make those changes alone.

When the trust fund is projected to run out

The Social Security Administration projects that the combined trust fund reserves will be depleted around 2034, based on current demographic trends and benefit structures. This projection has remained relatively stable for the past decade, regardless of which party controlled the presidency or Congress.

When the reserves are depleted, Social Security will still collect payroll taxes, but those taxes alone will not be enough to pay full benefits. At that point, the program would pay approximately 80 percent of scheduled benefits unless Congress acts to change tax rates, benefit amounts, or may be able to access rules.

This is not a crisis unique to any one administration. It is a long-term structural issue that has been visible for decades and requires legislative action to resolve. Multiple presidents and Congresses have had the opportunity to address it, but the political difficulty of making changes has delayed action.

Frequently Asked Questions

Did any president actually steal money from Social Security?

No. The federal government cannot legally take Social Security payroll taxes and spend them on other programs. Those taxes go directly into the trust fund and can only be used to pay Social Security benefits or administrative costs. What happens is that the trust fund reserves decline when benefits exceed taxes collected, which is an automatic accounting process, not theft or borrowing.

Why does the trust fund run out if people are still paying payroll taxes?

The trust fund is a reserve built up over decades when tax revenue exceeded benefit payments. As the population ages and the worker-to-beneficiary ratio shrinks, that surplus disappears. When reserves are depleted, incoming payroll taxes will cover only about 80 percent of scheduled benefits. Congress would need to raise taxes, reduce benefits, or change may be able to access to close the gap.

Can a president fix the Social Security trust fund problem?

No. Only Congress can change Social Security's tax rates, benefit amounts, or may be able to access rules through new legislation. A president can propose solutions, but cannot implement them alone. This is why the trust fund issue has persisted across multiple administrations — it requires legislative action that has been politically difficult to achieve.

Is Social Security going bankrupt?

Social Security will not disappear, but its trust fund reserves are projected to be depleted around 2034. After that, the program will still collect payroll taxes and pay benefits, but at a reduced level (approximately 80 percent of scheduled benefits) unless Congress changes the law. This is a solvency issue, not a bankruptcy.