Social Security changes ahead? Here’s what could happen after the Senate approved Trump’s ‘big beautiful bill’

After weeks of negotiations, the U.S. Senate has passed a version of President Trump’s campaign promises, which he has called “the one big beautiful bill.”

Now, the massive legislative package returns to the House of Representatives for approval—a step that could prove challenging, as changes made by the Senate may cost GOP leaders votes they can’t afford to lose. Republicans currently hold a four-seat majority in the House, and with all Democrats opposing the bill, Speaker of the House Mike Johnson can only afford to lose a three of votes.

How the bill would impact Social Security beneficiaries

As far as Social Security is concerned, the current version would eliminate the taxation of Social Security benefits for retirees. Congress first began taxing these benefits under Republican President Ronald Reagan in 1983. At the time, Democrats controlled the House and Republicans held the Senate, meaning the law required bipartisan support to pass.

According to the Congressional Research Service, about half of Social Security beneficiaries paid taxes on their benefits in 2019, a figure projected to rise to 56% by 2050.

This proportion has grown over time because the income thresholds set in the 1983 law were not indexed to inflation, while Social Security benefits have increased. The legislation specified that single filers with annual incomes under $25,000 and couples filing jointly with incomes under $34,000 would not pay tax. Adjusted for inflation, $25,000 in 1983 would be worth about $82,174 today, and $34,000 would be equivalent to $111,757. Had these thresholds kept pace with inflation, far fewer beneficiaries would be subject to taxation.

In May 2025, the average monthly Social Security check for a retired worker was $1,950 (or $23,400 annually). In 1983, the average was $440.77 per month (or $5,289.24 annually). This indicates that the original thresholds were targeted at incomes significantly above the average. Since those limits haven’t changed, many retirees now find themselves in a position where even average benefits could be taxed in the coming years.

President Trump campaigned on eliminating taxes on Social Security. Still, Congress is constrained by the reconciliation process, which Republicans are using to pass the bill and avoid the 60-vote threshold in the Senate. Under reconciliation rules, no direct changes can be made to Social Security. Still, to honor the campaign promise, the Senate modified the legislation to offer seniors a “bonus” to their standard deduction.

The Committee for a Responsible Federal Budget found that the extension of the 2017 tax cuts, along with the new bonus—set to take effect in 2026—would raise the standard deduction for seniors to $47,000. In effect, only seniors with incomes above this level would pay taxes on their benefits. This approach is less regressive, as it supports low- and middle-income beneficiaries while maintaining tax obligations for higher earners.

The impact on the Social Security Old-Age and Survivors Trust Fund

However, the Committee also warned that this change could accelerate the insolvency of the Social Security Old-Age and Survivors Insurance (OASI) trust fund. Researchers estimate that by late 2032, the fund could face severe shortfalls, triggering an automatic 25% reduction in benefits. “We estimate that the extension and expansion of the 2017 tax cuts, the expanded senior deduction, and other OBBBA changes would reduce total taxation of benefits by roughly $30 billion per year,” the Committee reported in June.

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