What Is the TRUST Act?

Some experts believe that Social Security funds may soon begin to run short—and many members of the public agree with them. In fact, less than half of the respondents to a recent Quinnipiac poll thought they’d receive a Social Security benefits payment upon retirement. But are they right, and if so, how will the TRUST Act help?

In this article, we’ll examine the TRUST Act in more detail, and we’ll explain what it’s meant to do and how it could affect Social Security futures.

What Is the TRUST Act?

In short, the Time to Rescue United States’ Trusts Act—or TRUST Act for short—is a piece of legislation designed to safeguard major federal trust funds, including those associated with Social Security. The result of a bipartisan bill originally introduced by Senator Mitt Romney (R–UT), the TRUST Act enables the creation of “rescue committees,” which would seek to stop automatic cuts being made to at-risk programs.

Apart from Social Security, which might otherwise run out of money by 2034, at-risk programs include:

• The Highway Trust Fund (HTF)—funding could run out in 2022.
• The Medicare Hospital Insurance (HI) Trust Fund—funding could run out in 2026.
• The Social Security Old-Age and Survivors Insurance (OASI) Trust Fund—funding could run out in 2032.
• The Social Security Disability Insurance (SSDI) Trust Fund—funding could run out in 2035.

Government officials and pundits were very concerned about these programs even before the coronavirus pandemic. When the COVID-19 crisis struck, scores of people filed for Social Security disability and retirement benefits, adding extra pressure to the existing deadline.

How Will the TRUST Act Help?

In itself, the TRUST Act doesn’t change any of the programs it’s meant to protect. What it does do is provide a path to bipartisan cooperation to stop funding cuts. In short, each program will get its own rescue committee, which will include members of both chambers of Congress and both political parties. These committees will write legislation to extend Social Security and other initiatives.

How Will TRUST Act Committee Members Get Selected?

TRUST Act committee membership selection is meant to be a fair, bipartisan process. With that in mind, committee members will get appointed by the “four corners” of Congressional leadership:

Each committee will include an equal number of politicians from both parties and both chambers of Congress. The TRUST Act’s sponsors hope the bipartisan cooperation engendered by carefully balanced committees will produce robust, well-received legislation.

What Will TRUST Act Rescue Committees Talk About?

Simply put, TRUST Act rescue committees will discuss ways to make programs solvent. They’ll talk about where their assigned program’s funds currently come from and where they might come from in the future. In essence, they’ll suggest ways to keep programs solvent.

TRUST Act committees will be set up within 28 days of the law’s enactment. They’d then have a further 180 days—about six months—to produce a report. TRUST Act supporters point out that in the past, congress has waited until the last minute to bail out ailing initiatives, and that this approach would leave beneficiaries of vital programs like Social Security in serious financial trouble.

What Might Happen Without the TRUST Act?

If the TRUST Act isn’t made law and no alternative policies emerge, Social Security retirement recipients could see payments cut by 27% as soon as funds run out. At that point, Social Security retirement benefits payments would equal only the amount of revenue flowing into Social Security—in other words, the program would become fully dependent on real-time contributions made by non-retired younger workers. 

Most economists agree that in the long term, a Social Security benefits payments system based only on incoming revenue won’t work—hence the need for the TRUST Act.

How Can I Boost My Retirement Funds?

If you’re worried about future Social Security insolvency, you’re not alone. Many American workers have already taken steps to boost their retirement funds in light of the crisis. If you haven’t yet contributed to a private pension, for instance, it’s not too late. Speak to your employer to find out more about available employer-sponsored pensions.

If you’re self-employed, private pension options exist for you, too. Some flexible pensions let you pay in variable amounts depending on your freelance or business income.

The Bottom Line on Benefits

Social Security trust fund depletion is very worrying, but it’s important to remember that Social Security retirement benefits will continue to exist, even if the worst happens. Most economic experts suspect that in a worst-case scenario, retired Americans will still receive 73% of the benefits they’d otherwise expect to see.

In the meantime, we’ll continue to monitor the TRUST Act as it passes through the political progress, and we’ll keep you up to date with any changes as they occur.