Dem
51
GOP
49
One area in which Reagan (and old-style Republicans) differ with Donald Trump is Social Security (and Medicare). Traditionally, the Republican view has always been the Social Security program should be abolished and people should save for their own old age, possibly with some government incentives. After he was reelected in 2004, George W. Bush's first big push was to privatize Social Security. It didn't go well. When Paul Ryan was speaker of the House, he tried to kill Medicare and replace it with private insurance plus a high-risk pool (Ryancare). That didn't go well either.
The drive to get rid of Social Security comes from the big donors, who don't like paying FICA taxes. Trump's instincts tell him that his supporters don't want to let the government get its grubby fingers on Social Security (and Medicare). There will inevitably be a fissure within the Republican Party that Democrats will exploit to the hilt. They are already preparing to attack Sen. Rick Scott (R-FL) for calling for all laws (including Social Security and Medicare) to automatically sunset after 5 years. Mike Pence is also a proponent of weakening Social Security. Ron DeSantis and Nikki Haley haven't taken sides yet, but they are going to have to, sooner or later.
No one denies that under the current law, the Social Security trust fund will be empty in 10 to 20 years, although estimates differ on when. Then payments will have to be made from the incoming FICA stream, which would cover only 80% of the payments, so something is needed. The fight is about what. Democrats are largely united in raising the cap above which there is no FICA tax from $160,200 to something much higher. Republicans are divided. Some want to privatize the program entirely, some want to raise the retirement age, and some want to cut payments. Trump wants to pretend there is no problem and do nothing until his second term in office is over.
The battle over what to do with Social Security could become the defining issue of the GOP primaries. If Trump says "don't touch it" and some or all of the others want to meddle with it, that will help Trump with seniors, a major piece of the Republican base. The problem for the Republicans is that they want a balanced budget and it will be impossible to achieve if Social Security, Medicare, the military, and new taxes are all off the table. Just yelling "cut waste and fraud" probably won't cut it, as Democrats will demand to know precisely where the cuts will be if a large fraction of the federal budget is off the table. It will be interesting to see how this plays out.
It is never talked about, but there is a whole other piece of the puzzle that is actually relevant. Programs like IRAs and 401(k)s are also part of the retirement system. They cost the government money because they have tax savings for the account owner. If those tax advantages were abolished and those accounts converted to normal savings and brokerage accounts with no tax advantages over normal savings and brokerage accounts, the federal government would collect over $370 billion a year in new revenue and states would also get more tax revenue. That revenue could be put into the Social Security pot. The reason this alternative is not on the table is that these programs strongly favor upper middle class and wealthy people and they are not keen on losing what is essentially a government subsidy. (V)