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The Countdown

Your government spends $7 trillion a year. The three biggest line items are running out of time.

FY 2025 federal spending totaled $7.0 trillion with a $1.8 trillion deficit. Social Security, Medicare, and interest on the debt now consume 62% of every dollar Washington spends — and two of those programs are heading for automatic cuts.

See the Policy Risk IndexWhat is policy risk?

FY 2025 Federal Spending

Where your tax dollars go

Spending Flow

Social Security: $1,540B (22%)

Social Security

$1,540B (22%)
  • Retirement (OASI) + disability (DI)
  • ~70M beneficiaries
  • Trust fund depletion: Q4 2032
  • Automatic cut at depletion: ~24%
  • Typical retiring couple: ~$18,400/year cut

The average American household depends on Social Security and Medicare for the majority of their retirement income. Both programs are on a deadline.

The Clocks

Deadlines that affect your household

Social Security Trust Fund

~6 years, 6 months

2370
Days
05
Hours
40
Mins
16
Secs

Target: Oct 1, 2032

Projected automatic ~24% benefit cut

SSA Chief Actuary letter (Aug 5, 2025)

Medicare Trust Fund

~6 years, 3 months

2278
Days
05
Hours
40
Mins
16
Secs

Target: Jul 1, 2032

Projected automatic ~11% provider payment cut

CRFB estimate, cross-referenced with CRR

Tax Cuts Expire

~2 years, 9 months

1001
Days
05
Hours
40
Mins
16
Secs

Target: Dec 31, 2028

Temporary deductions sunset by statute

One Big Beautiful Bill Act (P.L. 119-21)

These clocks count down to projected depletion and expiration dates. Congress can act before then — but hasn't yet. See how the current policy environment scores on the Policy Risk Index.

The Big 3

What this means for your money

Social Security's trust fund is projected to run out in late 2032. When it does, benefits get cut automatically. Not by choice. By law.

For a typical couple, that's roughly $18,400 less per year. It doesn't matter how long you've paid in or how much you've earned. The cut hits everyone the same percentage. Congress can fix this — they've done it before, in 1983. But right now, no one is acting.

PRIA tracks how Social Security changes affect your household specifically, based on your income, your age, and your benefits. Create a free account

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Live Index

Policy Risk Index

The Concept

What is policy risk?

Take Action

Policy risk planning

Sources

  • CBO Monthly Budget Review: Summary for Fiscal Year 2025 (October 2025)
  • CBO The Budget and Economic Outlook: 2025 to 2035 (January 2025)
  • SSA Chief Actuary letter to Sen. Wyden (August 5, 2025)
  • 2025 Social Security Trustees Report (June 2025)
  • 2025 Medicare Trustees Report (June 2025)
  • CRFB and CBPP analyses on federal outlays and deficits (2025)

The Policy Context

Why these clocks matter

The Tax Cuts and Jobs Act of 2017 was scheduled to expire on December 31, 2025. Congress acted — the One Big Beautiful Bill Act, signed July 4, 2025, resolved the TCJA sunset by writing the core provisions into ongoing law: tax brackets, the standard deduction, the child tax credit, and the QBI deduction. But the OBBBA also introduced new temporary provisions with their own expiration dates, and the trust fund clocks are still ticking. The policy risk did not go away. It changed shape.

The countdowns on this page track three categories of fiscal deadlines: trust fund depletion dates that will trigger automatic benefit reductions, temporary tax provision expirations that will affect specific households, and spending flows that reveal where the federal government's $7 trillion annual budget actually goes. These are not abstract policy debates. Each deadline has a specific, calculable impact on household finances.

The trust fund math

Social Security and Medicare operate on a trust fund model: payroll taxes flow in, benefits flow out, and any surplus accumulates in dedicated trust funds invested in Treasury securities. For decades, incoming taxes exceeded outgoing benefits, building substantial reserves. That equation has reversed. Both the Social Security OASI trust fund and the Medicare HI trust fund are now drawing down reserves to pay current benefits, and both are projected to be depleted by 2032 according to the 2024 Trustees Reports (the most recent available as of this writing).

Depletion does not mean the programs disappear. Social Security would still collect payroll taxes sufficient to pay approximately 76% of scheduled benefits. Medicare Part A would cover roughly 89% of hospital costs. But the automatic benefit reductions that follow depletion would represent the largest cuts to retirement security in American history — affecting 67 million Social Security beneficiaries and 67 million Medicare beneficiaries simultaneously.

What's permanent vs. what still expires

The OBBBA resolved the TCJA sunset by writing the core provisions into ongoing law — tax brackets, the standard deduction, the child tax credit ($2,200, inflation-indexed), the QBI deduction, and the $15 million estate tax exemption no longer carry expiration dates. But the OBBBA also introduced new temporary provisions with their own deadlines:

  • December 31, 2028: The new OBBBA temporary provisions expire — deductions for tips (capped at $25,000), overtime pay ($12,500/$25,000), the $6,000 senior bonus standard deduction for taxpayers 65+, auto loan interest ($10,000 cap), and the Trump Accounts government contribution. Tax brackets, the standard deduction, and the child tax credit are not affected — they have no expiration date.
  • December 31, 2029: The SALT deduction cap of $40,400 reverts to $10,000. For homeowners in high-tax states like New York, New Jersey, California, and Connecticut, this is a significant change.
  • 2032 (projected): Both the Social Security OASI and Medicare HI trust funds reach depletion, triggering automatic benefit reductions unless Congress has acted.

Where $7 trillion goes

Federal spending in FY 2025 reached approximately $7.0 trillion against $5.2 trillion in revenue, producing a $1.8 trillion deficit. The spending breakdown reveals why fiscal reform is so difficult: the three largest categories — Social Security ($1.5 trillion), Medicare and health programs ($1.6 trillion), and interest on the national debt ($1.05 trillion) — are either mandatory spending that Congress cannot easily cut, benefits that 67+ million Americans depend on, or contractual obligations to bondholders. Discretionary spending, including defense ($900 billion) and all non-defense programs ($750 billion), represents a shrinking share of the total.

Interest on the national debt is the fastest-growing category, having surpassed $1 trillion annually for the first time in FY 2025. At current projections, it will exceed Social Security spending by 2030 and consume nearly 25% of federal revenue by 2035. This is not a future problem — it is a present constraint on every other budget priority.

Personal Impact

What this means for you

The OBBBA established the nearly doubled standard deduction as ongoing law ($32,200 for married couples in 2026, inflation-indexed). That means most middle-income families keep the simplified filing and lower effective tax rates of the TCJA era indefinitely. The remaining risk is on the temporary provisions: families with tipped or overtime income will lose those deductions after 2028, and long-term fiscal pressure could lead to future legislation that changes the rate structure Congress established under the OBBBA.

Legislative History

Timeline: from TCJA to today

  • December 22, 2017: President Trump signs the Tax Cuts and Jobs Act into law. Individual provisions are set to expire December 31, 2025, while the corporate rate cut to 21% is permanent.
  • 2018-2024: The TCJA reduces taxes for approximately 80% of households. The standard deduction nearly doubles, the child tax credit increases to $2,000, and seven tax brackets are adjusted downward. The SALT cap at $10,000 is the most controversial provision.
  • January 2025: Congressional debate begins on extending TCJA provisions. CBO scores full extension at approximately $4.6 trillion over 10 years.
  • July 4, 2025: The One Big Beautiful Bill Act is signed into law. It makes the core TCJA individual provisions permanent (brackets, standard deduction, child tax credit at $2,200, QBI deduction), raises the SALT cap to $40,400 through 2029, and adds new temporary deductions for tips, overtime, and seniors. The bill adds approximately $3.8 trillion to the deficit over its scoring window.
  • January 1, 2026: New OBBBA provisions take effect. The tip and overtime deductions apply for the first time. The $6,000 senior bonus standard deduction takes effect for tax year 2026.
  • 2026-2028: Window for temporary OBBBA provisions. Tax planning during this period should account for the scheduled expiration of tips, overtime, senior deduction, and auto loan interest provisions at the end of 2028.
  • December 31, 2028: Temporary OBBBA provisions expire — tips deduction, overtime deduction, senior bonus standard deduction, and auto loan interest deduction. Tax brackets, the standard deduction, and the child tax credit are not affected — they are permanent.
  • December 31, 2029: The SALT cap of $40,400 reverts to $10,000.
  • 2032 (projected): Both Social Security OASI and Medicare HI trust funds reach depletion under 2024 Trustees projections, triggering automatic benefit reductions.

Related Analysis

Related Policy Risk topics

The countdowns on this page intersect with nearly every area of household financial planning. These related deep dives provide the specific numbers, strategies, and policy context you need:

  • Tax Bracket Changes 2026 — The complete breakdown of 2026 federal income tax brackets, rate schedules, and how the Big Beautiful Bill's extensions compare to pre-TCJA rates.
  • Social Security Changes 2026 — The 2.8% COLA, trust fund depletion timeline, WEP/GPO repeal impact, and SSA workforce reductions affecting claim processing.
  • Cost of Living 2026 — How inflation, housing, groceries, and benefit adjustments are shaping real purchasing power for every household segment.

Frequently Asked Questions

Common questions about federal spending and tax expirations

When does the Social Security trust fund run out?

The Social Security Old-Age and Survivors Insurance (OASI) trust fund is projected to be depleted by Q4 2032, based on the most recent SSA Trustees Report (2024). At that point, benefits would be automatically reduced by approximately 24% under current law, as incoming payroll taxes would only cover about 76% of scheduled benefits. The 2025 Trustees Report has not yet been released and may adjust this timeline.

What happens when Medicare runs out of money?

The Medicare Hospital Insurance (HI) trust fund is projected to be depleted by mid-2032, based on the 2024 CMS Trustees Report. When depleted, payments to hospitals and healthcare providers would be automatically reduced by approximately 11%. This does not eliminate Medicare but reduces what providers are paid, potentially affecting access to care.

When do the 2025 tax cuts expire?

The One Big Beautiful Bill Act (P.L. 119-21) resolved the TCJA sunset by establishing the core provisions as ongoing law — tax brackets, the standard deduction, the child tax credit ($2,200), and the QBI deduction no longer have expiration dates. However, several new OBBBA provisions are temporary: deductions for tips ($25,000 cap), overtime pay, the $6,000 senior bonus standard deduction, and auto loan interest all expire December 31, 2028. The SALT cap of $40,400 reverts to $10,000 on December 31, 2029.

How much does the US government spend per year?

In fiscal year 2025, the federal government spent approximately $7.0 trillion against $5.2 trillion in revenue, resulting in a deficit of $1.8 trillion. The three largest categories — Social Security, Medicare/health programs, and interest on the national debt — account for roughly 62% of all spending.

What is the national debt interest payment?

Interest on the national debt surpassed $1 trillion for the first time in FY 2025, costing approximately $2.6 billion per day. It now exceeds both defense spending and Medicare individually, and is projected to grow as the debt-to-GDP ratio approaches 118% by 2035.

Which TCJA provisions are now established law?

The One Big Beautiful Bill Act removed the TCJA sunset for the following provisions, establishing them as ongoing law: the seven individual tax brackets (10% through 37%), the nearly doubled standard deduction, the child tax credit at $2,200 per child (inflation-indexed), the QBI/Section 199A pass-through deduction, the $15 million estate tax exemption, and the elimination of personal exemptions. The corporate rate of 21% had no sunset under the original TCJA.

Which tax provisions still expire?

The temporary OBBBA provisions expire December 31, 2028: deductions for tips (capped at $25,000), overtime pay, the $6,000 senior bonus standard deduction, and auto loan interest ($10,000 cap). The SALT deduction cap of $40,400 reverts to $10,000 one year later on December 31, 2029. These expirations matter most for tipped workers, hourly employees, retirees 65+, and homeowners in high-tax states.

Should I do a Roth conversion while current rates are in effect?

The OBBBA established current tax brackets as ongoing law, so the original TCJA expiration urgency no longer applies. However, Roth conversions can still be strategic for other reasons: fiscal pressure may lead to future rate increases, the SALT cap reversion in 2029 could change your effective rate, and locking in today's rates protects against legislative uncertainty. Consult a tax professional to model your specific situation.

What does trust fund depletion mean for current retirees?

Trust fund depletion does not mean Social Security or Medicare disappears. When the OASI trust fund is depleted (projected 2032), Social Security would still collect enough payroll taxes to pay about 76% of scheduled benefits. When the Medicare HI trust fund is depleted, hospital payments would be reduced by about 11%. These automatic reductions would be the largest cuts to retirement security in American history, but Congress has strong incentives to act before depletion.

These deadlines affect your household. See exactly how much.

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