As Donald Trump prepares to take office once again, his administration’s economic policies promise to reshape the financial landscape for millions of Americans. Throughout his campaign, Trump pledged to lower consumer costs, make healthcare more accessible, and preserve critical social programs like Social Security. With his inauguration looming, the question remains: how will these promises materialize in practice?

Economic issues were at the forefront of Trump’s return to the White House, as voters expressed deep concern about rising living costs and inflation. According to CNN exit polls, a staggering 68% of voters described the economy as either “poor” or “not good.” While many of Trump’s proposed policies will depend on Congressional approval, the expectations placed upon him are significant as he seeks to deliver on his campaign commitments.

Child Care Support: Expanding Tax Benefits

During his campaign, Trump advocated for increasing the child tax credit as a way to ease financial burdens for families. His 2017 Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000, a provision set to expire in 2025 unless extended. Speculation has arisen that the administration might aim for an even more ambitious expansion, with Vice President-elect JD Vance floating a proposal to increase the credit to $5,000.

The stakes are high for families grappling with the rising costs of childcare. Financial experts like Maria Castillo Dominguez, a certified financial planner, emphasize that maintaining or expanding this credit is vital for working families. However, Trump has not publicly committed to Vance’s proposal, leaving room for debate over the future of this key policy.

Taxes: Relief for Some, Disparity for Others

Trump’s tax policies are poised to build on the foundation of his first term. The extension of the 2017 tax cuts, a central plank of his economic agenda, could deliver an average of $2,000 in tax savings for households by 2026. However, critics note that these benefits disproportionately favor high-income earners. For instance, households in the top 1% of earners could save an average of $70,000 annually, while middle-income families would see only about $1,000 in savings.

Additionally, Trump has floated unconventional ideas like replacing federal income tax with revenue from tariffs, a proposal that economists warn lacks feasibility. Alan Auerbach, a professor at UC Berkeley, cautions that tariffs alone could not generate sufficient revenue to compensate for the elimination of federal income tax.

Social Security: A Fragile Promise

Trump has vowed to leave Social Security untouched, promising to “cut not one penny” from the program. However, his broader tax proposals, such as eliminating federal taxes on Social Security benefits, raise concerns about the program’s long-term viability.

Analyses from organizations like the Tax Policy Center and the Committee for a Responsible Federal Budget suggest that such measures could accelerate the depletion of Social Security’s trust fund. Without changes, reserves could run dry by 2031, potentially leading to benefit reductions of up to 33% by 2035.

Student Loans: Uncertainty Looms

The fate of student loan relief is another area where Trump’s policies could bring significant change. Efforts by the Biden administration to cancel student debt have faced legal setbacks, and a Trump administration is expected to continue opposing broad forgiveness measures. During his first term, Trump showed little interest in addressing student loan debt and failed to end the Public Service Loan Forgiveness program as promised.

For millions of borrowers, the lack of clarity around Trump’s plans for higher education financing means continued financial uncertainty.

Inflation and Everyday Costs

Concerns over inflation, a driving force in Trump’s return to office, could paradoxically worsen under his proposed policies. Plans to impose tariffs of 10% to 20% on imports may drive up prices for everyday goods, with the National Retail Federation estimating a potential 20% increase in the cost of items like athletic shoes.

Similarly, Trump’s plan for mass deportations could exacerbate labor shortages in key industries like agriculture and construction, leading to higher prices for food and housing. Auerbach warns that these measures could substantially increase the cost of living for average Americans.

Healthcare: Affordable in Name Only?

Trump’s healthcare policy remains one of the most ambiguous aspects of his platform. While he has pledged to reduce costs and promote competition, his administration has yet to provide detailed proposals. Key tax credits that have helped lower premiums for millions of Americans under the Affordable Care Act are set to expire in 2025. Without Congressional action to extend these benefits, many families could face rising healthcare expenses.

Sarah Lueck, vice president of the Center for Budget and Policy Priorities, foresees a rollback of protections for people with pre-existing conditions and an increase in the number of uninsured Americans if Trump’s policies proceed unchecked.

Housing: Balancing Growth and Costs

Trump’s platform includes plans to promote homeownership, with a focus on tax incentives and opening federally owned lands for development. While these initiatives aim to address housing shortages, they face potential hurdles. Trump’s deportation policies could exacerbate labor shortages in the construction industry, further straining the housing market and driving up costs.

Interest rates, a key factor in housing affordability, remain under the Federal Reserve’s purview. Trump’s administration will likely influence monetary policy indirectly, but the ultimate decisions on rate adjustments will depend on broader economic conditions.

Final Thoughts

The financial policies of Trump’s administration carry the potential to create sweeping changes across the economic landscape, from taxes and child care to housing and healthcare. While some measures may offer immediate relief to certain groups, others risk widening income disparities and increasing costs for everyday Americans. As Trump prepares to take office, his ability to navigate these complex challenges will define his presidency and its impact on the nation’s financial health.