(CNN)- President-elect Donald Trump promised Americans he would lower consumer prices, make health care more affordable and protect Social Security. Now you have to comply.
Concerns about inflation and cost of living were crucial to Trump’s victory in the US presidential election, with 68% of voters saying the economy was bad or at least not good enough, according to a CNN exit poll.
Much of the President’s ability to influence economic policy depends on the approval of Congress. However, when Trump takes office on January 20, he will have to follow through on his promises.
Here are seven ways a future Trump administration could affect your personal finances.
During the campaign, Trump suggested expanding the child tax credit, which provides financial assistance to parents in the form of a tax break. The political platform linked on its website mentions expanding the child tax credit, but does not include much detail.
During Trump’s first term, the Tax Cuts and Jobs Act of 2017 temporarily increased the child tax credit from $1,000 to $2,000. That credit is set to expire at the end of 2025, but with Congressional approval, Trump could extend the 2017 tax cuts or introduce a similar new policy.
Vice President-elect J.D. Vance has suggested increasing the child tax credit to $5,000. Trump has not commented on that proposal.
Maria Castillo Dominguez, certified financial planner and founder of Valoria Wealth Management, told CNN that lending is “crucial” for many households, especially families with young children, to manage the cost of child care.
Trump-Vance transition spokeswoman Carolyn Levitt said in a statement that Trump would fulfill his campaign promises: “The American people re-elected President Trump by an overwhelming margin, giving him a mandate to implement his promises.” Campaign.” Leavitt said. He added, “He will comply.”
The Trump administration is expected to focus on extending the tax cuts introduced by the Tax Cuts and Jobs Act which is set to expire in 2025. The move would require approval from Congress.
Extending Trump’s 2017 tax cuts would reduce taxes by an average of $2,000 in 2026, according to an analysis by the Urban-Brookings Tax Policy Center. However, about half of the tax relief benefits will go to the top 5% of households earning more than $450,000.
For example, according to the Tax Policy Center, increasing the tax cut would save the top 1% of households about $70,000, or 3.2% of their income. By comparison, the tax cut would save middle-income families about $1,000, or 1.3% of their income.
During the campaign, Trump called for ending double taxation of US citizens living abroad, but he has not mentioned the issue much since. Additionally, he has not elaborated on his promise to make auto loan interest tax deductible.
Trump has suggested eliminating the federal income tax entirely in favor of tariff revenue. Alan Auerbach, an economics professor at UC Berkeley, told CNN the proposal makes no financial sense. Tariff revenues are not enough to replace federal income tax revenues, he said. “The numbers don’t work for this.”
According to his political platform, Trump promised to “not cut a dime” from Social Security.
But he has proposed eliminating federal taxes on Social Security, tips and overtime pay. Tax revenue is used to fund federal assistance programs such as Social Security.
According to the Tax Policy Center, eliminating taxes would provide short-term relief, but would defund Social Security, reducing benefits for workers.
According to the Tax Policy Center, households earning $32,000 or less will not benefit from the federal tax cut because most of their Social Security income is not taxed.
Under Trump’s proposal, Social Security fund reserves would be exhausted by 2031, according to a responsible federal budget committee. Additionally, benefits for enrollees will be reduced by 33% by 2035.
Key aspects of the Biden administration’s plan for student loan debt forgiveness are at stake, meaning the Trump administration could be decisive for millions of Americans who are waiting to have their loans canceled.
According to Berkeley’s Auerbach, efforts to forgive student loan debt made by the Biden administration would likely be eliminated under the Trump administration.
Starting in August, some of President Joe Biden’s student loan debt relief efforts were blocked by a Supreme Court decision.
“Republicans are challenging those things in court, largely successfully, and I’m sure the sentiment will be the same in the Trump administration,” Orbach said. “They’re not really interested in providing student loan relief.”
Student loan debt is not mentioned in Trump’s political platform. In his first term, he failed to end the Public Service Loan Forgiveness Program.
Concerns about inflation helped send Trump back to the White House. However, with his proposed policies, inflation could return with a vengeance.
According to the consumer price index, inflation rose to 2.6% in October, the first increase in six months. This growth was in line with expectations, but it was also a sign that the inflation monster had not been completely brought under control.
Trump’s proposals for 10% to 20% tariffs on imports would increase everyday consumer prices, according to a report by the National Retail Federation. For example, $90 sneakers could cost between $106 and $116 with Trump’s proposed tariffs.
Additionally, Trump’s proposal for mass deportations could increase food prices. Auerbach said undocumented immigrants often work in agriculture or food processing, which reflects a labor shortage when deported.
Auerbach told CNN that the president-elect’s massive tariffs and deportation plans could have the most significant impact on personal finances.
“If these things are actually implemented as proposed, the cost of living will increase drastically,” he said.
During the campaign, Trump went back and forth on his approach to replacing the Affordable Care Act (ACA). He has said that he has “a concept of a plan” for health care.
According to its policy platform, the Trump administration wants to “promote choice and competition” and make health care more affordable. However, it does not provide any further details on how it will do so.
Americans enrolled in the ACA could see health care costs rise after a key pandemic tax credit expires at the end of 2025.
As part of the American Rescue Plan Act of 2021, enhanced premium tax credits were introduced to reduce out-of-pocket costs for eligible ACA enrollees. These tax credits were extended through 2025 as part of the Inflation Reduction Act of 2022.
A Republican-led Congress could allow the enhanced individual tax credit to expire, according to KFF, a nonprofit health policy group. According to KFF, the credits save enrollees about $700 per year, and if they expire, about 19.7 million Americans will see increased health care spending.
Sarah Luke, vice president of the Center on Budget and Health Priorities Politics, said, “Future policy proposals would increase people’s costs for health coverage, roll back protections for people with pre-existing conditions and increase the number of people without coverage.” The numbers will increase.” Group of experts.
Regarding Medicare, Trump “will not cut a dime” from the program, according to his political platform.
“I think, at least in the short term, we won’t see major cuts to Medicare benefits,” Orbach said, noting that Trump believes it is a popular program.
Trump’s political platform says his administration will promote home ownership “through tax incentives and support for first-time homebuyers.” It also mentions opening up “limited portions” of federal government land for “new housing construction.” Trump has not elaborated on his plans beyond this in his platform.
The Trump administration will likely reduce bureaucracy to encourage business and real estate development. Berkeley’s Auerbach said housing costs are often influenced more by local regulations than national policies.
Orbach said Trump’s mass deportation plans could reduce the workforce in the construction sector, which would put pressure on an already tight supply of housing and, in turn, drive up prices.
As far as mortgages are concerned, the Federal Reserve’s decisions about where to set interest rates could lead to more affordable rates, Auerbach said. The Fed’s benchmark interest rate sets the cost of borrowing between banks and affects the interest rates consumers pay on loans, credit cards and mortgages.