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How Could Elon Musk's DOGE Impact Social Security?

Maurie Backman

Published: December 20, 2024 10:19 am

It’s hardly a secret that government spending has the potential to get out of hand. It’s this line of thinking that perhaps led to the Department of Government Efficiency, or DOGE, an initiative that President-elect Donald Trump has pegged Elon Musk and Vivek Ramaswamy to head up.

Key Points from 24/7 Wall St.

• Social Security is facing benefit cuts in the future due to a financial shortfall.
• Improving efficiencies within the agency could lead to less wasteful spending.
• Musk’s DOGE could help address some of these shortcomings and shore up the program’s finances.

As part of his presidential campaign, Trump pledged that DOGE would not target cuts to Social Security. But that doesn’t mean the program won’t help address some of Social Security’s financial shortcomings.

A shakeup is needed

Social Security is in a dire situation. In the coming years, it expects to owe more in scheduled benefits than it collects in payroll tax revenue as baby boomers retire at full force and start filing claims.

Social Security can tap its trust funds to keep up with its financial obligations — but only for so long. Recent estimates from the program’s Trustees have Social Security’s combined trust funds running out of money in 2035. And while that timeline could wiggle in either direction, the reality is that without lawmaker intervention, Social Security cuts are a distinct possibility in the not-so-distant future.

Where does DOGE come in? At its core, the initiative is meant to target inefficiencies and implement changes that reduce wasteful spending. And that’s something Social Security could really use.

Between 2015 and 2022, the Social Security Administration made almost $72 billion in improper payments (mostly overpayments), according to the program’s Office of the Inspector General. And chances are, a deeper dive will reveal additional wasted spending. For a program that’s toying with benefit cuts, that’s inexcusable.

Does this mean that Musk and company will be able to come to the rescue? Not necessarily. But it’s not unreasonable to think they’ll target Social Security not in the context of making cuts to benefits, but in the context of streamlining processes to avoid overpayments, fraud, and the many other issues the program is plagued with.

Medicare could come under scrutiny, too

It’s not just Social Security that’s at risk of cutting benefits. Medicare benefits, too, are at risk of cuts when its trust funds are depleted. So it’s not unreasonable to think that Musk’s DOGE will attempt to address some of its shortcomings, too.

And for those worried about what that might look like, here’s something to consider. At present, both Social Security and Medicare are on shaky financial ground — and that’s without DOGE getting involved. Bringing Musk and his team into the mix doesn’t read like a huge risk in that context.

Let’s remember, too, that Social Security and Medicare’s respective financial shortfalls aren’t news. The programs’ Trustees have been warning of potential cuts for years, and lawmakers have thus far remained fairly silent on the matter.

But ignoring Social Security and Medicare’s fiscal woes won’t make them go away. So if it takes a hefty dose of DOGE reform to right the ship, that’s not necessarily a bad thing.

Of course, it’s possible that seniors could see further cuts to Social Security and Medicare under Musk’s initiative. Nothing is really off the table at this point. The takeaway, though, is that getting DOGE involved isn’t necessarily going to sound the death knell for these programs.