Personal Finance

Elon Musk Drops Bombshell on Social Security: ‘Magnitude of Fraud is Staggering’

Christy Bieber

Published: February 12, 2025 2:38 pm

Since President Donald Trump took office and appointed Elon Musk to head up the Department of Government Efficiency (DOGE), Musk and his team have been hard at work rooting out “fraud” and “abuse” throughout multiple government departments. From dismantling USAID to stopping $59 million in FEMA payments alleged to be going to housing undocumented immigrants in luxury hotels, DOGE has been aggressive in looking for spending to slash and programs to cancel.

Now, Musk has set his sights on some of America’s most popular entitlement programs. On February 11, 2025, he tweeted out, “At this point, I am 100% certain that the magnitude of the fraud in federal entitlements (Social Security, Medicare, Medicaid, Welfare, Disability, etc) exceeds the combined sum of every private scam you’ve ever heard by FAR. It’s not even close.”

So, the big question is, is Musk correct and, if so, is DOGE going to be able to put a stop to it?

Is fraud rampant in America’s entitlement programs?

In the same February 8 tweet, he outlined his plans to address this issue and stop the improper payments, including:

• Requiring all outgoing payments to have a categorization code to enable auditing of where the money is going.
• Requiring a rationale for all outgoing payments in the comment field, which currently does not contain any information.
• Implementing the “Do Not Pay” list of entities that are known to be dead, fronts for terrorist organizations, scammers, or who are not meant to receive the funds under Congressional appropriations
• Updating the “Do Not Pay” list weekly, as it is currently updated infrequently.

On its face, these suggestions seem reasonable — and there does seem to be at least some support for the idea that the government is not doing a great job weeding out fraud and abuse. In fact, in August of 2024, the Office of the Inspector General for the Social Security Administration indicated that it had sent out $72 billion in improper payments, including overpayments between 2015 and 2022. And that’s just for Social Security.

However, and this is a big however, these overpayments accounted for less than 1% of total benefits paid during that time. While $72 billion is a big number, the government is always dealing in big numbers. It’s easy to overstate the scope of a problem when you don’t compare the rates of fraudulent payments relative to total spending.

Further, while Musk’s suggestions seem unobjectionable, some have expressed concern over allowing the unelected billionaire access to sensitive private information to audit these entitlement programs. Some commentators and lawmakers have also raised questions about whether Musk and DOGE are miscategorizing spending they don’t like with “fraudulent” spending (particularly in the case of USAID Programs). If that is the case, and that trend continues as Musk shifts DOGE’s focus to entitlements, then it’s possible some people could find themselves with their payments being questioned even if current law says they are owed the money.

Will Musk’s DOGE be allowed to “fix” Social Security?

Musk’s ability to make changes to entitlements also remains up for debate. Federal judges have temporarily halted many of the initiatives put in place by DOGE and the Trump Administration, and, on February 8, 2025, New York Federal Judge Paul A. Engelmayer even imposed a temporary restraining order blocking the Administration from sharing certain Treasury Department information with DOGE.

Both Trump and Musk have called the actions of these judges “lawfare” and argue their rulings are improper and invalid. Appeals are inevitable, and it seems both Trump and his opposition are gearing up for a fight over executive power that’s likely to make it to the Supreme Court sooner rather than later. With Trump having appointed a decisive conservative majority on the court, however, the Court may rule in his favor and give DOGE more leeway — although that remains to be seen.

Ultimately, any major changes to entitlement programs will have to come from Congress, but depending on the Court’s position and the techniques used by DOGE, that doesn’t mean that the current processes will remain in place absent legislative action.

There’s a great deal of uncertainty right now, but one thing is for sure: DOGE is moving fast, is serious about cutting spending, and this Administration is very unlikely to just deliver more of the status quo politics that has become so common surrounding big problems in D.C. Those counting on  Social Security or other entitlements should watch the news carefully to see what directions reforms take so they’ll better understand what changes are coming down the line.