Key Points
- Social Security trust funds are projected to become insolvent in 2035.
- Unless Congress acts, this will trigger benefit cuts of roughly 17 percent.
- President Trump and Elon Musk have repeatedly claimed that improper benefit payments to dead people and illegal immigrants are a big part of the problem.
- These claims are simply not true. Fraud has virtually nothing to do with Social Security’s pending insolvency.
- To keep social security solvent and available, we need Congress to work together to adopt bipartisan solutions.
In Depth
Social Security reform is both necessary and urgent. Americans are living longer and having fewer children. That means there will be fewer workers to support each beneficiary in the future. The program’s trustees estimate that the combined Social Security and Social Security Disability Insurance trust funds (OASDI) will become insolvent in 2035. Incoming revenues at that time would be sufficient to cover just 83 percent of scheduled benefits, leading to across-the-board benefit cuts of 17 percent, absent corrective actions.
President Trump and his top efficiency advisor, Elon Musk, have repeatedly claimed that the Social Security trust fund is being drained by improper benefit payments to dead people and illegal immigrants. Both claims are demonstrably false and have been debunked by Social Security experts of diverse ideological perspectives. These assertions make it seem like there are huge savings to be had through eliminating fraud, waste and abuse. But the only way to prevent automatic benefit cuts is through hard-nosed reforms to address this funding shortfall.
Be that as it may, Musk, in a Fox Business interview last week with Larry Kudlow, said there were 20 million dead people in the Social Security database, leaving the false impression that all these dead people (presumably fraudsters) were still drawing benefits. But, as acting Social Security Commissioner Lee Dudek has made clear, “The reported data are people in our records with a Social Security number who do not have a date of death associated with their record. These individuals are not necessarily receiving benefits.”
Last week, Concord Coalition Chief Economist Steve Robinson explained, ”the real story is outdated recordkeeping methods, not benefit fraud.”
“We know where the money is going,” Robinson wrote. “The numbers are posted on SSA’s website. As of December 2023, there were 73,815 Social Security beneficiaries aged 100 or older. Thus, the claim that millions of centenarians and supercentenarians are collecting Social Security benefits is simply not true.”
Musk also told Kudlow that entitlement benefits, which include Social Security, are a way Democrats “attract and retain illegal immigrants by essentially paying them to come here and then turning them into voters…if we turn off this gigantic money magnet for illegal immigrants, then they will leave.”
Illegal immigrants do not qualify for Social Security benefits. In fact, the evidence is pretty clear that they end up being a net plus for the system.
As Robinson explained in a 2024 blog:
“The impact of immigration on Social Security and Medicare does not depend on the number of people crossing our border, but rather on the age, earnings, family composition, and legal status of those who work, pay taxes, and collect benefits – or not. Illegal workers and temporary visa holders who pay taxes, but never collect benefits, provide a financial boost to these programs.
Individuals who are not authorized to work often obtain employment using fake IDs and phony Social Security numbers (SSNs). Because they do not have a valid SSN, when their employer files taxes with the IRS, their wages are posted to the earnings suspense file (ESF) maintained by the Social Security Administration (SSA). The ESF records the wages of workers who do not match SSA’s records. According to SSA, the ESF increased by $140 billion in 2022. These wages account for $21 billion in payroll taxes. Thus, unauthorized workers pay for benefits they will never receive, unless they eventually obtain legal authorization to work in the United States.”
Congress and the President have previously acted in a bipartisan manner to address the financing shortfall facing Social Security, most recently in 1983. They must undertake such an effort again. Fraud has virtually nothing to do with Social Security’s pending insolvency. Pretending that it does diverts attention from the real problems and dangles the illusion of an easy fix.
As stated in the 2024 Social Security Trustees report, “Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than later will allow consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”
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