Some supporters of the program fear Social Security is headed toward privatization as the agency sluggishly approaches insolvency and the so-called Department of Government Efficiency focuses on it with keen insight.
Due to “DOGE,” the Social Security Administration is currently undergoing significant adjustments, such as budget cuts, workforce reductions, and a shift to online or in-person visits for some services. According to experts, these and other changes could gradually undermine customer service, damage benefits, and erode consumer trust to the point where the federal government decides to transfer the program to the private sector.
“You get them to ask, ‘What is the original purpose of Social Security? “If the government can’t do its job, why don’t we have a private system?” asked Jason Fichtner, who served as the SSA’s interim deputy commissioner under both Presidents George W. Bush and Barack Obama.
Several times, President Donald Trump has declared that he will not make any changes to Social Security. However, Elon Musk, the CEO of Tesla (TSLA), who is in charge of DOGE, has called the program a “Ponzi scheme” and claimed that his team was searching the federal government for “fraud, waste, and abuse,” particularly in entitlement programs—a technical term for programs that require mandatory spending, like Social Security and Medicare. Although Musk and Trump have not publicly mentioned privatizing the program, experts warn that the actions Musk and DOGE are doing could jeopardize the program’s continued existence as a government agency.
Security Security is already operating effectively, according to analysts. According to Kathleen Romig, head of Social Security and disability policy at the progressive think tank Center on Budget and Policy Priorities, it has a 99.7% accuracy rate and has always paid benefits. According to her, the algorithm recovers the majority of the remaining 0.3%, which consists of errors like overpayments. (The agency recently changed the overpayment clawback policy from 10% of beneficiary checks to 100%, which was in place under the Biden administration.)
According to Romig, Social Security’s overhead costs amount to about 0.5 percent of the program. According to the SSA, Social Security distributed over $1.4 trillion in disability, survivors, and old-age insurance benefits last year. The program’s administrative costs for those components came to just over $7 billion, she said.
However, the Trump administration has stated that it is seeking ways to make improvements. Under the direction of DOGE and acting commissioner Leland Dudek, the agency announced in the past month and a half that it was reducing its workforce from 57,000 to 50,000 employees, cutting information technology spending, downsizing regional and field offices, and shifting some telephone services, like identity verification, to online or in-person visits.
According to analysts, the program is already under stress from the modifications that are currently underway. With buyouts of up to $25,000, the government has used voluntary separation as one tactic to entice employees to quit. The funds are due to the approximately 2,500 employees who consented, and they have until April 19 to vacate. With a deadline at the end of the year, the SSA is also giving employees the choice to retire early.
There will be fewer workers available to answer phones or personally meet with claimants as a result of this overall personnel reduction. Additionally, the agency offered employees the chance to transition from non-mission-critical roles to “a local field office, teleservice center, processing center, payment center, workload support unit, or hearing office,” which more than 2,200 employees accepted. According to the SSA, they will be trained.
Meanwhile, according to SSA’s performance records, wait times and callback times for Social Security’s 800-number have been increasing recently (with a minor decrease from January to February), and the agency is now requiring beneficiaries to call to schedule appointments prior to visiting an office.
Martin O’Malley, a former Social Security commissioner who worked under the Biden administration, has cautioned recipients that these changes may affect benefits in addition to customer service. “Most of the actions necessary to create a total system collapse of the Social Security Administration have been taken,” O’Malley stated earlier this month at a meeting of the National Academy of Social Insurance, or NASI.
“This is just really going to get worse,” Romig stated. “It’s bad now.”
What privatization might entail
There have been discussions about privatizing Social Security in Washington before. In the past, those conversations have entailed investing the benefits itself. For example, during the administration of George W. Bush, a commission that studied Social Security proposed setting up individual accounts where a portion of the benefits would be put in the stock market. That plan never materialized and isn’t being addressed at the moment.
According to experts, the contemporary approach to privatization Social Security may involve first outsourcing the agency’s duties.
“This situation is only going to worsen.” Kathleen Romig, the Center on Budget and Policy Priorities’ director of disability and Social Security policy
According to a tape ProPublica received, acting commissioner Dudek discussed a variety of ways to change the agency during a closed-door meeting, including outsourcing customer support.
such the majority of government agencies, SSA has previously employed contract workers, but not for the most crucial aspects of the program, such customer service.
“That would be challenging,” Fichtner said.
“It takes a long time to train someone,” he stated. He pointed out that increasing the program’s personnel through automation or other system-improving initiatives is one area where outsourcing can make sense. He did caution, though, that “it is not a replacement.”
But the agency is at a turning point. The agency is currently lowering the number of its offices and laying off 12% of its workers, but it is also moving some services to online or in-person visits alone.
For example, when SSA stated in March that it was shifting identification verification to online and in-person visits, some claim this will burden the elderly and disabled who lack internet access or have difficulty traveling to a physical place. Although claimants can begin the process over the phone, it won’t be deemed finished until they complete it in person or through their “My Social Security” account.
In its announcement, the Social Security Administration stated, “The updated measures will further safeguard Social Security records and benefits against fraudulent activity.”
This would eventually “undermine public support for this agency,” according to Maria Freese, senior Social Security specialist at the National Committee to Preserve Social Security and Medicare, because it will make it harder for beneficiaries to do everyday tasks. ‘Obviously the public sector doesn’t work, we have to privatize all the duties of the agency and then privatize the benefits too,’ the Republicans, especially those who have advocated for decades for privatization, might say in step two. You’d be better off if you placed it in the stock market nonetheless.
A request for comment on outsourcing, the program’s status, and critics’ worries about a privatization scheme was not answered by DOGE.
Some claim that a closer examination of the administration’s actions indicates they are not intended to pave the way for privatization. “Unusual position for a Republican,” according to Andrew Biggs, senior fellow at the right-leaning think tank American Enterprise Institute, is Trump’s promise not to reduce Social Security benefits.
The president has not attempted to raise the retirement age, despite previous suggestions from Republican leaders to do so. “Secretly trying to privatize Social Security, when he’s going out of his way to do the opposite of that, is not very plausible,” Biggs stated.
Consumer confidence is declining.
Beneficiaries would experience a 20% reduction in their checks when Social Security’s trust funds, which the agency depends on to provide payments, run out of money somewhere in the next ten years. According to Biggs, these recent adjustments won’t help with Social Security’s solvency problem, but “it doesn’t mean you don’t want to run the program efficiently, and I suspect there are efficiencies to be had within the agency.”
Although Congress has never allowed the program to fail, it has gone dangerously close in the past, including in the early 1980s, just before significant reforms were put in place that are now the last significant improvements Social Security has seen.
Workers, particularly the youngest members of the workforce, have questioned if they will receive any benefits upon retirement ever since President Franklin D. Roosevelt signed Social Security into law 90 years ago, yet the program has persisted. According to analysts, Americans will doubt the federal government’s capacity to sustain a program that provides benefits to roughly 69 million retirees, dependents, and handicapped people if enough modifications are made that could undermine the agency.
