Why is Elon Musk, the richest man in the world, hyperventilating about Social Security? Why is he inventing unhinged tales about “fraudulent” hordes of Social Security grifters? Why is his “DOGE” chopping away staffers at the already understaffed Social Security Administration?
Let’s start with the political reality that most Americans see Social Security as absolutely essential to their future financial security. These average Americans, Musk and his like-minded super wealthy fear, are eventually going to start demanding that America’s rich pay a far bigger share of the revenue Social Security so desperately needs.
What are these rich paying now into Social Security? Peanuts.
Social Security’s basic math: Employees currently pay 6.2 percent of the money they make into the Social Security system. Their employers match that 6.2 percent. Self-employed Americans, for their part, pay 12.4 percent.
But this funding set-up comes with two incredibly consequential catches that royally benefit our nation’s highest earners.
The first: Only paycheck income faces a Social Security tax levy. Most Americans get the vast bulk of their income from their paychecks. Rich people don’t. Our richest get most of their income from the investments they make with their wealth. This investment income — everything from the profits the rich make selling assets to the stock dividends they collect — faces no Social Security tax.
The second catch: Top corporate executives and other Americans with hefty paychecks only pay Social Security tax on a fraction of their pay. In 2025, all paycheck income over $176,100 will face not a penny of Social Security tax.
The savings our most affluent reap from both these two loopholes can run staggeringly high. Here in 2025, the economist Teresa Ghilarducci points out, at least 229 corporate and banking honchos making above $50 million per year will have essentially “paid all their Social Security taxes for the entire year” before the end of the year’s first morning!
How long can Social Security’s financing continue to go on like this? Not long. Up until recent years, we’ve had many more Americans contributing into Social Security than collecting from it. Today, with seniors making up an ever larger share of our nation’s population, the old ratios are breaking down.
In 2021, as the Social Security Board of Trustees reported last May, the Social Security system’s total annual costs started running higher than the program’s annual income. Come 2035, the trustees would go on to warn, America’s seniors will be collecting only 83 percent of the benefits due them unless Congress acts to set Social Security on a much more sustainable course
The simple solution to this demographic and fiscal challenge? We could move to once and for all end the special Social Security privileges that America’s most affluent continue to enjoy.
Elon Musk and his fellow deep pockets oppose, naturally, this simple solution. Their alternative? Squeeze the Social Security Administration. Cut the agency’s staff. Shut down Social Security offices and limit the services that aging and disabled Social Security recipients can easily access.
Create, in other words, a public Social Security system that no longer works. And, in the meantime, let billionaire-bankrolled politicians push schemes that position privatizing Social Security as the only way to “fix” what ails it.
This gameplan has already begun unfolding.
In late February, DOGE-inspired cutbacks eliminated 7,000 jobs from Social Security’s already depleted ranks. Other cuts are canceling the leases of some 800 Social Security field offices. Last week, the under-the-Musk-gun agency announced new policies that will force elderly and disabled people who’ve been able to verify their ID by phone to visit the distant field offices that remain open.
“The combination of fewer workers, fewer offices, and a massive increase in the demand for in-person services could sabotage the Social Security system,” reflects Max Richtman, the president of the National Committee to Preserve Social Security and Medicare.
“One has to ask,” adda Richtman, “why the world’s richest man — who has received in the tens of billions of dollars in federal contracts — is targeting the agency that helps so many Americans keep their heads above water financially.”
Right-wing lawmakers in Congress, meanwhile, are backing moves to increase the age seniors have to reach to access, without penalties, Social Security retirement benefits. Other right-wingers are laying the groundwork for privatizing Social Security outright.
Can right-wingers succeed with this brazen assault on the financial security of America’s working people? Maybe. President Trump is giving Musk and his gang all the political cover they need, claiming, on the one hand, that nothing about Social Security is going to change while — at the same time — letting Team Musk continue its attack on both Social Security’s image and infrastructure.
But Social Security does still remain — at least for now — the “third rail” of American politics. You mess with Social Security, as the conventional political wisdom goes, you’re going to feel a shock. The task today for Social Security’s defenders: to make that shock for Trump and Musk as sharp as possible.
Equally as crucial: ending the “free pass” on Social Security funding that America’s most affluent have long been enjoying. The dollars that this free pass is costing Social Security have been soaring just as spectacularly as America’s income and wealth has been concentrating.
In 2023, the most recent year with full stats available, some 6 percent of U.S. income earners took home incomes higher than that year’s Social Security tax cap. That 6 percent, economist Teresa Ghilarducci noted earlier this year, would have contributed over $388 billion more into Social Security’s coffers if that tax cap had not been in place.
Those rich who pocketed over $50 million in 2023 paychecks, Ghilarducci also notes, would have paid $3.6 billion in Social Security tax without that tax cap in existence, a payout into Social Security that would have been greater than the total Social Security tax that Americans making under $57,000 — 77 percent of working Americans overall — actually paid that year.
How can we bring some semblance of fairness into how we fund Social Security? We have choices.
Public policy experts at the Brookings Institution last month advanced an approach to overhauling Social Security “intended to appeal to Republicans and Democrats alike.” Their proposal would stabilize Social Security’s finances by increasing the cap on earnings subject to Social Security tax. The new cap would subject 90 percent of all paycheck earnings to that tax and shut down the loophole that lets some business owners now totally escape the Social Security payroll levy.
The Brookings reform would also increase the retirement age for high earners and “strengthen child benefits and protections for Americans with disabilities and the survivors of workers who die.”
Other reformers like Rep. John Larson, a long-time congressional champion of Social Security from Connecticut, are emphasizing the importance of expanding both Social Security’s benefits and tax base. The pending “Social Security Expansion Act” — introduced in the Senate by Bernie Sanders and Elizabeth Warren — speaks to both those goals.
If enacted, notes the bill’s co-sponsor Rep. Val Hoyle from Oregon, this legislation “would expand Social Security benefits by $2,400 a year and ensure Social Security is fully funded for the next 75 years by applying the Social Security payroll tax on all income above $250,000.”
What’s going to happen next in the congressional Social Security debate? Republican lawmakers on Capitol Hill appear likely to become ever more nervous. Elon Musk’s maniacal — and ongoing — attacks on Social Security already have these Republicans exceptionally ill at ease.
“Going after the United States Institute of Peace is one thing, going after Social Security is something entirely different,” notes Rutgers University political scientist Ross Baker. “The ironies of a person of such immense wealth targeting a program that provides a modest benefit to ordinary people has the worst possible aura about it.”
But Musk’s hundreds of billions have the power to buff up any aura. Stopping his assault on Social Security is going to take a national groundswell every bit as sweeping as the 1930s grassroots ferment that created Social Security in the first place.
Sam Pizzigati an associate fellow at the Institute for Policy Studies, has written widely on income and wealth concentration, with op-eds and articles in publications ranging from the New York Times to Le Monde Diplomatique. He co-edits Inequality.org Among his books: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970 (Seven Stories Press). His latest book: The Case for a Maximum Wage (Polity). A veteran labor movement journalist, Pizzigati spent 20 years directing publishing at America’s largest union, the 3.2 million-member National Education Association.
As the hack-and-slash crusade of the “Department of Government Efficiency” picked up steam in early February, the Washington Post editorial board (2/7/25) gave President Donald Trump a tip on how to most effectively harness Elon Musk’s experience in “relentlessly innovating and constantly cutting costs”: Don’t just cut “low-hanging fruit,” but “reform entitlement programs such as Social Security and Medicare before they become insolvent.”
Repeating the “flat Earth–type lie” of looming Social Security insolvency (Beat the Press, 5/8/24) has been a longtime hobby horse of corporate media, as has been reported at FAIR (e.g., 1/88, 6/25/19, 6/15/23) and elsewhere (Column, 8/4/23). While many leading newspapers have rightly called out Musk’s interventions into Social Security and the rest of the administrative state, they still push the pernicious myth that the widely popular social program is struggling and nearing insolvency, with few viable options for its rescue.
‘If nothing changes’
An AP report (2/27/25) on Musk’s staffing cuts at the Social Security Administration, published in and then later taken down from the Washington Post (2/27/25), mentioned that “the program faces a looming bankruptcy date if it is not addressed by Congress.” It claimed that Social Security “will be unable to pay full benefits beginning in 2035.” The New York Times (3/5/25) concurred that the program is “in such dire financial trouble that benefit cuts could come within a decade if nothing changes.”
Such sky-is-falling reporting didn’t start with DOGE’s entry on the scene (e.g., New York Times, 1/26/86, 12/2/06; Washington Post, 11/8/80, 5/12/09). Indeed, the Post was beating this drum loudly after the 2024 Report of the Social Security Trustees was released last May. “Financial reality, though, is that if the programs aren’t reformed, and run out of money to pay required benefits, cuts could become unavoidable,” the Post editorial board (5/6/24) lamented.
These arguments misrepresent the structure of Social Security. In general, Social Security operates as a “pay-as-you-go” system, where taxes on today’s workers fund benefits for today’s retirees. While this system is more resilient to financial downturn, it “can run into problems when demographic fluctuations raise the ratio of beneficiaries to covered workers” (Economic Policy Institute, 8/6/10). During the 1980s, to head off the glut of Baby Boomer retirements, the Social Security program raised revenues and cut benefits to build up a trust fund for surplus revenues.
It’s worth noting that by setting up this fund, President Ronald Reagan helped to finance massive reductions in tax rates for the wealthy. By building up huge surpluses that the SSA was then required by law to pour into Treasury bonds, Reagan could defer the need to raise revenues into the future, when the SSA would begin tapping into the trust fund.
As US demographics have shifted, with Boomers comfortably into their retirement years, the program no longer runs a surplus. Instead, the SSA makes up the difference between tax receipts and Social Security payments by dipping into the trust fund, as was designed. What would hypothetically go bankrupt in 2035 is not the Social Security program itself, but the trust fund. If this were to happen, the SSA would still operate the program, paying out entitlements at a prorated level of 83%, all from tax receipts.
In other words, a non-original part of the Social Security program may sunset in 2035. While this could present funding challenges, it is not the same as the entire program collapsing, or becoming insolvent.
Furthermore, the idea that a crisis is looming rests on nothing changing in Social Security’s funding structure. Luckily, Congress has ten years to come up with a solution to the Social Security shortfall. We aren’t fretting today about how to fund the Forest Service’s army of seasonal trail workers for the summer of 2035. There’s no need to lose sleep over Social Security funding, either. As economist Dean Baker (Beat the Press, 5/8/24) put it:
There is no economic reason that we can’t pay benefits into the indefinite future, as long as we don’t face some sort of economic collapse from something like nuclear war or a climate disaster.
The easy and popular option is not an option
There are three main solutions that can be found in stories about Social Security’s woes. In the wake of last year’s Trustees’ Report, the Washington Post (5/6/24) listed “the politically treacherous choices of raising the payroll tax, cutting benefits…or taking on more public debt to prop up the system.” The first two options increase the burden on workers, either by raising their taxes, or cutting benefits that they are entitled to, and have already begun paying into. The third option, taking on more public debt, is no doubt a nonstarter for the deficit hawks at the Post.
But this explainer-style news piece, titled “The US Has Updated Its Social Security Estimates. Here’s What You Need to Know,” neglected to mention the easiest and most popular option: raising the cap on income from which Social Security taxes are withheld.
In 2025, income up to $176,100 is taxed for Social Security purposes. Anything beyond that is not. In other words, the architect making close to 200 grand a year pays the same amount into Social Security as the chief executive who takes home seven figures. One simple, and popular, way to increase funding for Social Security is to raise that regressive cap.
To be fair to the Post, the cap increase has been mentioned elsewhere in its pages, including in an opinion piece (5/6/24) by the editorial board published that same day. However, despite acknowledging that “many Americans support the idea” of raising the limit, the editorial board lumps this idea in with “raising the retirement age for younger generations and slowing benefit growth for the top half of earners,” before concluding that “these [solutions] won’t be popular or painless.”
Raising the cap on income is, in fact, popular (as the Post editorial board itself acknowledged), and the only pain it would cause is for the top 6% of income-earners who take home more than $176,100. The New York Times (3/5/25) also mentions a cap increase as an idea to “stabilize” the program, only to say that “no one on Capitol Hill is talking seriously about raising that cap any time soon.” Why that is the case is left unsaid.
Even more popular than raising the cap on wages was President Joe Biden’s proposed billionaires tax, which “would place a 25% levy on households worth more than $100 million. The plan taxes accumulated wealth, so it ends up hitting money that often goes untaxed under current laws” (Bloomberg, 4/24/24). Perhaps unsurprisingly, this kind of solution was not explored in the Times, nor in the billionaire-owned Post.
Useful misinformation
Reports of Social Security’s impending demise are greatly exaggerated. As economist Paul Van De Water wrote for the Center on Budget and Policy Priorities (7/24/24):
Those who claim that Social Security won’t be around at all when today’s young adults retire and that young workers will receive no benefits either misunderstand or misrepresent the trustees’ projections.
Social Security’s imminent demise may not be true, but it’s very useful to those who want to rob all the workers who have dutifully paid their Social Security taxes, by misleading them into thinking it’s simply not possible to pay them back what they’re owed when they retire.
Compared to the retirement programs of global peers, the United States forces its workers to retire later, gives retirees fewer benefits and taxes its citizens more regressively (Washington Post, 7/19/24). Despite this, Americans still love Social Security, and want the government to spend money on it. Far from cuts called for by anxious columnists, the only overhaul Social Security needs is better benefits and a fairer tax system.
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