Social Security's Insolvency Is Driven by Benefits for the Living, Not Fraud by the Dead

Elon Musk claims to have uncovered massive fraud within Social Security, but those data are already well known and not a major problem.

Elon Musk claims that his Department of Government Efficiency (DOGE) has uncovered "the biggest fraud in history" within the Social Security Administration: Payments to millions of Americans who have likely been dead for a long time.

That claim seems to be based on a faulty understanding of Social Security data on Musk's part. More to the point: Social Security's fiscal problems aren't the result of fraudulent payments to people who are already dead. It is not benefits for the dead, but rather payments to the living that are driving the program toward insolvency.

"According to the Social Security database, these are the numbers of people in each age bucket with the death field set to FALSE," Musk posted to X earlier this week, along with a chart that purports to show that millions of people over age 100 are still in the program's database. "Maybe Twilight is real and there are a lot of vampires collecting Social Security," Musk suggested.

Maybe. But other explanations seem more plausible—and none of them involve the government paying Social Security benefits to people well over 100 years old.

For starters, this is not newly uncovered information. In July 2023, the Social Security Administration's inspector general released a report showing that 18.9 million individuals born in 1920 or before did not have a date of death in the program's database. That total included 10.9 million people born in 1899 or earlier.

The person believed to be the oldest living American today is Naomi Whitehead, a Georgia woman born in 1910. It is a very safe bet that everyone who lived during the year 1899 is now dead. So it goes.

The crucial question, however, is whether Social Security's lack of "death information" about those people means they are still receiving benefits.

The vast majority are not. According to the inspector general's report, 98 percent of them (18.4 million) "are not currently receiving" Social Security payments. That's because those 18.4 million people "have not had earnings reported to SSA in the past 50 years," the inspector general notes. "The fact that these individuals were age 100 or older, had no earnings in the past 50 years, and received no SSA payments indicates they are deceased."

Another way to know that those payments aren't being made is to simply look at the annual cost of Social Security. Jared Walczak, vice president of state projects at the Tax Foundation, crunched some of those figures in a post on X. In short, if Social Security was paying benefits to all those obviously deceased people, the program would be spending about $1 trillion more every year than it already is.

Another possible explanation is offered by Wired: Musk and his team have misunderstood a basic function of the programming language that runs the Social Security database.

Regardless, it's worth asking why are all those (almost certainly) dead people still rattling around in Social Security's database. Mostly because they died before electronic recordkeeping existed, and the government bureaucracy has little incentive to fix the problem.

The inspector general report estimates that it would cost between $5.5 million and $9.7 million to fix those discrepancies in the database. When a similar report was published in 2015, the Social Security Administration declined to do anything about it, due to the expected cost and because the administration "believed a regulation would be required to allow it to add death information to these records."

On one hand, that's a bit of a funny commentary on the state of the federal bureaucracy: the Social Security Administration can't acknowledge reality—that is, they can't officially say everyone who was born before 1900 is now dead—without a new regulation telling them to do so.

The problem is actually a bit more complicated. If the information about those 18 million people doesn't exist and can't be sourced, those bureaucrats would be quite literally filling in fraudulent death information—and thus they are understandably unwilling to do it.

But, again, this doesn't mean fraudulent payments are being made to those people. By Social Security policy, benefits are automatically terminated when someone reaches age 115—unless it can be verified that the beneficiary is still alive.

All of this seems like an opportunity for DOGE—which is just a rebranded version of the U.S. Digital Service, an Obama-era agency meant to streamline these sorts of bureaucratic conundrums—to scrub the database and improve the quality of the government's information.

That would be a useful task, even if it isn't blocking any wasteful spending. As that same 2023 inspector general report also notes, all those legitimate Social Security numbers are floating around out there "hampers…efforts to prevent and detect fraud and misuse."

There are almost certainly some fraudulent payments going out the door, of course. Any massive government bureaucracy is susceptible to fraud. Even though the data Musk has shared is not proof of the "biggest fraud in history," that doesn't mean there isn't fraud to be rooted out.

However, Social Security's biggest problem isn't payments to the dead—it is payments to the living.

Last year, Social Security distributed more than $1.4 trillion in benefits to more than 68 million Americans, mostly retirees (the program also pays benefits to some disabled people who are unable to work). Current workers had a little less than $1.3 trillion extracted from their paychecks to fund the program. Obviously, that math doesn't balance.

Last year was no exception. Social Security has been running annual deficits since 2010, and the average Social Security recipient collects significantly more in benefits than he or she contributed in payroll taxes. That's why Social Security is spiraling toward insolvency, which will hit in the early 2030s. When it does, beneficiaries will have their checks automatically trimmed by about 20 percent.

Cleaning up the program's databases and rooting out fraud is worthwhile, but the problem with Social Security is not a secret. It is an outdated program designed for a different era that is currently providing overly generous benefits to the wealthiest cohort of people in American history. Fixing those problems will require much more than cutting off mostly nonexistent benefit payments to people long dead—it will require phasing out Social Security, giving younger workers better options to save for retirement, and means-testing benefits so the government can stop robbing relatively poorer workers to fund the lavish retirements of wealthy seniors.

It's great that Musk is turning the DOGE's attention to Social Security. And he's right that it is a major scam—but he's still only scratching the surface.