On Friday, March 7, at 5 p.m., Donald Trump’s Social Security Administration (SSA) revealed a policy shift that could potentially lead to financial ruin for some senior beneficiaries. The agency is set to return to a harsher policy that some Republican lawmakers had vocally opposed in the past — a policy requiring seniors to shoulder the financial burden of the government’s errors.
The rule modification will halt Social Security payments completely for Americans receiving overpayments from the agency, until the amount owed is recovered. This change could severely impact some beneficiaries, which is the rationale behind former Republican objections to earlier versions of the policy. As highlighted in a 2024 Congressional Research Service study, overpayments frequently stem from agency mistakes, although it did not specify the proportion of overpayments related to fraud versus administrative error.
Sen. Rick Scott (R-Fla.), a Trump supporter, cautioned in 2023 that enforcing a 100 percent “clawback” rate — where the agency withholds all of a beneficiary’s payments until previous overpayments are sorted out — “would financially ruin innumerable elderly Floridians.”
“Social Security must be held accountable for these blunders, not the seniors of Florida,” Scott stated in a 2023 correspondence to the agency.
Since the SSA announced its return to this policy of withholding entire payments from seniors due to overpayments — even when these errors are attributable to the agency itself — Scott and others have been notably silent.
This policy change, effective March 27, reverses adjustments made during the Biden administration under former SSA Commissioner Martin O’Malley. O’Malley points out that the overwhelming majority of overpayments result not from fraudulent actions but from agency miscalculations or beneficiaries failing to report new income or employment.
The only method to avoid repaying overpayments is to apply for a waiver by either dialing an 800 number or by visiting a field office, many of which are now being shut down nationwide.
Elon Musk’s so-called Department of Government Efficiency (DOGE) reportedly sought to terminate phone services for claims processing, but the agency withdrew this proposal after a Washington Post report surfaced. At least ten field offices have been closed due to DOGE, in addition to a reduction from ten regional offices to four. (DOGE has also identified 47 field offices across 24 states for potential closure.)
Legally, the SSA is obligated to recuperate overpayments and has the authority to devise its own policies for doing so. Prior to this change, the maximum withholding rate stood at 10 percent and was only applied if a beneficiary failed to respond to the agency’s repayment request. Now, those receiving overpayments—regardless of fault—will have their full checks “automatically” withheld, as per Trump’s interim SSA head, Leland Dudek.
This marks a significant departure from the Biden administration-era SSA, where, under O’Malley, the clawback rate had been reduced from 100 percent to 10 percent. In a controversial move, Dudek — who has clandestinely aided the Trump administration and DOGE in dismantling the agency’s operations — has reinstated the 100 percent clawback rate.
The reinstatement of the higher clawback rate is projected to save $7 billion over the next decade, according to statements from the SSA.
“What they’re implying is that individuals can navigate a congested 800 number or struggle with a mobility aid to reach a field office that may be closed,” O’Malley remarked. “It’s a heartless approach, reflecting poorly on conscience and fairness.”
O’Malley stressed that the continuous closure of SSA offices and downsizing of its workforce will almost certainly lead to an increase in overpayments, ultimately resulting in payment stoppage for certain beneficiaries.
“It will take a longer duration for an under-resourced and diminished staff to rectify even the few errors they generate,” O’Malley added.
This clawback adjustment coincides with DOGE’s initiative to streamline the SSA workforce by 7,000 employees. Many SSA employees faced a deadline to accept buyout offers from DOGE by last Friday, yet it remains unclear how many accepted.
Furthermore, DOGE has eliminated data collection operations at the SSA, as discovered by Rolling Stone, terminating contracts pertaining to surveys and research. One canceled contract aimed to gather information on disabled children related to Supplemental Security Income benefits, part of a program dedicated to analyzing the characteristics and experiences of SSI children and their families, as well as the application experiences of children awarded or denied SSI. The online portal for that program is now defunct.
All these upheavals within the SSA occur as Dudek collaborates with DOGE in its efforts and as Musk perpetuates his critiques against entitlement programs such as Social Security.
Musk, who has referred to Social Security as “the largest Ponzi scheme in history,” made a dubious claim in a recent Fox Business interview that entitlement programs like Social Security, Medicare, and Medicaid waste and defraud up to $700 billion each year.
In response to Musk’s interview and the subsequent backlash, the White House reaffirmed its stance on the social safety net, issuing a “fact check” titled “President Trump Will Always Protect Social Security, Medicare” on Tuesday. While fraudulent and improper payments do exist within Social Security, O’Malley notes that they constitute a small fraction of the total disbursements by the agency.
The White House has pointed to an inspector general report, which indicated the SSA was responsible for $72 billion in improper payments during the period from 2015 to 2022 — representing less than one percent of all benefits distributed during that timeframe.
O’Malley criticized the reinstatement of the 100 percent clawback policy, asserting that it would impose hardship on low-income and elderly Americans and constitutes a form of waste in itself.
“Do you know what waste really is? Spending five dollars to recover a dime,” O’Malley remarked.
A SMALL NUMBER of congressional Republicans have previously voiced concerns regarding the SSA’s clawback policies, including the 100 percent withholding rate. However, they have remained silent following last week’s announcement to reinstate that rate.
As early as 2020, several Republicans advocated not only for reducing SSA overpayments and abolishing the 100 percent clawback rate but for eliminating the requirement for beneficiaries to repay the government altogether. Back in August of that year, three former House Ways and Means Committee members commended the SSA for “streamlining” the waiver process for overpayments incurred during the Covid-19 pandemic. “Americans should never be liable for debts resulting from government decisions,” they stated.
The movement against clawbacks has been championed by Reps. Jason Smith (R-Mo.), Mike Carey (R-Ohio), and Scott, the Florida senator. None have responded to inquiries or provided clarification on their previous opinions regarding Social Security clawbacks.
In October 2023, Carey noted that seniors “on fixed incomes shouldn’t be punished for bureaucratic errors made by the Social Security Administration.” The subsequent month, Scott sent a critical letter to the SSA.
“I have received numerous reports from Floridians about the SSA demanding alarming sums for repayment due to past overpayments and errors made by the SSA,” Scott expressed in the letter. “These notifications have taken many seniors in my state by surprise and could, if recouped immediately, financially devastate countless elderly Floridians.”
He concluded, “It is fundamentally wrong for the federal government to target well-meaning Americans who acted in good faith, trusting that their government would also act correctly.”
In February 2024, Smith advocated a more progressive stance, arguing that Social Security recipients should not have to repay any overpayments whatsoever.
“The elderly and individuals with disabilities should not bear the cost of avoidable improper payments made by the Social Security Administration,” Smith asserted at that time.
In March 2024, O’Malley declared that the agency would reduce the clawback rate from 100 percent back down to 10 percent.
“I resolved that matter, eliminating the 100 percent interruption policy that had existed under both Obama and Trump,” O’Malley told Rolling Stone. “When I implemented that change, it received praise from Republican lawmakers.”
Republicans like Smith and Rep. Darin LaHood (R-Ill.) have urged the SSA to utilize payroll data to ensure beneficiaries do not exceed their benefit limits. In August 2024, Carey introduced a bill aimed at relieving beneficiaries from the obligation to repay overpayments that were discovered more than three years post-issue. Named the Protecting Americans from Social Security Clawbacks Act, the bill ultimately did not progress.
While Republicans have either been silent or openly supportive of DOGE’s dismantling of Social Security, Democrats have raised concerns about what they identify as clear threats to the program. Rep. John Larson (D-Conn.) has proposed two bills to halt DOGE from closing field offices and to safeguard American data, including Social Security numbers, work histories, home addresses, benefit amounts, and family information, which DOGE accessed last month. Larson also introduced a resolution demanding the White House provide detailed insights into DOGE’s activities within the SSA by March 19. Last week, House Republicans declined to address Larson’s resolution, effectively rendering it defunct in committee.
After the SSA stated it would revert to the 100 percent clawback rate, Larson remarked that this move was merely a tactic for the agency to recover lost funds so as to justify another round of tax cuts for the wealthy.
“If this was motivated by anything other than the desire to extract funds from seniors to finance a tax cut for themselves and their wealthy allies, they would not be recklessly dismantling the workforce of an already understaffed agency and increasing the probability of mistakes occurring,” Larson stated. “Last year, Republicans called for relief from clawbacks. What is their stance now?”
This story is published in conjunction with American Doom, a newsletter focusing on right-wing extremism and other threats to democracy. Have a tip? Reach out to Justin Glawe via Signal at justinglawe.20.
