Social Security overhaul sparks fears of benefit disruptions

[UNITED STATES] The Trump administration's so-called Department of Government Efficiency is making rapid changes at the Social Security Administration, raising concerns that recipients would find it more difficult to use the agency's services. Some experts are concerned that efforts to upgrade the agency's technology will have an impact on the continuity of benefits.

The push for modernization comes amid longstanding criticisms of the SSA’s outdated infrastructure. Many of its core systems still rely on decades-old technology, including COBOL, a programming language developed in the 1950s. While upgrading these systems is widely seen as necessary, the accelerated timeline and lack of transparency around the transition have alarmed former officials and advocacy groups.

“Now I’m concerned that benefits could get disrupted,” said Jason Fichtner, a former deputy commissioner at the Social Security Administration who was appointed by President George W. Bush.

The agency's recent modifications have raised concerns among experts, including Fichtner. President Donald Trump has frequently promised not to change Social Security payments. However, new changes may make it more difficult for qualified Americans to receive assistance.

Advocates for seniors and people with disabilities warn that the combination of staff reductions, office closures, and system overhauls could create a “perfect storm” of delays. The National Committee to Preserve Social Security and Medicare has called the cuts “dangerous,” noting that field offices already struggle with understaffing and that online services are frequently inaccessible to older Americans who rely on in-person assistance.

The SSA, under the Trump administration, has attempted to cut 7,000 Social Security employees and liquidate six regional offices. Fichtner and Kathleen Romig, a former senior Social Security Administration official, penned a recent op-ed. The Center on Budget and Policy Priorities employs Romig as its director of Social Security and disability policy.

The reduction will have an impact on the service Americans receive when they access Social Security's website, which has difficulties; phone its 800 number, which has long wait times; or visit a field office, which can be congested, they said.

This may make it more difficult for eligible Americans to claim benefits, particularly those with impairments who face the possibility of dying before obtaining the funds for which they qualify.

″The Social Security Administration is in crisis, and people’s benefits are at risk,” Fichtner and Romig wrote.

'You must understand the complexity of the programs.'

Fichtner expressed concern after learning that the Social Security Administration, under DOGE, intends to relocate "tens of millions of lines of code" created in the programming language COBOL within a few months.

The reliance on COBOL has been a persistent challenge for federal and state agencies, with a shrinking pool of programmers who understand the legacy language. Past attempts to modernize government systems, such as the troubled rollout of Healthcare.gov, have been plagued by technical failures, raising concerns that a rushed transition at the SSA could lead to similar disruptions.

"If you start messing with the system's code, that could impact those who are already receiving benefits, and that's a new front-and-center concern," said Fichtner, a senior fellow at the National Academy of Social Insurance and executive director of the Retirement Income Institute at the Alliance for Lifetime Income.

While the Social Security systems could be upgraded, initiatives of this nature are normally done over years rather than months, according to Fichtner. Furthermore, they usually begin with smaller tests, such as with a single state, to find faults or other difficulties before expanding regionally and then nationally, he explained.

“You can’t just flip a switch one night and expect to be able to upgrade,” Fichtner said. “It takes due diligence, and you have to understand the complexity of the programs.”

Prior to the COBOL transition reports, Fichtner stated that he was not concerned about benefit interruptions, but that changes at the agency may have an impact on customer service and cause delays for benefit applicants.

“There is no validity to these reports,” a Social Security Administration spokesperson told CNBC via email. In an email statement, the White House also said, “There is no validity to these reports.

As DOGE seeks to eliminate fraud at the Social Security Administration, some experts say the focus is misplaced.

Fraud within Social Security is relatively rare, accounting for less than 1% of payments, according to the agency’s own estimates. Critics argue that the emphasis on fraud prevention—while important—distracts from more pressing issues, such as the program’s solvency and the growing number of beneficiaries due to an aging population.

To that point, analysts warn that focusing on the agency's administrative side diverts attention away from the program's larger issue, which is the inevitable depletion of the trust funds used to provide payments.

DOGE may have noble intentions in making the Social Security Administration more efficient, but its measures may not "meaningfully change the financial trajectory of the program," according to Romina Boccia, director of budget and entitlement policy at the Cato Institute, a libertarian think tank.

If DOGE makes adjustments that must be reversed, they may impede benefit revisions that Congress must consider before the trust fund runs out in 2033, she added.

“Current erratic actions have the potential to undermine those much more important, bigger reforms in a misguided attempt to root out very small levels of fraud,” Boccia said.

The Social Security trustees anticipated in 2024 that the program's combined retirement and disability trust funds would run until 2035, at which point only 83% of benefits would be payable unless Congress found a solution to resolve the matter sooner.

According to the 2024 forecasts, the retirement trust fund will deplete sooner than expected in 2033, when 79% of payments may be payable. A new law that grants more generous payments to certain public retirees is expected to push the projected depletion dates forward.

Because the Social Security Administration's administrative budget is less than 1% of total outlays, Charles Blahous, a former public trustee for Social Security and Medicare and deputy director of President George W. Bush's National Economic Council, believes it is not the best area to focus on to make the program more cost-effective and efficient.

"There's just not enough money there to make serious headway," said Blahous, a senior research strategist at George Mason University's Mercatus Center.