How much money does the US Social Security system lose to corruption and waste?

(CLO) Speaking to Fox Business, billionaire Elon Musk cited a report by the US Government Accountability Office (GAO), estimating fraud, corruption and waste of up to "half a trillion dollars" in the US Social Security system.

He stressed that “the vast majority of government spending is entitlement” and claimed that waste could be as high as $600 billion to $700 billion a year. The White House quickly responded, pointing out that Musk was only referring to cutting fraud and corruption.

Elon Musk holds a chainsaw as a symbol of cost-cutting at the Conservative Political Action Conference in National Harbor, Maryland on February 20. Photo: X/elonmusk

According to the GAO, the amount of money lost to “fraud” from 2018 to 2022 ranges from $233 billion to $521 billion per year, including pandemic relief programs. That represents about 3 to 7 percent of total federal spending. The White House Office of Management and Budget has given a much lower estimate, just $4.41 billion to $7.31 billion per year.

Budget expert Joshua Sewell cautions against taking these figures as absolutes, as fraud and corruption during the COVID-19 era could significantly inflate the estimates. Bob Westbrooks, director of the Pandemic Response Accountability Commission, said that whatever the true figure, the extent of the budget loss is significant.

In the Social Security program alone, the inspector general’s report found that there were about $71.8 billion in incorrect payments between 2015 and 2022, but most of the overpayments were due to administrative errors, not intentional fraud. Some cases were found, such as recipients who had died but were still receiving benefits.

Musk said the U.S. government has had many good audits but has not fully implemented recommendations to reduce losses. The Social Security Inspector General made 280 unimplemented recommendations that could save as much as $18.4 billion. Some of the recommendations call for improving data systems and modernizing technology to reduce errors.

The bigger problem for Social Security is its financial imbalance due to an aging population. Projections show that the program’s trust funds will be depleted by 2035, leaving the government unable to pay its full benefits. But because the issue is politically sensitive, politicians from both parties have generally shied away from proposing drastic changes.

Ngoc Anh (according to AJ, Fox Business)