Social Security Announces Major Clampdown to Save $7 Billion
Story by Martha McHardy, Newsweek, 3/8/25
The Social Security Administration (SSA) has announced a major crackdown on overpayments as it seeks to save an estimated $7 billion over the next decade.
Why It Matters
More than 70 million people in the United States rely on Social Security benefits, including retirees and individuals with disabilities.
However, the financial security of these beneficiaries could be under threat. Last week, a Republican-approved budget blueprint that may affect Social Security benefits passed in the House, and President Donald Trump‘s administration is working to drastically cut government spending.
What To Know
The SSA announced on Friday that it would begin withholding 100 percent of Social Security benefits from overpaid beneficiaries.
Under the new policy, beneficiaries who are overpaid after March 27 will have their entire monthly Social Security payment withheld until the debt is repaid.
The Office of the Chief Actuary has estimated that this change will lead to a substantial increase in overpayment recoveries.
On March 27, the agency will begin mailing notices regarding the 100 percent withholding rate, replacing the 10 percent rate that the SSA instituted last year to ensure that it did not “unduly harm anyone” by withholding money to repay itself after mistakenly overpaying a beneficiary.
The change applies only to new overpayments related to Social Security benefits.
Current beneficiaries with overpayments incurred before March 27 will not be affected, and no action is required. The withholding rate for Supplemental Security Income (SSI) overpayments remains at 10 percent.
Those who cannot afford the full recovery of their overpayment can contact the SSA at 1-800-772-1213 or visit their local office to request a lower rate.
Additionally, individuals have the right to appeal an overpayment decision or the amount in question. They can also request a waiver if they believe the overpayment was not their fault and they cannot afford repayment. The SSA has confirmed that it will not pursue recovery efforts while an initial appeal or waiver request is pending.
Trump’s Comments on Social Security
The SSA’s policy change comes amid an effort by the Trump administration and the Department of Government Efficiency (DOGE) to drastically reduce federal spending.
The cost-cutting initiative has involved laying off thousands of federal employees across various departments.
Within the SSA, 7,000 employees are set to be laid off this month. Trump has also vowed to crack down on what he called “fraud, waste and theft” within the agency.
“A lot of money is paid out to people because it just keeps getting paid and paid, and nobody does [anything]—and it really hurts Social Security. It hurts our country,” he said during his joint address to Congress on Tuesday. He added, “We’re going to find out where that money is going, and it’s not going to be pretty.”
The president also said government databases list millions of beneficiaries at improbable ages, including individuals over 160 years old. There is no evidence of hundreds of thousands of people over 100 years old collecting benefits illegally.
Trump also proposed eliminating taxes on Social Security benefits. He said on Tuesday, “I’m calling for … no tax on Social Security benefits for our great seniors.”
While Trump has long pledged to eliminate taxes on Social Security benefits, a budget model by the University of Pennsylvania’s Wharton School estimates that eliminating such taxes could cut U.S. revenue by $1.5 trillion over a decade and increase the country’s debt burden by 7 percent by 2054.
During his 2024 campaign, Trump pledged not to cut Social Security. “As president, I will not cut ONE PENNY from Social Security or Medicare,” he said during a speech in Washington, D.C., in July.
In a February 18 interview on Fox News, Trump reaffirmed his stance on Social Security, saying: “Social Security won’t be touched, other than if there’s fraud or something. It’s going to be strengthened. But it won’t be touched.”
He also pledged no cuts to Medicare and Medicaid. However, the Republican-controlled House recently approved a budget blueprint that proposes at least $1.5 trillion in cuts to mandatory federal spending—which includes funding for entitlement programs such as Social Security and Medicare—to pay for Trump’s tax cuts and other policies.
The blueprint does not mention Social Security or Medicare by name.
In 2025, almost 69 million Americans on average are set to receive a Social Security benefit each month, according to the SSA, totaling about $1.6 trillion in benefits.
What People Are Saying
Lee Dudek, the acting commissioner of Social Security, said in a news release about the overpayment recovery rate: “We have the significant responsibility to be good stewards of the trust funds for the American people. It is our duty to revise the overpayment repayment policy back to full withholding, as it was during the Obama administration and first Trump administration, to properly safeguard taxpayer funds.”
What Happens Next
Social Security has long been in a fraught position, and as more people retire and live longer, the program is paying out more. If Congress does not make adjustments to improve its finances, such as increasing revenue or reducing spending, Social Security may have to reduce benefits in about 10 years to ensure the program does not run out of money.