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Home » Why Social Security’s former head is worried it could miss payments to seniors
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Why Social Security’s former head is worried it could miss payments to seniors

adminBy adminJuly 1, 2007No Comments5 Mins Read
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The former head of the Social Security Administration is warning that the agency could be at risk of missing payments to seniors for the first time in its history thanks to the dramatic staffing cuts planned by the Trump administration as it seeks to slash the federal workforce.

“I do think it’s going to happen,” Martin O’Malley, who served as Social Security commissioner under former President Joe Biden, told Yahoo Finance. “If I were a beneficiary, I’d be setting aside some money right now.”

Social Security Administration officials announced late last week that they intended to lower the agency’s headcount to 50,000 workers, down from approximately 57,000 today and 66,000 a decade ago, in part by offering staff cash buyouts and early retirement incentives. The agency said its cuts would “focus on functions and employees who do not directly provide mission critical services.”

But O’Malley and others have argued that the agency is likely headed for a brain drain that will leave it unable to respond when something inevitably goes wrong with delicate IT systems, including the mainframes that manage monthly payments to retirees.

Those computers run on COBOL, an ancient coding language few young programmers are familiar with, but underpins several critical government operations. Much of the agency’s tech staff is already near or past retirement age and may be eager to take management up on its offers to depart — especially since they’re being told to come into the office five days a week, which they’ve resisted in the past.

“They’re being paid to take it and they’re already retirement eligible. And these [Trump officials] are assholes creating a toxic work environment,” O’Malley said, noting that the administration has angered many workers by firing popular leaders within the agency.

Social Security’s computers are designed to continuously make payments to seniors as long as they’ve been entered into the system. As a result, some of the agency’s tech staff believe benefit interruptions are still unlikely, O’Malley, a former Democratic governor of Maryland and 2016 presidential candidate, said. But “they’ll also admit if you press them that we’ve never tried to run a system like this with so few people,” he added.

Some agency veterans were initially alarmed at reports that Elon Musk’s Department of Government Efficiency had ended Social Security’s contract with Leidos to help maintain its IT systems. That turned out to be a false alarm based on a mistake on the DOGE website, which was later corrected to show it had only canceled a small piece of it focused on allowing applicants to input their gender as “X.”

Story Continues

But Marcela Escobar-Alava, who resigned as Social Security’s chief information officer in January, said she was also worried that a tech meltdown could interrupt benefits. The computers can’t simply run on autopilot, she said, because programs need to be updated for changes to federal law. Even small tweaks require extensive testing to make sure they don’t accidentally break other parts of the system.

“Just to do the cost of living adjustment every year, the team spends three nights in the office making sure every change takes effect,” she said. “Should that be the case? No, it should not. But this is what we have.”

Learn more: How to find your 2025 Social Security COLA increase

The computers that issue payments aren’t the only potential point of failure. Social Security’s other IT systems suffered two major outages last year that forced it to close its offices and its online services — first thanks to the global outage caused by CrowdStrike in July, and again in September due to a problem with its Dell hardware that rendered the agency’s computers inoperable.

“Stuff will fail,” said Escobar-Alava. “And it’s going to take time to recover. And, in some cases, if you don’t have the talent, it may take days if not weeks.”

The Social Security Administration did not respond to a request for comment about the risk of payment interruptions. If some checks were not sent, even temporarily, the impact could be painful for many seniors. About 21 percent of the elderly rely on Social Security for at least three-quarters of their family income, according to the most conservative estimate from a 2025 paper by researchers at the agency and the Census Bureau.

Even without benefit interruptions, many experts are concerned that the 12% staff reduction Trump officials are targeting will hurt customer service across the agency. Seniors may have to wait longer to start receiving benefits after applying and face longer hold times on the phones.

The agency’s large backlog of disability applications could also grow. The average wait time for a decision on a claim rose sharply after the pandemic thanks to staffing shortages and is now longer than six months, according to researchers at the Urban Institute. In many states across the South, the average now stretches more than 300 days.

Nancy Altman, the president of Social Security Works, a group that advocates against cuts to the program, said that trimming staff by 7,000 would “cripple” the agency’s ability to function. She doubted that tech tools like AI would make up for the loss of manpower, especially when it comes to helping process seniors’ claims or assisting them with trouble applying for benefits.

“If you’re talking about a chat bot or something, it’s just not going to work,” she said.

Jordan Weissmann is a Senior Reporter at Yahoo Finance.

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

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