Billionaire Elon Musk, the driving force behind United States President Donald Trump’s budget-cutting Department of Government Efficiency (DOGE), has broached the sensitive issue of Social Security cost savings on the TV channel Fox Business.

Musk told host Larry Kudlow, a former Trump economic adviser, that the Government Accountability Office estimated in 2024 that federal government fraud was “half a trillion dollars”.

While referring to waste, Musk said: “Most of the federal spending is entitlements. So that’s like the big one to eliminate. That’s the sort of half-trillion, maybe $600, $700bn a year.”

Using the word “eliminate” in the same breath as “entitlements” set off alarms among Trump’s and Musk’s Democratic critics. White House Press Secretary Karoline Leavitt said at the March 11 news briefing that Musk was referring to cutting waste, fraud and abuse in those programmes, and Trump “is going to protect Social Security”, Medicare and Medicaid.

At a March 11 event promoting Tesla cars at the White House, a reporter asked Musk if he could guarantee there would be no interruption to Social Security benefits.

“We are going to be very careful with any benefits,” Musk said. “In fact, only by tackling waste or fraud can we actually preserve those programmes for the future.”

“Fraud” and “waste” mean different things. Waste refers to careless use, and fraud includes criminal wrongdoing.

Musk referred to a report from the Government Accountability Office (GAO), a nonpartisan auditing arm of Congress that examines federal spending. In 2024, the office estimated there are $233bn to $521bn in fraudulent payments across the government per year.

The report went further than Social Security, Medicare and Medicaid, which make up about half of mandatory government spending. It covers the entire government, including pandemic-related relief programmes that resulted in record fraud.

Musk said cutting fraud and waste will help his efforts to slash $1 trillion from the federal budget. But his estimates for fraud are at the top end of the GAO’s estimate or exceed it. For Social Security, the inspector general in 2021 found about $300m in payments was made after the deaths of beneficiaries over about two decades – about one-third of which was recovered. Although federal officials have long recognised improper spending as a problem, it is not the main reason for the programme’s dire financial outlook.

What does the government know about overall fraud?

In April, the Government Accountability Office under President Joe Biden produced what it called a “first-of-its kind, government-wide estimate of federal dollars lost to fraud”.

The office’s estimate of $233bn to $521bn lost in fraud per year covered 2018-2022 data in reports from agency inspectors general and fraud reports submitted to the Office of Management and Budget.

Musk cited the high end of the range when he said “half a trillion”. The White House didn’t respond to our question about the source of his $600bn to $700bn figure.

The GAO’s top-line figures included not only official fraud findings from legal proceedings but also estimates from individual agencies’ findings of fraud. The agency also extrapolated figures it believed represented undetected fraud.

The estimated losses represent about 3 percent to 7 percent of average federal outlays.

The Office of Management and Budget, the agency that assists the president in meeting his budget goals, found a lower figure of federal government fraud, from $4.41bn to $7.31bn annually, based on amounts confirmed through a judicial or adjudication process.

Experts on the federal budget said it’s important to pay attention to the full analysis in the government reports.

Joshua Sewell, director of research and policy at Taxpayers for Common Sense, said taxpayers should view these numbers with a “massive grain of salt”. The report is filled with caveats and is likely not representative of other years because of the increase in pandemic spending.

“It’s a fine report to try to put numbers to an amorphous issue, but you can’t take the high-end numbers as a definitive statement on the dollar amount of fraud that exists in federal spending,” he said.

It is possible that about 5 percent of the annual federal budget is lost to fraud and some programmes have improper payment rates in excess of 10 percent, said Bob Westbrooks, executive director of the Pandemic Response Accountability Committee, a government committee Congress created five years ago. But the phrase “improper payments” doesn’t necessarily mean fraud; it includes scenarios with insufficient documentation.

“Whatever the number, it is huge in absolute terms,” Westbrooks said, referring to all fraud.

Westbrooks said Musk was conflating fraud and waste and ignoring that COVID-19-era fraud was likely pushing up the government’s estimated range, as the report itself noted.

The Government Accountability Office said the range is a “reflection of both the uncertainty associated with estimating fraud and the diversity in the risk environments that were present in fiscal years 2018 through 2022”.

What do we know about Social Security fraud?

At the March 11 White House briefing, Leavitt cited an inspector general report from the Social Security Administration that found more than $70bn of fraud in that programme alone.

The 2024 report did not conclude there was more than $70bn in Social Security “fraud”. It said the programme sent almost $71.8bn in “improper payments” from 2015 to 2022, a period that includes Trump’s first term. That is less than 1 percent of overall payments in that timeframe.

On Fox Business, Musk said “there’s a massive amount of fraud” with people submitting fake Social Security numbers to receive a range of government benefits, including Social Security, healthcare and unemployment assistance.

Most of the improper payouts revealed by the inspector general were overpayments with some underpayments. This happens, for example, when beneficiaries fail to report necessary information or the administration fails to update records, the 2024 inspector general report said. Neither represents criminal intent necessarily.

The Social Security Administration has long struggled to curb improper payments.

“Without better access to data, increased automation, systems modernisation, and policy or legislative changes, improper payments will continue to be an issue into the future,” the report said.

The Social Security Administration inspector general in 2021 found $298m in payments after death to about 24,000 beneficiaries from 1998 to 2019. Those beneficiaries were in suspended payment status, but the payments were still sent because technicians did not follow policy or search all available death records. The report said it “did not identify specific instances of fraud” and provided death information to the Office of Investigations.

The government recovered about $84m, the report said.

Just this year, defendants have been convicted or sentenced for fraudulently cashing cheques sent to deceased beneficiaries, for identity theft used to obtain Social Security benefits and for theft of Social Security payments intended for children.

How has the Social Security Administration tried to address fraud and waste?

Musk said in the Fox Business interview that the federal government had done “many good audits” but the agencies have not implemented auditors’ guidance consistently.

On March 3, the Social Security Administration’s inspector general released a status report on its most recent recommendations.

In all, the inspector general found 280 prior recommendations that had not been implemented with potential savings of $18.4bn. In some cases, the Social Security Administration disagreed with the proposals. Some of the unimplemented recommendations included closer scrutiny of specific groups of beneficiaries for whom the agency is aware of possible discrepancies. Others suggested changes in the computer system’s alerts.

Some of the Government Accountability Office’s recommendations to Congress have also gone unimplemented. In 2022, the GAO urged Congress to amend the Social Security Act to make permanent the sharing of full death data with the Treasury Department, but that hasn’t happened yet.

Social Security is financially in trouble in a decade

Social Security faces a difficult path ahead. Its existential funding woes are bigger than the instances of dead people getting benefit cheques.

The most significant threats to Social Security’s long-term viability are a shortage of workers feeding their tax dollars into the system and a growing number of retirement-age Americans qualifying to receive benefits.

American life expectancy has risen since Social Security’s creation in 1935 and so has the number of eligible recipients. But as the baby boom generation (born from 1946 to 1964) enters retirement, fewer workers are paying into the system.

The Social Security trust funds won’t be able to pay 100 percent of benefits by 2035, the 2024 Social Security Trustees Report said. The trustees have issued similar warnings for more than a decade.

Historically, most politicians from both parties have been loath to propose Social Security changes. Political pundits often refer to it as the “third rail” in American politics – you touch it, you die, at least at the ballot box, where older voters typically have the highest voter turnout.