So many Americans died of COVID-19 during the pandemic that the Social Security program received a boost of $205 billion, according to a new report by the National Bureau of Economic Research (NBER).
Why It Matters
The new report from NBER sheds light on the way the pandemic affected the Social Security program, which is currently facing a looming insolvency crisis.
The Department of Government Efficiency (DOGE), which President Donald Trump has put in charge of shrinking the size of the federal government, has promised to pursue a trillion dollars in cuts across many programs and departments of the federal government, with a specific focus on uncovering fraud and wasteful spending.
This operation, Trump said, will include the Social Security program, which sends benefit payments to more than 70 million Americans.
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What To Know
Using data from the Centers for Disease Control and Prevention (CDC), NBER—a nonprofit, nonpartisan organization—found that excess deaths among individuals aged 25 and older between 2020 and 2023 led to a reduction in Social Security future retirement payments of $294 billion.
Excess deaths refers to those in a given time frame over the number that might have been expected considering historic data in a so-called average year. According to the CDC, the U.S. reported over 1.7 million excess deaths between 2020 and 2023.
The reduction in future Social Security benefits caused by these excess deaths was then recalculated by NBER to $205 billion considering the consequent decrease in future payroll tax flows and higher payments to surviving spouses and children.
“Our analysis suggests a slight improvement in Social Security’s financial health due to excess deaths, driven primarily by the premature death of people who would have received retirement benefits,” reads the NBER report.
“Offsetting effects, such as the increase in survivors’ insurance beneficiaries, are relatively small by comparison.”
While the Social Security program is technically saving more money on benefits than it is losing in tax revenues, NBER said that “these public fiscal benefits are extremely modest compared to the broader costs generated by the COVID-19 pandemic.”
What People Are Saying
Karoline Leavitt, the White House spokesperson, previously said: “The Social Security Administration is now working to find even more waste, fraud, and abuse in the administration’s whole-of-government effort to protect American taxpayers.”
Trump’s Commerce Secretary Howard Lutnick told Fox News earlier this week: “When I set up DOGE with Elon [Musk], so back in October (…) I flew down to Texas, got Elon Musk to do it. Here was our agreement: that Elon was going to cut a trillion dollars of waste, fraud, and abuse.
“Think about it: we have almost $4 trillion in entitlements and no one has ever looked at it before. You know Social Security is wrong. You know Medicaid and Medicare are wrong.”
He added: “So, he [Musk] is going to cut a trillion, and then we’ll get rid of all those tax scams that hammer against America and we’re going to raise a trillion dollars of revenues,” he said.
“Our objective, under Donald Trump, is to bounce this budget and I’m telling you, you watch it, we’re going to do it.”
What’s Next
The Social Security program’s trust fund reserves are expected to become insolvent in 2035, according to the agency’s annual trustees report published last year. While the program will continue to exist, millions of Americans will see their benefits cut. Some experts have warned that Trump’s agenda might speed up the program’s insolvency.