Feb 7, 2025
A team led by Elon Musk recently gained access to America’s federal payment infrastructure — a system responsible for distributing trillions of dollars in Social Security, Medicare, federal salaries and government contracts annually.
It's not clear exactly how much access he has at the moment: the takeover immediately elicited a flurry of lawsuits, which so far have resulted in a judge's injunction limiting Musk's team's power over payment records. The same judge is considering a broader limit on Musk's plans.
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How did this happen?
Who let the DOGE in?
Musk’s team at the Department of Government Efficiency (DOGE) — an initiative created to reduce wasteful spending and eliminate unnecessary regulations — was granted access by the Treasury Department. The decision was approved by newly appointed Treasury Secretary Scott Bessent.
This unprecedented level of access has unsettled many.
Among the critics is Senator Elizabeth Warren, who sent a letter to Bessent calling the move an “astonishing mismanagement” and demanding answers to why Musk’s team was granted entry to such a critical system.
“It is extraordinarily dangerous to meddle with the critical systems that process trillions of dollars of transactions each year, are essential to preventing a default on federal debt, and ensure that tens of millions of Americans receive their Social Security checks, tax refunds, and Medicare benefits,” she wrote.
“The American people deserve answers about your role in this mismanagement, which threatens the privacy and economic security of every American.”
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‘At the mercy of Elon Musk’
Warren also took to the stage to sound the alarm. During a Senate Democratic Leadership press briefing on Feb. 3, she raised concerns about the potential risks of Musk's involvement, emphasizing the widespread impact of the federal payment system.
“The system that makes sure that your granddad gets his Social Security check. The system that makes sure your mom’s doctor gets a Medicare payment to cover her medical appointment. And the system that makes sure you get the tax refund you’re owed, has been taken over by Elon Musk,” she warned.
She painted a dire picture.
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“Every organization from your state government that uses federal money on that bridge project to the local Head Start that takes care of little kids while their mommies and daddies go to work is now at the mercy of Elon Musk. Maybe you get paid, or maybe you don’t — because now it appears that all of us work for Elon Musk.”
Warren isn’t the only one raising the alarm. Standing alongside her, Senate Democratic Leader Chuck Schumer stated, “Before our very eyes, an unelected shadow government is conducting a hostile takeover of the federal government.”
Could your Social Security be affected?
As Warren pointed out, the federal payment system processes trillions of dollars each year, including Social Security benefits for millions of Americans.
Even before the judge's reined DOGE in, there was no indication that Musk’s involvement would immediately impact Social Security benefits. According to the New York Times, Musk’s initiative is intended to be part of a broader review of the payments system to scrutinize improper payments, rather than an effort to arbitrarily block individual transactions, citing sources familiar with the matter.
Meanwhile, the Wall Street Journal reports that a person familiar with the arrangement described DOGE representatives’ access as “read only,” emphasizing that they won’t have direct authority to stop individual payments or make changes to the system.
Still, concerns about the long-term sustainability of the Social Security program remain — and this issue is independent of Musk’s involvement.
According to the program’s annual trustees report, the Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100% of scheduled benefits until 2033. After that, the fund’s reserves will be depleted, and continuing program income will only be sufficient to cover 79% of scheduled benefits.
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Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
