Under Trump, Social Security Resumes What It Once Called ‘Clawback Cruelty’

Yves here. Admittedly, the US only recently reversed a practice of being particularly punitive in how it clawed back excessive Social Security payments when the recipient was not at fault. Nevertheless, the Trump reversion to the bad old normal is yet another manifestation of an ugly collective pathology very much in view: enjoying the punishment of others who can be depicted as deserving, no matter how thin the grounds. Readers and your humble blogger have noted the savage glee over DOGE firings, as if all Federal workers are thieves whose comeuppance is long overdue.¹

Sadly, this article does not mention how much money is at stake in this turnip-squeezing exercise. But is it not hard to imagine that the gain is not large relative to the pain (and cost of additional burdens on state and local social services). For instance, Traditional Medicare payments are deducted from Social Security disbursements. So how many of these clawback cases will wind up on Medicaid (assuming they don’t simply wind up on the street and obligingly die faster)?

By David Hilzenrath and Jodie Fleischer, Cox Media Group. Originally published by Cox Media Group; cross posted from  KFF Health News

A year ago, a new head of Social Security set out to stop the agency from financially devastating many of the people it was meant to help.

The agency had long made it a practice to reduce or halt benefit checks to recoup billions of dollars in payments it sent recipients but later said they never should have received.

Martin O’Malley, then the Social Security Administration commissioner, announced in March 2024 the agency would no longer cut off people’s monthly old-age, survivors, and disability checks to recoup money they had allegedly been overpaid — a pattern he called “clawback cruelty.” Instead, it would default to withholding 10% of monthly benefits. The new policy allowed people who already live on little to pay their rent and keep food on the table.

Last Friday, the Trump administration reversed that policy.

Beginning March 27, to recover new overpayments, the Social Security Administration will automatically withhold 100% of recipients’ monthly benefits, the agency announced.

The agency said it was acting in the interest of fiscal responsibility and that the reversal would save the government about $7 billion over a decade.

“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,” acting Commissioner Lee Dudek said in a news release.

Advocates for Social Security beneficiaries described the action as cruel and harmful.

“The results are predictable: more unnecessary suffering,” said Kathleen Romig, who worked at the Social Security Administration under O’Malley and is now director of Social Security and disability policy at the Center on Budget and Policy Priorities.

Kate Lang of the advocacy group Justice in Aging said she was heartbroken.

“Those who are most vulnerable, with the fewest resources, are the ones who will feel the harsh impacts of this change,” she said. Many “are going to be unable to buy food or keep the roof over their head,” she said.

In 2023, after an investigation by KFF Health News and Cox Media Group cast a spotlight on overpayments and clawbacks, lawmakers from both parties called on the Social Security Administration to change its approach.

The policy change a year ago was inspired in part by the plight of people such as Denise Woods, who was sleeping in her Chevy in Savannah, Georgia, in December 2023 while contending with lupus and congestive heart failure after the government cut off her disability benefits. The government was demanding she repay almost $58,000.

Many overpayments are the result of government error. It can take the government years to figure out it has been paying someone too much, and by then, the amount the government says it is owed can grow far beyond a beneficiary’s ability to repay. And it has often demanded that recipients repay the full amount within 30 days.

As of October, the SSA was withholding at least a portion of monthly benefit payments from hundreds of thousands of people, according to data the SSA provided last fall to KFF Health News and Cox Media Group. The agency said it was withholding up to 10% from 669,903 people to recoup an overpayment. Asked whether those numbers covered all types of benefits administered by the SSA, the agency’s press office didn’t say.

“Under Trump’s leadership, Social Security has reinstated a cruel policy of clawing back Social Security overpayments with no regard for an American’s ability to pay or whether the overpayment was an error by the agency,” said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee.

The new plan to completely withhold monthly benefits from recipients who were allegedly overpaid does not extend to the Supplemental Security Income program, one of two Social Security programs for people with disabilities. SSI, as the agency explains, covers “people with disabilities and older adults who have little or no income or resources.”

The government’s estimate that cutting people off completely will save $7 billion over a decade implies it expects many more overpayments in the years ahead.

The SSA’s March 7 announcement was part of a broader dismantling of Biden-era policies under President Donald Trump. It was also part of a broader upheaval at the Social Security Administration, which announced In February that it would cut its staff from about 57,000 to 50,000.

In an interview Monday, O’Malley predicted that the public will experience much longer wait times trying to get through to the agency by phone and longer waits for disability determinations.

Social Security runs on a very old computer system, he said, and driving people out of the agency who understand it “can only result in system collapse.”

“The risk of totally shutting down the agency is greatly increased by people mucking around that don’t know what they’re doing,” O’Malley said.

On the PBS NewsHour last week, he advised recipients to save money to prepare for an interruption of benefits.

Trump deputy Elon Musk has boasted of taking a chainsaw to the federal government and has called Social Security a Ponzi scheme. In a signed declaration filed in federal court last week, a recently retired SSA official, Tiffany Flick, said she “witnessed a disregard for critical processes” as members of DOGE — the Department of Government Efficiency, which Trump established by executive order — demanded access to sensitive Social Security systems, including files that contain beneficiaries’ banking information.

New management at the SSA called its workforce “bloated.” But, under the previous administration, the agency was telling a starkly different story.

A year ago, O’Malley told lawmakers that, as the number of people receiving benefits increased, “historic underfunding and understaffing” at the agency had created a “service delivery crisis.”

Late last year, the agency provided data to KFF Health News showing that in September its workforce was near a 50-year low. As of last month, applicants for disability benefits were waiting an average of more than seven months for a decision, according to the SSA website.

The staffing cuts will lead to more overpayments than ever and will make it harder for the people affected to clear up mistakes, said Jen Burdick, an attorney at Community Legal Services of Philadelphia.

As KFF Health News and Cox Media Group revealed in 2023, about 2 million people a year were receiving notices from the SSA that they were overpaid and owed money back.

People can appeal overpayment notices, request a lower withholding rate, or ask the SSA to waive collection altogether, the agency said. The SSA does not pursue recoveries while an initial appeal or waiver request is pending, it said.

Shortly before O’Malley left the SSA in November, the agency implemented changes that made it easier for beneficiaries to get overpayments waived. The agency spelled out grounds for determining the beneficiary was not at fault — for instance, if the agency continued to issue overpayments after the beneficiary reported a change in their financial circumstances that should have led to a reduction in benefits. Those policy changes remain intact.

Several Republicans who expressed concern about clawbacks in the aftermath of 2023 news coverage did not respond to inquiries for this article or declined to comment. One of them was Sen. Rick Scott (R-Fla.), who is now chair of the Senate’s Special Committee on Aging.

“Hardworking American taxpayers pay into Social Security all of their lives so that they can depend on it in the time they need it most,” Scott said in a 2023 letter to the agency. “The fact that the SSA’s actions are leaving some of them worse off, through no fault of their own, is absolutely unacceptable.”

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¹ A reminder of where this may be going from A Tale of Two Cities:

Monseigneur might have been warmer in his manner. It appeared, under the circumstances, rather agreeable to him to see the common people dispersed before his horses, and often barely escaping from being run down. His man drove as if he were charging an enemy, and the furious recklessness of the man brought no check into the face, or to the lips, of the master. The complaint had sometimes made itself audible, even in that deaf city and dumb age, that, in the narrow streets without footways, the fierce patrician custom of hard driving endangered and maimed the mere vulgar in a barbarous manner. But, few cared enough for that to think of it a second time, and, in this matter, as in all others, the common wretches were left to get out of their difficulties as they could.

With a wild rattle and clatter, and an inhuman abandonment of consideration not easy to be understood in these days, the carriage dashed through streets and swept round corners, with women screaming before it, and men clutching each other and clutching children out of its way. At last, swooping at a street corner by a fountain, one of its wheels came to a sickening little jolt, and there was a loud cry from a number of voices, and the horses reared and plunged.
But for the latter inconvenience, the carriage probably would not have stopped; carriages were often known to drive on, and leave their wounded behind, and why not? But the frightened valet had got down in a hurry, and there were twenty hands at the horses’ bridles.

“What has gone wrong?” said Monsieur, calmly looking out.

A tall man in a nightcap had caught up a bundle from among the feet of the horses, and had laid it on the basement of the fountain, and was down in the mud and wet, howling over it like a wild animal.

“Pardon, Monsieur the Marquis!” said a ragged and submissive man, “it is a child.”

“Why does he make that abominable noise? Is it his child?”

“Excuse me, Monsieur the Marquis—it is a pity—yes.”

The fountain was a little removed; for the street opened, where it was, into a space some ten or twelve yards square. As the tall man suddenly got up from the ground, and came running at the carriage, Monsieur the Marquis clapped his hand for an instant on his sword-hilt.

“Killed!” shrieked the man, in wild desperation, extending both arms at their length above his head, and staring at him. “Dead!”
The people closed round, and looked at Monsieur the Marquis. There was nothing revealed by the many eyes that looked at him but watchfulness and eagerness; there was no visible menacing or anger. Neither did the people say anything; after the first cry, they had been silent, and they remained so. The voice of the submissive man who had spoken, was flat and tame in its extreme submission. Monsieur the Marquis ran his eyes over them all, as if they had been mere rats come out of their holes.

He took out his purse.

“It is extraordinary to me,” said he, “that you people cannot take care of yourselves and your children. One or the other of you is for ever in the way. How do I know what injury you have done my horses. See! Give him that.”

He threw out a gold coin for the valet to pick up, and all the heads craned forward that all the eyes might look down at it as it fell. The tall man called out again with a most unearthly cry, “Dead!”

He was arrested by the quick arrival of another man, for whom the rest made way. On seeing him, the miserable creature fell upon his shoulder, sobbing and crying, and pointing to the fountain, where some women were stooping over the motionless bundle, and moving gently about it. They were as silent, however, as the men.

“I know all, I know all,” said the last comer. “Be a brave man, my Gaspard! It is better for the poor little plaything to die so, than to live. It has died in a moment without pain. Could it have lived an hour as happily?”

“You are a philosopher, you there,” said the Marquis, smiling. “How do they call you?”

“They call me Defarge.”

“Of what trade?”

“Monsieur the Marquis, vendor of wine.”

“Pick up that, philosopher and vendor of wine,” said the Marquis, throwing him another gold coin, “and spend it as you will. The horses there; are they right?”

Without deigning to look at the assemblage a second time, Monsieur the Marquis leaned back in his seat, and was just being driven away with the air of a gentleman who had accidentally broke some common thing, and had paid for it, and could afford to pay for it; when his ease was suddenly disturbed by a coin flying into his carriage, and ringing on its floor.

“Hold!” said Monsieur the Marquis. “Hold the horses! Who threw that?”
He looked to the spot where Defarge the vendor of wine had stood, a moment before; but the wretched father was grovelling on his face on the pavement in that spot, and the figure that stood beside him was the figure of a dark stout woman, knitting.

“You dogs!” said the Marquis, but smoothly, and with an unchanged front, except as to the spots on his nose: “I would ride over any of you very willingly, and exterminate you from the earth. If I knew which rascal threw at the carriage, and if that brigand were sufficiently near it, he should be crushed under the wheels.”