DOGE is coming for the “third rail of American politics.” Changes to Social Security and the FDIC could immediately impact millions of Americans—here’s what HRs need to know.

Social Security, the federal program that sends benefits to retirees (among others), has found itself in The Department of Government Efficiency’s (DOGE) crosshairs.

Social Security is broadly popular on both sides of the aisle; so much so that it’s considered the ultimate “third rail” of American domestic policy—an issue so charged that merely touching it could produce shocking results.

And with over 70 million Americans on Social Security, any changes to benefits could impact up to 20% of the U.S. population.

Musk and co., however, are undeterred.

But Social Security isn’t the only post-World-War-I program Musk’s got his eye on. The Federal Deposit Insurance Corporation (FDIC) is also bracing for DOGE cuts.

The FDIC guarantees that money in U.S. banks up to $250,000 is insured by the federal government. Originally created in an attempt to prevent the runs on banks that defined the Great Depression—a phenomenon modern readers might remember from this scene in the Christmas classic, It’s a Wonderful Life—the FDIC has been a cornerstone of consumer confidence in the U.S. banking system for nearly a century.

Here are the changes coming to Social Security, the FDIC—and what HRs need to know to stay ahead.

Trump’s nominee for Social Security commissioner, Frank Bisignano, appeared before Congress on March 24th. Bisignano wouldn’t respond to a question about whether Social Security was a Ponzi scheme (a term Musk used to describe it on the Joe Rogan podcast) only stating the program is a “promise to pay.”

Bisignano is the CEO of Fiserv, a financial technology firm. At his hearing, he criticized the agency’s failure rate—which is less than 1%. At the time of print, Bisignano has not been confirmed by Congress.

Regardless, Musk is already moving: DOGE plans to shutter 47 Social Security locations, with 26 offices set to close this year. DOGE also plans to layoff 7,000 of the current 57,000 Social Security Administration workers.

But some of Musk’s moves are already receiving pushback. A controversial identity verification measure that prohibited identification by phone has already been partially walked back. However, new applicants for retiree, survivor, or auxiliary benefits will not be able to verify their identities over the phone, beginning April 14th.

Trump has said he will not touch Social Security benefits in his efforts to root out government waste. But Social Security represents roughly 20% of the federal budget—something Elon Musk well knows.

Musk set a goal of cutting $1 trillion from the federal government’s budget, approximately 15% of federal spending in 2024. Cuts to USAID and the Department of Education are simply not big enough to make the $1 trillion goal. “Most of the federal spending is in entitlements,” Musk said. “So that’s the big one to eliminate.”

Critics of the currently proposed Social Security cuts are concerned that office closures and staff reductions will hamstring the agency. With a reduced workforce, some wonder if Social Security checks will reach beneficiaries on time.

Others are concerned that the office closures, coupled with the new policy that ends phone identification for new enrollees, will make it prohibitively difficult for some seniors to enroll in benefits.

Still others, like Senate Minority Leader, Chuck Schumer (D-NY), think that Musk’s plan is to make the agency so ineffectual that it can eventually become privatized.

Taken together, the changes to Social Security point to a system that’s harder to navigate for those seeking benefits. Since many who receive Social Security benefits are still working, HRs will likely have employees who are affected by these changes.

HR can support employees by keeping them updated on Social Security changes and giving them the tools they need to navigate an increasingly complex benefits system.

Here’s how HRs can support employees:

• Hold an Info Session: Keep employees in the loop by organizing an informational session. Here are the important points to cover:

• Explain that Social Security offices are closing and some new applicants will need to verify their identities in-person or online to receive benefits. You can use this state-by-state list of anticipated 2025 closures to let employees know which offices in your state will be affected.

• • • Inform employees that new enrollees for retirement, survivor, or auxiliary benefits will need to verify their identities online or in-person April 1st.
    • Remind employees that they are legally entitled to receive benefits if they qualify. Currently, there is no legislation that would change the amount of their Social Security payments.

• Create Support Policies: If you work in a rural area that might require workers to go to an office to verify their identities, create policies to support them. Consider creating a point-person within the HR staff who can help employees verify their identities online. You could also consider offering a day of PTO to staff who must go in-person to verify their identities.

• Stay Informed: Changes are happening rapidly within the Social Security Administration. Staying informed will help you communicate changes to your employees in a timely fashion. If many of your employees will be affected by changes to Social Security, consider setting up a Google alert to receive updates.

As if the changes to Social Security weren’t enough, new reforms are coming to the FDIC, too. As of January, the agency has laid off 9% of its workforce. These staff reductions make it harder for regulators to do routine banking health checks.

These inspections are important because they identify potential areas of risk, and raise the alarm if necessary. For example, if a bank was holding investments that had lost value, but those losses hadn’t yet been realized because the bank hadn’t sold the investments at a loss.

Investigating banks like this helps ensure that banking risks are kept in check, protecting consumer assets. Without proper surveillance, bubbles—like the 2008 housing bubble—are more likely to form undetected.

The FDIC also recently announced that banks no longer need advance permission to engage in crypto-related activities, so long as they personally manage their risks. This was a reversal of previous FDIC policy, which required banks to receive FDIC pre-approval for crypto activity.

Fewer staff to document and call out risky behavior combined with lower oversight on digital currencies means consumer confidence in U.S. banking could take a hit. If consumers feel that their FDIC $250,000 guarantee is no longer secure, they may start electing to save money elsewhere. Businesses too may start seeking other banking options.

More than ever, employees need financial literacy training to navigate the increasingly complex financial landscape. Opportunities to take financial literacy courses could also be a differentiating attractive benefit. If you think your employees would appreciate and benefit from financial literacy courses, consider offering them as a benefit. Courses on investing, 401ks, stocks, bonds, and more, are likely to interest employees who want to safeguard their financial future.

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The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.