• The Social Security Administration is laying off 12% of its workforce, and the loss of expertise, especially on key systems, could put benefits at risk as DOGE tries to look for fraud, according to a former staffer at the agency. 

Historically, toying with Social Security benefits has been long seen as a political “third rail,” meaning whoever touches it will get zapped.

The White House said in a press release it won’t cut Social Security, Medicare, or Medicaid benefits, but that doesn’t rule out the chances of a mistake. 

Amid the Department of Government Efficiency’s cost-cutting endeavor within federal agencies in recent weeks, a former top Social Security Administration staffer is worried about benefit interruptions as the agency loses expertise while DOGE looks for fraud in its systems.

In February, the SSA released a statement announcing plans to lay off roughly 12% of its 57,000 employees through voluntary resignation and a reduction-in-force plan. Meanwhile, President Donald Trump and world’s richest man Elon Musk, the figurehead for DOGE, have claimed fraud on a massive scale, though experts have said it’s limited. 

Still, DOGE is looking for evidence and seeks full access to the SSA’s Enterprise Data Warehouse (EDW), which houses information about anyone with a Social Security number, including financial and banking information, according to a declaration filed in a lawsuit last week by former senior official Tiffany Flick. 

She said that SSA typically doesn’t provide full access to all data systems—even to the most skilled and highly trained experts—to protect against inadvertent or unauthorized changes to the system. 

Flick said DOGE officials lacked interest in understanding SSA’s systems and programs, while disregarding critical processes like providing the “least privileged” access on a need-to-know basis.

“That combined with a significant loss of expertise as more and more agency personnel leave, have me seriously concerned that SSA programs will continue to function and operate without disruption,” she said.

Flick said that inadvertent error poses the risk of “benefits payments not being paid out or delays in payments.”

The SSA information technology programs are made up of complex systems that use old programming languages that require specialized knowledge, she warned, adding that they are easily broken if long-standing procedures aren’t followed.

“I understand that DOGE associates have been seeking access to the ‘source code’ to SSA systems,” Flick wrote. “If granted, I am not confident that such associates have the requisite understanding of SSA to avoid critical errors that could upend SSA systems.”

In addition to her concerns regarding benefits, Flick is not convinced DOGE has the proper experience to prevent sensitive information from getting into the hands of bad actors. 

“In such a chaotic environment, the risk of data leaking into the wrong hands is significant,” she said.

Andrew Biggs, an American Enterprise Institute senior fellow, told Axios the agency could increase productivity and efficiency, but he doubts DOGE’s ability to do so due to its lack of experience.

“I just find it hard to accept that you can go in there having been there just a few weeks, and do these far-reaching changes having fully thought out the consequences of them,” he said.

Biggs says while checks are automated and won’t be disrupted, possible disruptions to customer service bring concerns regarding budget cuts.  

“It’s kind of a foot race between whether they can improve service before these cuts are impacting service,” Biggs said. 

The White House, the U.S. DOGE Service, and the SSA did not respond to Fortune’s request for comment.

This story was originally featured on Fortune.com

Boarding Air Force One on March 12, President Donald Trump quipped, “We’re going to raise hundreds of billions in tariffs; we’re going to become so rich we’re not going to know where to spend that money.” Despite hand-wringing from CEOs, the stock market tanking, and widespread condemnation from our trading partners, the President is forging ahead with his trade war. In doing so, he’s counting on big windfalls from these import taxes, along with the savings he boasts will flow from Elon Musk’s DOGE campaign, to fulfill his promise of sharply reducing America’s yawning fiscal deficits. But in examining five facts about how tariffs actually work, it’s clear that they will have a huge effect on the economy—just not the one the President is projecting.

Fact 1: Tariffs are a tax that will be mainly, if not wholly, borne by U.S. consumers

Trump has always insisted that other nations or foreign companies will pay the full cost of the tariffs that the U.S. collects on imports. During campaign stops in September, he stated, “It’s not a tax on the middle class. It’s a tax on another country,” and “It’s not going to cost you, it’ going to be a cost to another country.”

As a first step, it’s important to understand who actually makes the payment. When a Chinese or Canadian exporter ships components or finished goods to one of the 328 US ports of entry, the U.S. importer purchasing the goods—not the exporter or another nation—pays the tariff, also called an “import tax,” to the U.S. Customs and Border Protection Agency. The tariff is assessed as a fixed percentage of the price the exporter’s charges pre-tariff. That charge gets added to the price the U.S. importer pays.

The real cost of the tariff, however, can fall in part or whole on three parties. If the U.S. just increased tariffs on auto parts by 10%, the overseas producer could reduce its price by a like amount to maintain its sales to Ford or GM. Or, if the exporter tacks the 10% duty onto its selling price, the automakers could absorb the extra expense; they’d keep their car prices the same, and accept lower margins. In theory, if between them, the foreign exporter and the U.S. importer swallow the tariff, the cost won’t fall on the U.S. consumer. On the other hand, a U.S. importer shouldering the charge would be making a lot less money, and gain less earnings for building new plants and expanding its workforce.

But that’s not how it works in practice, according to studies of the real-world impact of past tariff increases. In a paper on the Trump tariff regime of 2018 and 2019 published in the Quarterly Journal of Economics, the four economist-authors analyzed the effect of the increase in tariffs during Trump’s first term from an average of 3.7% to 26.8% on almost 18,000 products including many types of steel, aluminum, and appliances, and covering $421 billion or over 18% of all U.S. imports. Their review found that for steel, exporters actually dropped their prices to U.S. importers—a group that would encompass builders, wholesalers, canners, and other customers, fully offsetting the tariffs—thereby ducking a big blow to their U.S. sales.

But that was an outlier. Overall, prices for the targeted goods rose 21.9% on average between the time the tariffs struck in 2018 and the close of 2019. The study found that, steel aside, “U.S. consumers have borne the entire incidence of U.S. tariffs.” Americans at the auto lots and supermarkets shouldered what’s known as a “one hundred percent pass-through” of the tariff tax. A second analysis of the first Trump wave from the National Bureau of Economic Research, “Who’s Paying for the Tariffs?” (2020), reached a similar conclusion, noting: “We have found that in most sectors, tariffs have been completely passed on to U.S. firms and consumers.” The article doesn’t posit how much goes to consumer prices versus lower margins, but finds the U.S., not foreign companies, felt the full force of Trump’s first round to import taxes.

Fact 2: Tariffs don’t accelerate growth in output and employment, they throttle both

President Trump often trumpets that “tariffs are going to be the greatest thing we’ve ever done for our country.”

But the experience from his first term doesn’t confirm this confidence, according to “The Return of Protectionism,” as updated in January 2020. The paper details that tariff increases do indeed create winners and losers, but on balance, they hurt the economy more than they help. The authors estimate that domestic producers gained $24 billion in sales per year in 2018 and 2019, as tariffs raised prices for competing imports, making U.S.-produced goods more attractive to consumers and businesses. The duties also generated $65 billion in annual tax revenue. Downside: The tariffs raised prices to U.S. customers by $114 billion each year. Hence, according to the reckoning in the Journal of Economics, the U.S. economy suffered a net loss from the first big experiment of $25 billion (the $114 billion extra spent by consumers less the $89 billion from taxes and increased revenues by U.S. companies).

Domestic producers, the study estimates, would have benefited much more if they hadn’t lost $8 billion of their own export sales due to retaliation from abroad. All told, the authors estimate that tariffs shaved 0.13% from annual GDP in 2018 and 2019. Upshot: Sans tariffs, our output would have averaged 4.9% over the two-year span instead of the 4.75% the U.S. achieved. Keep in mind that a tariff increase that’s a fraction of what Trump’s envisioning drove this meaningful zap to GDP.

The most in-depth, historical analysis on the topic, an IMF working paper from 2019, appeared too early to assess the duties imposed in Trump’s first term. But they were a harbinger for what happened then—and what’s ahead. The four authors studied the impact of tariff increases from 1963 to 2014 across 151 nations. Their finding: a rise of 3.5% in import duties shaved 0.4% from annual GDP growth after five years, and led to a 1.5% increase in unemployment. And the authors didn’t calculate the extra pounding from our producers’ loss of exports triggered by retaliation.

Fact 3: Big tariffs will not reduce the Trump-hated trade deficit

A White House fact sheet from February 14 states that the major goal of Trump’s “Fair and Reciprocal Plan” for widespread tariffs is to “reduce our large and persistent annual trade deficit.” Trump talks constantly about how the import duties will narrow the lopsided exchange of goods between the U.S. and our foreign cohorts, rhetorically multiplying the size of the ravines to bolster his case.  

But the President’s offensive won’t work, because it collides with a basic law of economics. The annual trade deficit by definition must match the difference between all U.S. savings and all U.S. investment. For many years, American taxpayers and businesses, all in, haven’t been saving nearly enough to fund the huge demand for our stocks and privately issued bonds, new factories and data centers, housing project and stakes in PE funds, and sundry other profit-spinning ventures. The reason: gigantic budget deficits expected to reach a staggering $1.9 trillion this year at the federal level. Uncle Sam is paying high rates to hoover up a huge share of America’s savings that would otherwise flow into private investments.

The U.S. shortage of savings to investment last year hit $971 billion, and it precisely equals the trade deficit in goods of $1.2 trillion, less our services surplus of roughly $300 billion. That savings less investment and the trade deficit must match is called an “identity” in economic jargon. (Services usually aren’t subject to tariffs, so it’s the duties on goods that are will reshape the economy moving ahead.) Why must the numbers equal out? Because foreign nations amassed net proceeds of $971 billion selling stuff to the U.S. in 2024. All that money is denominated in dollars, and those dollars are only good Stateside. Hence, foreigners send all that cash back across our borders to fund all the investments we can’t cover, mainly because such a big chunk of our savings go to funding the ravenous budget deficit.

Foreigners are willing to keep accumulating all those greenbacks because they richly prosper investing in the nation that’s generating the world’s highest returns. As a result, says economist Steve Hanke of Johns Hopkins, “The U.S. has been able to finance the difference between our low savings, driven by the budget deficit, and big investments because of our vibrancy, with relative ease.” The big inflows from abroad are a boon to America, he says, because they allow our citizens to spend a lot more than if we had to balance our own federal budget, and at the same time pour money into new factories, fabs, and transforming old-line family outfits into models of modern efficiency. “We have the reserve currency and biggest and best capital markets,” says Hanke. “If you can finance deficits with money from abroad, they can be a wonderful thing. They’re allowing America to consume much more than we produce.”

Hanke adds that Trump has gotten the trade issue topsy-turvy. “Trump can moan all he wants about foreigners causing our trade deficits,” says Hanke. “But they’re not caused by foreigners engaging in unfair practices. They’re homemade. Any country posting a savings-investment deficiency will post a trade deficit the same size.”

The upshot: Tariffs could lower imports, but unless the U.S. either saves a lot more or invests far less, the trade balance won’t change. In fact, the big legacy from the original Trump tariffs is just that: Exports to China dropped sharply, and overall export expansion lagged the rise in imports. But the trade deficit (including services) expanded 63% since 2019.

Fact 4: Tariffs will do little if anything to shrink the federal budget deficit

The independent, nonpartisan Tax Foundation estimates that tariffs, if enacted as currently planned, would raise around $300 billion in 2026. That’s big money, equivalent to about one-eighth of what the US collected in personal income taxes last year. The question is whether the downdraft on GDP would flatten or lower folks’ incomes to the point where less cash would flow to the Treasury in total than if U.S. didn’t resort to tariffs. Most likely, they’re a false panacea for our fiscal profligacy. For example, the Tax Foundation predicts that the Trump tariffs would shave around $2 trillion from where annual GDP would be without them by around the late 2020s. That drag on growth could easily reduce the growth in tax receipts by more than the tariffs would collect.

Besides, tariffs are widely regarded as a poor tool for raising revenue. “They don’t raise much money unless they’re really high,” says Rose. “And when they’re really high, that just encourages smuggling. Tariffs are a really inefficient means of taxation. In the past 70 years, the world has turned to income and VATs to fund their budgets. No large country uses tariffs.”

Fact 5: We’re not getting fleeced by conniving, protectionist trading partners

Trump’s view that America is getting unjustly skewered by nations that hobble our imports while profiting richly from America’s wide-open markets doesn’t align with the data. Of course, all of our trading partners impose some especially high charges or technical barriers to protect their favorite products. Canada, for example, deploys a “supply management” system to keep dairy prices high within its borders, a system that puts an effective limit on U.S. imports. But the U.S. harbors its own market-closing practices as well, including a quota system for sugar imports and barriers shielding many dairy products, including powdered milk.

But in general, of our major counterparts mainly embrace free trade just as ardently as we do—or as we used to. For example, pre-Trump and retaliation, the EU put an average charge of 1% on US imports, exactly the same toll we imposed on its exports. Last year, the bloc collected just $3 billion in tariffs on U.S.-made goods, less than half what we charged the EU.

Canada and Mexico both exact somewhat higher tariffs on the US than the other way around. The average rate on US goods entering Canada is 3.1%, compared to 2.0% for their products flowing south across our borders. We pay 5.2% to sell stuff in Mexico, 1.8 points more than we our take on goods crossing the Rio Grande. Closing these differences would greatly benefit our exporters. But they’re far too slight to justify a trade war—especially since the backlash from both nations could prove a killer for our producers whose fortunes rely heavily on sending the likes of heavy machinery, chemicals, and plastics to those countries.

Even China exacted just 2.7% on average pre-trade war, while the U.S. since the Trump bumps in 2018 and 2019 was squeezing 10% on imports from its giant rival, a toll he just doubled.

Look at what Trump’s announced, and assume he does all of it. Trump’s planning 25% across-the-board tariffs on Canada, Mexico, and the EU, except for a 10% charge on Canadian energy imports. He’s already doubled the rate on China to 20%. The charge on autos, steel, aluminum, and autos from around the globe, set at the familiar 25%, is already in place, and Trump promises the same rate on all cars, semiconductors, and pharmaceuticals. Lumber, copper, and ag products are also in his sights. This immense list covers an astounding $2.1 trillion in imports or around half the 2024 total of $4.1 trillion.

Today, the average tariff charged across all U.S. imports is 2.5%, about double the number before Trump imposed his first round in 2018 and the Biden administration kept most of those levies in place. Now the Tax Foundation estimates that on what’s already been announced, the norm will rise by over 11 points to 13.8%. The long-term cost, it forecasts, will be immense, amounting to a 0.55% reduction in annual GDP, about a one-eighth reduction in what the CBO views as our probable rate of expansion in the years ahead.

Someone may get rich from this trade war, but it’s not going to be America.

This story was originally featured on Fortune.com

The second Trump administration has been characterized in large part by a focused effort to cut down the number of federal employees. 

Through the Office of Personnel Management and Elon Musk’s Department of Government Efficiency, the president has used highly unusual resignation offers and layoffs to shrink the workforce across agencies including the Department of Education and the Department of Veterans Affairs. There’s no official number on how many people have been laid off, but 62,530 government positions have been cut so far this year, according to data published earlier this month from global outplacement firm Challenger, Gray, & Christmas. There are likely more cuts to come. 

Unions have played a major role in legal challenges to the mass firing of federal workers. On Thursday, two separate rulings came down ordering the Trump administration to reinstate these terminated employees. One ruling in response to 20 Democrat attorneys general calling for the reinstatement of fired workers came from a federal judge in Maryland. The other was issued by a judge in the U.S. District Court for the Northern District of California in response to a case brought by dozens of labor unions and advocacy groups. U.S. District Judge William Alsup ordered that six federal agencies reinstate thousands of probationary employees that were fired under the guidance of OPM, a move he declared illegal. The Trump administration has already filed an appeal in that case. 

The American Federation of State, County, and Municipal Employees (AFSCME) was one of the plaintiffs in that second challenge. The union represents 1.4 million public service workers across the country in federal, state, and local government, as well as the nonprofit sector. AFSCME’s president, Lee Saunders, spoke with Fortune about the threat that public sector workers are under, what his members are feeling, and how the union plans to fight back. 

This interview has been edited and condensed for clarity.

Fortune: What are AFSCME members feeling right now? 

President Saunders: They’re feeling under attack. They believe in the importance of public services, and yet you see them being attacked every single day by this current administration. 

They’re frightened, but they also know that they’ve got to make their voices heard and they’ve got to fight back, and that’s exactly what they’re doing. Their union is supporting them 100% by talking about the importance of public service, and challenging some of the things that this administration is doing, and whether it’s in the courts, or whether it’s in the media, or whether it’s on the streets. We’re going to continue to do that to make our point and get our point across.

AFSCME is one of the plaintiffs in the case which was just ruled in favor of reinstating fired probationary federal workers. Many are seeing this as a win for federal workers, but that ruling does not affect this week’s deadline set by the Trump administration requiring all agencies to send the president and the OPM plans for more layoffs. What could the future look like for these workers? 

This is a huge victory for these workers.

It will be challenged, but we’re going to continue to put the full force of the union behind filing these kinds of lawsuits. That’s really important, but we’ve also got to go on offense and not play defense all the time, and we’re going to continue to do that. What we’re doing right now is organizing and mobilizing and educating our members across the country by having phone calls, by going to town hall meetings.

One of the things that we’ve got to do is continue to organize. Seventy percent of Americans believe that unions are absolutely necessary in this country and 88% of young people [view them favorably]. We’re going to spend resources, and we’re going to be talking to workers, asking them to be represented by us or other unions so they have a seat at the table. 

It feels like every day there is a new development related to the DOGE layoffs. How would you advise people to keep track of the whirlwind of actions?

I think it’s up to AFSCME and the labor movement and our allies and friends to continue to talk about what this administration is trying to do to hurt working people. We’ve got to enlist people within the labor movement and outside the labor movement to make their voices heard. We cannot just sit idly by and be silent when this destruction—and that’s exactly what this is—is taking place at the federal level, [which will] roll down to the state and local level, with possible huge cuts in federal programs. State governments rely on federal money to fund programs at the state level; they get about 33% of [their revenue] from the federal government. That helps provide public services at the state, city, and local level. 

It’s all about continuing to educate. It’s all about asking [workers] to not be silent, but to make their voices heard and to fight back like never before. 

[When asked for comment, a spokesperson for the White House told Fortune: “President Trump returned to Washington with a mandate from the American people to bring about unprecedented change in our federal government to uproot waste, fraud, and abuse.”]

Elon Musk reposted a Tweet implying that public sector workers were responsible for mass murders under people like Hitler, Mao and Stalin. What do you make of this comment, and the attacks on public sector workers generally?

I will try to control my language, but… it is a hateful comment for him to [retweet] that and compare our public sector workers and our members saying that “Hitler, Stalin and Mao didn’t murder millions, but [their] public sector service workers did.” Now just think about that. That’s where he’s coming from, and we’ve got to get that message out. 

He has no clue what workers are faced with every single day. He has no clue what they do to improve the lives of our citizens in our communities across the country and to improve upon public services, yet he makes a statement like that. I mean, it is unbelievable, and we’ve got to make sure that people understand that this is what he is saying, and this is what folks in this administration believe.

[Fortune reached out to Elon Musk but did not get a response.]

How can unions protect workers if the government wants to fire them?

We’re filing these lawsuits—that’s number one. We are pushing even though we understand that the climate here in Washington, D.C. is not the best. But we’ve still got to continue to go on the offense, as I said earlier. We are supporting the PRO Act, which would give workers the right to have a seat at the table to improve labor labor law in this country. We’re doing the same thing with the Public Freedom to Negotiate Act for public service workers.

We have the ability to mobilize every single day—to mobilize union members, but also workers who aren’t in unions in our communities across the country. Because this is impacting them too. The actions that are being proposed have an impact on everyone that relies upon public services: Medicaid, Medicare, Social Security. All of these programs are under attack, and we’ve got to do what we do best, and that’s exactly what we are doing.

This narrative against public sector workers has come on quickly and strongly. How do you combat the sentiments coming from those with huge platforms like Trump and Musk?

It’s not only federal workers. It really is all workers. There’s an attack on all workers right now. I guess the way that I can answer that question is that reality is now hitting people in the face. I mean, they’re feeling it. People are being laid off indiscriminately. People are being fired. Their rights are being taken away from them. Services that the American people relied upon are being cut, and they’re proposing to do a lot more damage. So I mean, here’s the playbook that they talked about, and now they’re putting in an action, and we’ve got to make sure that people understand the impact that it’s going to have on them and their families. You’ve got to react to it in a way where we ask people to fight back and to make their voices heard. You cannot sit by silently and watch this happen.

This story was originally featured on Fortune.com