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DOGE is flirting with the ‘third rail’ of American politics — errors could delay or disrupt benefits, a former top Social Security official says

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  • 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

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Wall Street’s recession odds are starting to look like a coin flip as Trump refuses to back down on his trade war 

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  • Wall Street is raising the probability that the US economy will slip into a recession, with some economists seeing 50-50 odds. That’s as President Donald Trump shows no signs of backing down on his aggressive tariff plans, including reciprocal duties set to take effect in a few weeks.

The likelihood that the US economy will slip into a recession is rising on Wall Street, with some economists even seeing 50-50 odds.

JPMorgan chief economist Bruce Kasman told reporters in Singapore on Wednesday that he now sees a roughly 40% recession risk, up from about 30% at the start of the year.

But he added that recession odds would rise to 50% or above if President Donald Trump’s planned reciprocal tariffs, which are due to take effect April 2, meaningfully come in to force.

“If we would continue down this road of what would be more disruptive, business-unfriendly policies, I think the risks on that recession front would go up,” Kasman said.

Meanwhile, former Treasury Secretary Larry Summers warned that the chances of a recession are about 50%, citing Trump’s tariffs, immigration crackdown, and mass federal layoffs, which are combining to cause sharp reductions in consumer and business spending plans.

When economic forecasts start being revised in a certain direction, there tends to be momentum, he told Bloomberg TV on Tuesday. And all the revisions are going toward less growth.

“I think we’ve got a real uncertainty problem,” Summers added. “I think it’s going to be hard to fix that. And we’re looking at a slowdown relative to what was forecast almost for sure and serious near-50% prospect of recession.”

Moody’s Analytics chief economist Mark Zandi raised his recession odds to 35% from 15% at the start of the, citing tariffs.

But if Trump follows through with his tariff plans and stays there for more than a few months, that would be enough to push the economy into recession, he told Bloomberg TV on Wednesday.

For now, he has hope that negotiations will lead to tariffs getting reeled back in, which is keeping his forecast below 50%.

“But I don’t say that with any confidence with each passing day,” Zandi said. “And of course, the uncertainty around all of this is doing damage.”

In fact, surveys of consumers and businesses show that they are turning increasingly gloomy about the economy amid tariff uncertainty and mass federal layoffs. Even executives in deep-red states that voted for Trump say seeing business conditions are collapsing.

Elsewhere on Wall Street, recession probabilities aren’t as high, but they are rising sharply. Market gurus Ed Yardeni and Eric Wallerstein said earlier this month that they see odds of a bear market and a tariff-induced recession at 35%, up from 20%.

And Allianz chief economic advisor Mohamed El-Erian lifted his recession probability to 25%-30% from 10% at the beginning of the year.

Treasury Secretary Scott Bessent was asked on NBC’s Meet the Press on Sunday if he could guarantee there won’t be a recession, and he replied that there are no guarantees, adding that his earlier comment of an economic adjustment doesn’t mean there has to be a recession.

“But I can tell you that if we kept on this track, what I could guarantee is we would have had a financial crisis,” he said. “I’ve studied it. I’ve taught it. And if we had kept up at these spending levels, that everything was unsustainable. So we are resetting and we are putting things on a sustainable path.”

For his part, Trump last weekend refused to rule out a recession, causing stocks to dive, then said days later that he doesn’t see one coming. But Trump isn’t budging on his trade policies, saying Thursday that “I’m not going to bend at all.”

And when asked about the sharp dive in approval in a recent CNN poll on how Americans view Trump’s handling of the economy, the White House defended his economic plans and pointed to his record during his first term.

“Since President Trump was elected, industry leaders have responded to President Trump’s America First economic agenda of tariffs, deregulation, and the unleashing of American energy with trillions in investment commitments that will create thousands of new jobs,” spokesman Kush Desai said in a statement. “President Trump delivered historic job, wage, and investment growth in his first term, and is set to do so again in his second term.”

This story was originally featured on Fortune.com

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Baidu releases reasoning AI model to take on DeepSeek

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Baidu Inc. released a new artificial intelligence model that articulates its reasoning, in an apparent bid to regain momentum against up-and-coming rivals like DeepSeek.

The Ernie X1 model by China’s internet search leader works similarly to DeepSeek R1 — which shocked Silicon Valley by offering comparable performance to the world’s best chatbots at a fraction of their development cost. Baidu’s reasoning model excels in areas like daily dialogs, complex calculations and logical deduction, it said in a statement Sunday.

Baidu also upgraded its flagship foundation model to Ernie 4.5. It immediately made all tiers of its service  — including the X1 model — free for its chatbot users, several weeks than earlier previously planned. 

The Beijing-based company was the first in China’s trillion-dollar tech sector to launch a chatbot modeled after OpenAI’s ChatGPT, but rival chatbots from ByteDance Ltd. and Moonshot AI soon took over in popularity. Open-sourced models like Alibaba’s Qwen and then DeepSeek gained greater recognition within the global developer community.

Ernie 4.5 outperforms OpenAI’s latest GPT 4.5 in text generation, Baidu said, citing several industry benchmarks.

Baidu has declared that it will make Ernie AI models open-source from June 30, representing a major strategic shift after the rise of DeepSeek. It also integrated the R1 model into its search engine — its bread-and-butter business.

The generative AI boom showed up in Baidu’s December-quarter results via a 26% jump in cloud revenue. That rise, driven by services provided to developers chasing computing power, was overshadowed by weak advertising sales amid China’s economic malaise.

Baidu concluded last month a drawn-out deal to acquire the YY Live streaming platform Joyy Inc. The $2.1 billion takeover released some $1.6 billion that Baidu previously deposited into escrow accounts, which it plans to invest into AI and cloud infrastructure.

This story was originally featured on Fortune.com

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China maps out plan to raise incomes and boost consumption

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China will take steps to revive consumption by boosting people’s incomes, the official Xinhua News Agency reported on Sunday, citing a statement from the State Council.

Other measures include stabilizing the stock and real estate markets, and offering incentives to raise the country’s birth rate, as the government tries to ease the deflationary pressures afflicting the economy.

Beijing will promote “reasonable growth” in wages and establish a sound mechanism for adjusting the minimum wage, Xinhua reported. It will also look at setting up a childcare subsidy system, as well as strengthening how investment can support consumption. 

Read More: Why China Is Struggling to Escape Cycle of Deflation: QuickTake

Invigorating consumption has been a challenge for the government since the end of the pandemic. Retail sales have been anemic while consumer prices fell into deflation in February for the first time in over a year.

At annual parliamentary meetings this month, the country’s leadership made boosting consumption their top priority for the first time since President Xi Jinping came to power over a decade ago.

Chinese stocks rallied the most in two months on Friday after the State Council, China’s cabinet, announced that officials from the finance ministry, the central bank and other government departments plan to hold a press conference Monday on measures to boost consumption.

Other highlights of the plan:

  • Enlarge variety of bond-related products suitable for individual investors
  • Adopt multiple measures to promote increase in farm incomes
  • Raise financial help for some students
  • Appropriately increase the basic pension for retirees
  • Ensure timely and full distribution of unemployment benefits
  • Support tourist attractions in expanding services and the reasonable extension of business hours
  • Support opening of duty-free shops in cities where conditions permit
  • Boost support for trade-in programs
  • Lower the interest rate on housing provident fund loans at an appropriate time
  • Scale back restrictions on consumption in an orderly manner
  • Accelerate the development of new technologies and products such as smart wearables and autonomous driving

This story was originally featured on Fortune.com

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