Elon Musk, CEO of Tesla Inc., has endorsed new loan verification measures implemented by the Small Business Administration. The move comes after it was discovered that the SBA had awarded $333 million to borrowers who were supposedly over 115 years old.
What Happened
Musk responded to an announcement from the Department of Government Efficiency, stating “No more loans to babies or people too old to be alive.” This refers to the use of stolen Social Security numbers to apply for loans. The SBA has since implemented new verification procedures, requiring date of birth verification for all direct loan applications. The agency has also paused processing for applicants under 18 or over 120 years old.
Background
The new measures follow revelations that the SBA issued 3,095 loans totaling $333 million to borrowers who were supposedly over 115 years old between 2020-2021. In one case, a purported 157-year-old received $36,000 in loans. This has raised concerns about fraudulent applications using stolen Social Security numbers.
Connection to Broader Concerns
This initiative connects to broader concerns Musk raised in February about Social Security Administration data accuracy. He shared statistics showing millions of Americans over 100 years old still listed as alive in the system. Musk joked, “Maybe Twilight is real and there are a lot of vampires collecting Social Security.”
Expert Insights
University of Michigan economics professor Justin Wolfers provided context, citing a July 2023 SSA Inspector General audit that identified approximately 18.9 million number holders born before 1920 without death information. The audit revealed that 98% of these cases receive no payments, with the anomaly largely attributed to pre-electronic record-keeping era deaths.
Criticisms and Concerns
Critics like Rep. Adam Schiff have voiced concerns about the potential undermining of Social Security, claiming that reducing access points for assistance could set up the program for failure.
Next Steps
The SBA’s new verification procedures represent early efforts by the Trump administration’s efficiency initiative to address data integrity issues affecting federal loan programs. The agency must balance operational priorities with resource constraints to ensure the effectiveness of these new measures.