Business
Column: GOP and Musk unveil a threat to Social Security
You may have been tempted to believe Donald Trump when he swore, along with some of his Republican colleagues, to protect Social Security. If so, the joke may be on you.
That concern emerged Monday when Sen. Mike Lee (R-Utah) uncorked a tweet thread on X labeling Social Security “a classic bait and switch” and “an outdated, mismanaged system.”
Twenty-three minutes after Lee posted the first of his tweets, it was retweeted by Elon Musk, who has been vested by Trump with a portfolio to root out inefficiencies in the government. Musk led his retweet with the comment “interesting thread”; if that wasn’t an explicit endorsement, it matched his way of amplifying others’ tweets, tending to give them credibility within the Musk-iverse.
It will be my objective to phase out Social Security, to pull it out by the roots.
— Sen. Mike Lee (R-Utah)
Lee’s tweet thread, along with Musk’s apparent concurrence, serves as an outline of the arguments the GOP may use to undermine faith in Social Security, the better to soften it up for “reforms” that will translate into costs imposed on retirees, disabled workers and their dependents.
I recently reported on all the ways that Trump could quietly or secretly undermine his pledge to protect Social Security. Lee’s thread and Musk’s apparent endorsement are different — they amount to a frontal attack on the program.
While delving into Lee’s screed, we should keep in mind that he’s a leader of the cabal with the knives out for Social Security. As I’ve reported, during his first successful Senate campaign in 2010, he unapologetically declared, “It will be my objective to phase out Social Security, to pull it out by the roots.”
Lee said that was why he was running for the Senate, and added, “Medicare and Medicaid are of the same sort. They need to be pulled up.”
So here he is, right out of the box.
Lee’s attack has four basic components. One is to bemoan the fact that Social Security is funded mostly by a tax, which he asserts the government can use for any purpose — not necessarily to cover retirement and disability benefits.
Another is to point out that the program’s reserves aren’t stored in individual accounts with workers’ names on them, but collected in “a huge account called the ‘Social Security Trust Fund.’”
A third is to claim that “the government routinely raids this fund. … They take ‘your money’” and use it for whatever the current Congress deems ‘necessary.’”
And a fourth is to complain that the trust fund is mismanaged: “If you had put the same amount into literally ANYTHING else — a mutual fund, real estate, even a savings account — you’d be better off by the time you reached retirement age, even if the government kept some of it!” He states: “Your ‘investment’ in Social Security can give you a return lower than inflation.”
None of these is a new argument — they’ve been swirling around the conservative and Republican fever swamp like a miasma for decades. They’ve been consistently refuted and debunked. Lee can’t be unaware of that. Some of his arguments have a tiny nugget of truth at their center, but in his hands are twisted and manipulated out of recognition. Consequently, we can label his claims for what they are: Lies.
Let’s examine them one by one. (I asked Lee via a message at his office to justify his tweets, but haven’t heard back.)
Yes, Social Security is funded by taxes. So what? Lee’s salary as a senator is funded by taxes too. Does that make it illegitimate? It’s true that once a tax is collected Congress can decide to spend it however it wishes. But it’s also true that the payroll tax was enacted jointly with the provisions of the Social Security Act that designated the revenue for Social Security benefits.
As Supreme Court Justice Benjamin Cardozo observed in 1937, writing for the majority in a 7-2 opinion upholding the constitutionality of Social Security, it was clear that Congress intended the payroll tax to fund the benefits, for lawmakers “would have been unwilling to pass one without the other.”
It’s proper to note here that no one has ever proposed diverting Social Security revenues for any other purpose without recompense — except Republicans such as Lee. George W. Bush proposed converting Social Security into private accounts, which would have been tantamount to such a diversion — and a gift to Wall Street money managers eager to get their hands on the program’s trillions of dollars.
But Bush’s 2005 privatization plan was stillborn and he quickly abandoned it.
It’s also true that the program’s revenues aren’t stored in individual accounts but in the trust fund. That’s right and proper: Social Security is a shared benefit; no one can know in advance what any worker’s benefits will be. They’re pegged to career earnings, but low-income workers get higher benefits relative to wages than higher-income workers. They’re also related to a worker’s personal and family situation — spouses, dependents, health and so on.
It also makes sense to invest the program’s revenues in a shared account, because large investments tend to perform better over time than those under the control of individuals, not least because that minimizes transaction costs.
That brings us to the notion that the government “routinely raids” the trust funds (there are two, actually — one to cover old-age benefits and the other to cover disability payments — but they’re generally treated as a single combined fund). The trust funds currently hold about $2.8 trillion in assets, all invested in U.S. Treasury securities.
Holding a T-bond, as anyone with the slightest knowledge of government fiscal policy is aware, means the bondholder has lent the money to the government, which can use it for any purpose Congress chooses and which must pay interest on the bond. Over the years, the government has used the money to build roads and other infrastructure and provide services. Using the borrowed money for these purposes allows the government to do so without raising income taxes, which would hit the wealthy harder than middle- or low-income Americans.
Lee should ask his well-heeled patrons if they’d prefer to pay higher taxes because the government couldn’t borrow from the Social Security reserves. Anyone have any doubts about how they’d answer? Me neither.
In any event, the financial transactions related to the buying and redemption of the program’s Treasury holdings are fully disclosed every year by the program trustees in their annual report.
What about Lee’s assertion that investing in “ANYTHING else — a mutual fund, real estate, even a savings account,” would make you “better off by the time you reached retirement age.” This statement is as solid a compendium of financial ignorance as one might wish, even coming from a U.S. senator.
To begin with, if Lee thinks the Social Security trust fund should be invested in something other than Treasurys, he can take that up with his colleagues on Capitol Hill. They’re the ones who have mandated, by law, that the trust fund can be invested only in Treasurys. Over the years, proposals to widen the portfolio have been raised and abandoned, for several reasons. Some were concerned about the potential conflicts of interest inherent in a government program investing in the stock market; others that the returns from market investments are too volatile.
Savings accounts? Is Lee kidding? The rate on savings accounts offered to the average customer of Bank of America, to choose a commercial bank at random, is 0.01% a year. As I write, a 10-year Treasury bond yields about 4.2% annually.
As for Lee’s assertion that “Social Security can give you a return lower than inflation,” the fact is that Social Security benefits are adjusted for inflation every year. They’re also lifetime benefits. Try to find an annuity plan that pays inflation-adjusted benefits for the life of the annuity holder and his or her spouse — for all but the richest people, it would be unaffordable or at least uneconomical.
Lee also reveals a fundamental misunderstanding about Social Security as a program. It’s not just a retirement program, but a combined retirement and insurance program.
Disabled workers — and their dependents — are entitled to benefits well beyond their contributions; the families of workers who die before retirement age receive benefits that include payments for children through age 17 — through age 18 if they’re in school. If those benefits were based on the balances in a worker’s individual account, then the families of those who have suffered untimely deaths could receive a pittance, running out while still needing help.
Lee concludes by urging his followers to “acknowledge the truth: Social Security as it now exists isn’t a retirement plan; it’s a tax plan with retirement benefits as an afterthought.” This is an outright falsehood. As it now exists, Social Security isn’t just a retirement plan, but a disability program. It’s funded by taxes, but to call retirement benefits “an afterthought” is so wrong it’s frightening.
What should we think about all this? Lee is a member of the Senate majority; his proposals could be a real threat to the program. The fact that they garnered an “attaboy” from Elon Musk should be their death knell. Let’s hope so.
As the war in Iran strangles the flow of oil around the globe, California’s jet fuel reservoirs are running low.
The state — which refines much of its own fuel in El Segundo and elsewhere but still relies on crude oil imports — has seen its jet fuel stock decline by more than 25% from last year’s peak to a level not seen since 2023, according to data from the California Energy Commission.
The supply is shrinking as a global shortage is already affecting travelers’ summer plans with canceled flights and higher fares. It could even affect plans for people coming to Los Angeles for the 2026 World Cup, which starts in June, said Mike Duignan, a hospitality expert and professor at Paris 1 Panthéon-Sorbonne University.
“People don’t know exactly how this is going to escalate,” he said. “There’s a huge black cloud over the sea for the World Cup and the travel slump that we’re seeing is all linked to this oil shortage.”
As fuel supplies shrink, flight prices are rising. Airlines are adding baggage surcharges to cover fuel costs. Several routes leaving from smaller California hubs, including Sacramento and Burbank, have already been canceled.
Air Canada has suspended flights for this summer, cutting routes from JFK to Toronto and Montreal.
“Jet fuel prices have doubled since the start of the Iran conflict, affecting some lower profitability routes and flights which now are no longer economically feasible,” the airline said in a statement last week.
Europe had just more than a month’s supply of jet fuel left last week, the International Energy Agency said. In an effort to cut costs, the German airline Lufthansa slashed 20,000 flights from its summer schedule this week.
Without a fresh oil supply flowing through the Strait of Hormuz, the situation is unlikely to improve, experts said. The oil reserves countries and companies have in storage are helping fill shortfalls, but the squeezed supply chain could still wreak economic havoc.
“When there’s a shortage somewhere, everything is affected,” said Alan Fyall, an associate dean of the University of Central Florida Rosen College of Hospitality Management. “Airlines are being cautious, and I would say that is a very wise strategy at the moment.”
California’s jet fuel stock reached its lowest levels in two and a half years at 2.6 million barrels last week, down from a peak of more than 3.5 million barrels last year.
The California Energy Commission, which tracks fuel inventory, said the state’s current jet fuel stock is sill sufficient.
“Current production and inventory levels of jet fuel are within historical ranges,” a spokesperson said. “Although supply is tight, no structural deficit has emerged yet. The present tightness reflects short‑term global market stress. As long as refinery operations remain stable, California is positioned to meet regional jet fuel needs.”
Europe has been affected more directly because it relies on the Middle East for the vast majority of its crude oil and many refined products, experts said. California gets crude oil from the Middle East but also from Canada, Argentina and Guyana.
The state has the capacity to refine around 200,000 barrels of jet fuel per day, most of it from refineries in El Segundo and Richmond.
The amount of crude oil originating in the state has been declining since the early 2000s, as state regulations and drilling costs have led to more imports.
California has become particularly vulnerable to supply-chain shocks like the war in Iran, says Chevron, one of the companies that provides jet fuel in the state.
“The conflict in the Mideast Gulf has exposed the danger of California’s decision to offshore energy production,” said Ross Allen, a Chevron spokesperson. “Taxes, red tape and burdensome regulations cost the state nearly 18% of its refinery capacity in just the past year, and we urge policymakers to protect the remaining manufacturing capacity.”
In 2025, 61% of crude oil supply to California’s refineries came from foreign sources, according to the California Energy Commission. Around 23% came from inside the state, down from 35% five years ago.
The state’s refining capacity has also been declining, said Jesus David, senior vice president of Energy at IIR Energy. The West Coast region’s refining capacity has decreased from 2.9 million to 2.3 million barrels a day since 2019, he said.
“California’s had issues prior to the war,” David said. “Nothing new has been built over the past 30 years, and California has closed a lot of capacity.”
The result is higher prices for both gasoline and jet fuel in the state. Jet fuel at LAX costs close to $15 per gallon this week, compared with almost $10 at Denver International Airport and $11 at Newark International Airport.
Gasoline prices have also been hit hard by the global conflict. Average gas prices in California are close to $6 a gallon, around $2 higher than the national average.
The West Coast is a “fuel island” because it’s not connected by pipelines to the rest of the country, United Airlines chief executive Scott Kirby said in an interview last month. That means oil and refined products have to be brought in by ships.
“Fuel price is more susceptible to supply weakness on the West Coast than anywhere else in the country,” Kirby said.
Some airlines might not survive the turmoil if oil prices don’t level out soon, he said. Spirit Airlines, a budget carrier based in Florida, is reportedly facing imminent liquidation if it isn’t bailed out by the Trump administration.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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