Senate Bill Continues Eroding Social Security Operating Funds

This article was posted on the Center on Budget and Priorities blog by Kathleen Romig * June 9, 2016 at 3:30 PM

The 2017 funding bill for the departments of Labor, Health and Human Services, and Education that the Senate Appropriations Committee approved today would continue squeezing the Social Security Administration (SSA), which faces a record workload as the baby boomers age into their peak years for retirement and disability.  

As our report explains, SSA’s core operating budget shrank by 10 percent from 2010 to 2016, after adjusting for inflation. It would shrink another 1 percent under the Senate bill, after inflation.  

The cuts have hampered the agency’s ability to perform essential services like determining benefit eligibility promptly, paying benefits accurately and on time, and responding to the public’s questions. 

As a result, SSA’s track record of exemplary customer service has suffered:

• A hiring freeze necessitated by budget cuts has harmed SSA phone service.  Callers to SSA’s 800 number average over 15 minutes on hold, and nearly 10 percent receive busy signals.
• SSA has had to close hundreds of field offices and mobile offices, and to reduce hours at remaining offices.  As a result, a typical applicant must wait over three weeks for an appointment.
• When the number of applications for Social Security Disability Insurance rose dramatically in the Great Recession, SSA lacked the resources to keep up with the spike in hearings for applicants appealing their rejections.  The average wait for a hearing rose from 360 to 540 days between 2011 and 2016, and the hearings backlog grew to over 1 million, an all-time high.  
• Lack of adequate staff forced SSA to delay critical behind-the-scenes work necessary to pay benefits accurately and on time, such as awarding widows’ benefits when their spouses die and adjusting benefits for early retirees and disabled workers with earnings.  Beneficiaries wait an average of four months for SSA to complete these tasks.

Nearly every American contacts SSA at some point — in person, on the phone, or through its expanding online services — and at the best and worst moments of their lives.  They use SSA services when they have a baby, get married, or start a new job.  They depend on SSA staff to help them when they face a life-altering disability, the death of a spouse or parent, or decisions about financing their retirement years.  They expect excellent service and — importantly — they have paid for it.  Social Security’s administrative funding comes from workers’ Social Security contributions, but only to the extent that Congress allows SSA to spend it.

Failing to invest in customer service is penny-wise and pound-foolish.  As then-Social Security Commissioner Michael Astrue, appointed by President George W. Bush, told the Senate in 2012:

At some point, we will have to handle every claim that comes to us, every change of address, every direct deposit change, every workers’ compensation change, every request for new or replacement Social Security cards. The longer it takes us to get to this work, the more it costs to do.

Policymakers should give SSA enough funding to give Americans the excellent Social Security service they have earned.