Social Security Budget

From the president of the American Federation of Government Employees, a union that represents many Social Security employees:

Over the last two years, news about Social Security has been anything but good. Last April, the Social Security Board of Trustees released its annual report. The report estimated that the trust fund would be exhausted a year earlier than previously thought, in 2041, at which point the Social Security Administration would pay out 74 percent of today's promised benefit amounts. Yet a sound plan to shore up the trust fund has not materialized.

Another problem also threatens Social Security's fiscal integrity. In March 2006, SSA's Office of Inspector General reported to the Senate Finance Committee that SSA overpaid individuals receiving disability benefits an estimated $5.1 billion in funds to which they were not entitled. That report provided data on top of a September 2004 Government Accountability Office report, which also stated that SSA grossly overpaid disability benefits to ineligible recipients.

What's the connection between the overpayment reports and the bleak future of the Social Security trust fund? Fiscal irresponsibility on the part of the Bush administration and the Republican-controlled Congress, for not properly funding SSA's staffing and administrative budget. Social Security's problems are the result of poor financial planning and an adherence to an ideological disdain toward "big government."


In the Inspector General and GAO reports, SSA is faulted for not having the means to detect and prevent overpayments to disability beneficiaries whose medical conditions improved, who performed substantial work activity despite their impairments, or who were ineligible for other nonmedical reasons.

Both reports cited estimates by SSA actuaries that the agency would save $10 for every $1 spent performing disability case reviews. SSA responded to the reports by stating it created and implemented new automated systems to develop and adjudicate those reviews. However, the reality is that SSA does not have the staffing levels necessary to process those reviews, even with new tools, and still take and process the millions of benefit claims, Social Security card applications and post-entitlement issues the agency receives every year. In fact, SSA has stopped performing certain types of reviews altogether, citing lack of funding.

Each year, SSA submits a budget which the White House and Congress pare down. This year, SSA is facing further cuts in its administrative budget, which means fewer employees. Couple personnel cuts with a looming federal employee retirement rush, and there will be a human capital crisis, which will cause more wasteful overpayments and detrimentally impact public service. Longer waiting times in offices and over the phone, as well as significantly increased processing delays, will result.

The math is very simple. If $10 are saved for every $1 spent on reviewing disability cases and investing an additional amount equal to 10 to 20 percent of the overpaid $5.1 billion for new frontline staff for SSA, then the savings generated by promptly reviewing, detecting and preventing future overpayments would more than pay for the cost of hiring more employees. The trust fund would be better protected. Furthermore, waiting times and processing delays would be dramatically reduced, and the human capital crisis would be averted, thus protecting and improving service to the American public in more than one way.

To right-wing ideologues in Washington, D.C., increasing SSA's staff would look like embracing "big government." They have deluded themselves into thinking that SSA, one of the most popular and visible agencies in the federal government, can "do it all" with a shrinking budget. However, the truth is that the status quo will mean more wasted trust fund dollars and a steady erosion in the quality of SSA's public service.

The White House and Congress have a choice. They can either choose to act in a fiscally prudent manner by investing in SSA, or they can continue to allow the Social Security trust fund to hemorrhage more tax dollars due to a far-from-adequate budget.