January 10, 2017
SSA Funding Cuts Mean Hiring Freeze, Fewer Paper Statements
Thanks to budget cuts, the Social Security Administration (SSA) is stretched thin and the public is going to see further reductions in services.
On January 9 SSA announced it will only send paper annual statements to people age 60 and over, who are not getting benefits and don’t have a “My Social Security” account. This will save $11.3 million in FY 2017. Before, 47.9 million workers were getting statements mailed to them every 5 years until age 60.
SSA employees assist millions of Americans each year — taking applications, answering questions in person and on the phone, verifying benefit amounts, and reviewing appeals, among other things. The cost of performing these services is less than one penny out of each dollar paid in FICA and SECA taxes, which is a very good value.
Congress decides each year how much money SSA can use to manage its programs and pay workers. Because that hasn’t been settled for the current budget year, SSA is operating under a continuing resolution (CR) with less funding than last year. This is not new – the amount it has had to manage its responsibilities is 10 percent lower than it was in 2010, after adjusting for inflation. At the same time, the number of beneficiaries the agency serves has increased by 13 percent. SSA is serving more people with less funding.
During the past year, SSA began a hiring freeze that will reduce its staff to the lowest level since FY 2013. It uses a lot less overtime now, which affects its ability to reduce critical backlogs. For example, over a million people are waiting for a hearing to see if they are eligible for disability benefits.
Congress has until April 28, 2017, to pass a spending bill for the full year or pass another CR. While SSA can’t predict its budget level for the rest of the fiscal year, officials are bracing for more cuts.
“Starving the Social Security Administration of its funding will inevitably lead to cuts in services to seniors and the disabled,” said Richard Fiesta, Executive Director of the Alliance. “We must increase SSA’s resources so that it can hire more staff, address backlogs and mail paper statements to all those who need them.”