Hiring freeze and budget cuts impact Social Security claims

Despite longer waits and declining service, checks are safe — for now

By Mary Beth Franklin

Mar 30, 2017 @ 6:04 pm EST

Last week, 50 members of Congress sent a letter to President Donald J. Trump asking him to exempt the Social Security Administration from the federal hiring freeze "to ensure that the American people receive the first-class service they have already earned through a lifetime of hard work."

Don't hold your breath waiting for a reply.

To start, all 50 of the letter signers are House Democrats with little sway over Mr. Trump's public policy agenda. In addition, the president had his hands full trying to rally members of his own Republican party to vote to repeal the Affordable Care Act and replace it with a controversial health care plan of his own.

"Social Security is efficiently administered, spending less than a penny of every dollar on administration all while the American population is rapidly aging with 10,000 people, on average, turning 65 every day," the Democratic lawmakers noted in their letter to Mr. Trump.

The agency, already strapped for funds, has been struggling to keep up with the increased demand.

"Since 2010, the administrative budget of the SSA has declined by 10%, after adjusting for inflation, while the number of beneficiaries has increased by more than 12%," they wrote. "This had led to the closure of 64 field offices nationwide, a disability hearings backlog with an average of 545-day waiting period, increased wait times at every point of contact, and extended durations for retirement and disability appointments."

In the letter, the lawmakers also pointed out that the administration's hiring freeze announced in January "prevents SSA from replacing agency employees who are retiring at rates similar to that of the American workforce and will ultimately lead to a declination in the quality of programs that served over 60 million Americans in 2016."

Not exactly the "first class service" the American people deserve, is it? Perhaps SSA should hand out little bags of pretzels while people wait for an appointment to give them more of an authentic "coach" experience.

Despite these complaints, the Social Security Administration actually fared better than most domestic spending programs in the truncated budget proposal Mr. Trump submitted to Congress this month for fiscal year 2018 that begins Oct. 1, 2017.

The administration's initial budget blueprint calls for a $54 billion increase in defense spending in 2018 that is offset by targeted reductions in non-defense programs. Compared to the proposed 21% cuts in the budgets of both the Agriculture and Labor Departments and 31% reduction in that of the Environmental Protection Agency, the 0.2% proposed increase in the SSA's budget looks downright generous. But after accounting for inflation, the SSA spending target would effectively amount to a small decrease in the agency's budget next year.

The belt-tightening is not new. Budget cuts dating back to 2011 forced the agency to impose its own hiring freeze which led to a deterioration in phone service, according to a 2017 report by the Center for Budget and Policy Priorities, a nonpartisan research organization based in Washington, D.C.

"SSA's teleservice centers have 450 fewer agents than they need to handle the 37 million calls they received each year," the report said. "As a result, most callers to SSA's national 800 number don't get their questions resolved. The average wait for an agent is 18 minutes and nearly half of callers hang up before connecting. Another 13% of callers get busy signals."

Do yourself a favor and figure out how to get an estimate of your benefits by setting up a personal Social Security account and how to apply for retirement or spousal benefits online without ever stepping into a Social Security office or calling the toll-free number.

If you are not yet receiving Social Security, you can get an estimate of your future benefits. If you want to apply for retirement benefits or benefits as a spouse, you can do so online if you are within three months of your 62nd birthday or older. If you want to apply for benefits as a surviving spouse or surviving divorced spouse, you will need to visit a local Social Security office to supply the necessary paperwork such as a marriage license, death certificate or divorce decree. You may want to call 800-772-1213 in advance to make an appointment. Individuals who are within three months of their 65th birthday can also enroll in Medicare online.

Despite the service slowdown, Social Security benefits will continue to be paid — for now. But if Congress does not raise the federal debt ceiling, which is the maximum amount of debt that the Department of Treasury can issue to the public and other federal agencies, the government could run out of cash by this fall, according to the Congressional Budget Office. Although Social Security benefits are funded by payroll taxes, the U.S. Treasury owes the Social Security trust fund $2.8 trillion in I.O.U.s — money the trust fund needs to pay beneficiaries.

(Questions about new Social Security rules? Find the answers in my new ebook.)

Mary Beth Franklin is a certified financial planner.

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