Social Security is much beloved by Americans — that's why it's often called the "third rail of American politics" — but its enemies on Capitol Hill never rest in trying to make it less beloved. We're not talking about the level of benefits, which has resisted conservatives' determined slash-and-burn campaigns (so far), but the level of its public outreach, which has suffered grievously in recent years.
One key service now looks to be ready for hospice care, according to an announcement Monday by the Social Security Administration: the annual mailing of Social Security statements to the millions of Americans who make payroll contributions to the system. These paper statements have been required by federal law since 1989, thanks to a bill by the late Sen. Daniel P. Moynihan (D-N.Y.). That hasn't stopped Social Security from putting their existence on a roller coaster — cutting them back, then restoring them somewhat.
This is a ridiculously shortsighted policy that feeds the goals of political leaders most hostile to the program. Social Security has traditionally been known for its ability to communicate with workers and retirees; ending the mailings will silence the program's outreach to clients most in need of it.
We raised these very points in 2012, the first time the agency cut back on the mailings. The points we raised then are still germane today. So is the budgetary context: Social Security's administrative budget has been systematically hollowed out by congressional action for years. The agency, as Walker observed in a blog post, is making do with a budget "10% lower than it was in 2010, after adjusting for inflation." Meanwhile, the number of beneficiaries on the rolls has risen 13%, to 60 million retirees and their dependents; survivors of deceased workers; and disabled workers and their dependents.
The agency instituted a hiring freeze last year that will reduce staff to its lowest level since 2013 and also cut back on overtime. "So, we have fewer resources to serve more people," Walker writes.
Mindful that its administrative costs come out of worker contributions, the agency has always been careful about spending. Its administrative budget has typically come to about 0.9% of its overall spending. Congressional budget legislation, however, has slashed that to about 0.7%. (The agency spent $6.3 billion on administrative expenses in 2015, out of total spending of $897.1 billion.) It's proper to ask whether the Social Security Administration has been too docile about letting this happen without raising a public stink.
The consequences of the cutbacks are plain to anyone who seeks help, guidance, or answers from Social Security staff. The Center on Budget and Policy Priorities observed in June that the cuts had hampered the agency's ability to perform services "such as determining eligibility in a timely manner for retirement, survivor, and disability benefits, paying benefits accurately and on time, responding to questions from the public, and updating benefits promptly when circumstances change."
Average wait times on the agency's 800 number and the percentage of calls getting a busy signal both rose through 2014, when a slight budget increase allowed staff to expand. Since then, however, both measures have been back on the rise.
Meanwhile, the number of field and mobile offices, their hours and their staffing have been cut back, sharply reducing their availability for face-to-face consultations with members of the public, who often have needs that can't adequately be handled over the phone. Most applicants now must wait more than three weeks for an appointment, and many have to travel long distances to reach an office. Because of a hearing backlog, roughly 1.1 million disability applicants were still awaiting rulings on their eligibility at the end of 2016.
Sadly, that wasn't the first time the Center on Budget and Policy Priorities or other Social Security advocates had to raise the alarm — and it won't be the last. All these steps eat away at public confidence in the Social Security system, which may well be the goal of the budget cutters on Capitol Hill — it just softens the system up for the kill.
But the decision to end the mailing of paper statements to most workers may be the most harmful budget saving initiative of all.
That's because the annual statements were the only proactive outreach the agency made to its clientele. The statements, as one might remember from the period when they arrived in the mailbox once a year, listed estimated retirement benefits already earned, as well as potential disability and survivor benefits. It was a real-time readout of how Social Security would protect workers and their families in the event of retirement, disability or untimely death.
The idea, I was told in 2012 by Webster Phillips, a former associate Social Security commissioner who worked with Moynihan to craft the mandate, was to strengthen the bond between workers and the Social Security program by showing that the money they paid in, week in and week out, would yield tangible benefits. If Congress tried to take them away or cut them down, the consequences would show up in every worker's mailbox.
The statements also displayed the worker's earnings record year by year. This allowed recipients to pinpoint errors — the statements provided an 800 number and instructed recipients to "Call us right away" to report inaccuracies.
Can these features be replicated by the MySocialSecurity online account? Obviously not. Leaving aside that many people are still uncomfortable about opening online accounts or are unable to do so, or don't have Internet access, the best feature of the paper statements is that they came unbidden. No one had to go hunting for the website. No one had to manage a password (or change it every six months, as the system requires). This was a case of government reaching out to let citizens know how it was working for them. This is not a light that should be hidden under a bushel.
The Social Security Administration says it will save $11.3 million a year by cutting out most of the mailings. That comes to about two-tenths of 1% of its administrative budget, and a bit more than one-thousandth of 1% of its total spending. But it's giving up much more in public access.
Rather than make clear the drawbacks of this step, the agency is wringing its hands as though it's inevitable. "We know that our cutbacks will affect many of you, but we have no choice," Walker wrote in a blog post announcing the cut in mailed statements. Instead of pointing the finger at shortsighted congressional action, he added simply that congressional cheeseparing means "there may be more bumps in our journey together. We'll do our best to get through them."
That's not good enough. The Social Security Administration represents the public in this sort of battle, and it shouldn't be rolling over. The annual statements were mandated by Congress nearly 30 years ago, and they're still needed. Social Security and its advocates should be fighting for them, and for all the other services that bind the system to its beneficiaries, tooth and nail.