In fiscal terms, there’s no earthly reason for Congress to be stingy with Social Security’s administrative budget. The money comes out of workers’ payroll taxes and the system’s other revenue, not from the general treasury. And it’s spent with painstaking care: The Social Security Administration is one of the government’s most efficient agencies, with a core administrative budget of 0.7% of benefits, devoted to upholding a decades-old reputation for superb customer service.
But Congress hasn’t gotten the memo. This week, the Senate Appropriations Committee cut the agency’s administrative budget request by nearly 5.5%, to $12.5 billion from the requested $13.1 billion. Social Security officials had warned that such cuts would inevitably translate into a reduction in customer service, but the committee wasn’t listening.
Our current state of service remains fragile ... as the demands of balancing service and stewardship responsibilities continue to strain our resources.
“We have endured funding constraints, sequestration, and a Government shutdown at the beginning of this decade,” Acting Commissioner Carolyn Colvin observed in her annual budget message. Although budget conditions improved during fiscal 2014 and 2015, that wasn’t enough to really bring operations fully up to demand.
“Our current state of service remains fragile … as the demands of balancing service and stewardship responsibilities continue to strain our resources.” Only the full budget request would “keep us on the right path.”
Congress’ budgetary cheeseparing has taken its toll, as Kathleen Romig of the Center on Budget and Policy Priorities observed last week. Since 2010, the number of Social Security beneficiaries – pumped up by baby-boomer retirements – has soared by 12% to about 60 million, while the agency’s core operating budget has fallen by 10%, adjusted for inflation.
Among the manifestations of administrative difficulties documented by Romig and other sources such as the Senate Committee on Aging are these: Nearly 10% of callers to Social Security’s 800 number get busy signals, and for those who get through, the average time on hold is 15 minutes; 64 field offices out of a network that once numbered 1,352 and 533 of its 734 mobile offices have been shuttered since 2010, and reduced hours afflict those still open. “Before the budget cuts,” Romig writes, “more than 90% of applicants could schedule an appointment within three weeks; by 2015, fewer than half could.”
The agency says that many services once delivered face to face can now be handled by phone or online, but that’s a valiant attempt to make the most of a bad situation. Social Security serves a largely elderly clientele, many of whom can’t hear well enough to do business exclusively on the phone, aren’t able or comfortable going online, and may need face-to-face help navigating the often complex rules of claiming benefits claiming or solving claims problems.
The system already is falling behind on such administrative tasks as “awarding widows’ benefits when their spouses die and adjusting benefits for early retirees and disabled workers with earnings,” Romig reports. The average time to complete these formalities has reached four months.
Other aspects of what was once Social Security’s peerless outreach to its clients have fallen by the wayside. In 2012, the program stopped mailing out personalized annual statements to every covered worker, showing how much they had contributed toward their benefits and how much they and their family could expect upon retirement or disability. The mailings were the essence of good customer service, and relatively cheap – they cost $70 million a year, or about one-half of 1% of the agency’s budget.
As I observed then, there couldn’t have been a worse time for this informational vacuum to occur. Social Security was laboring under unprecedented political attack, and the public’s understanding of how it works and what it provides had reached a low ebb — not least because of unchallenged misinformation wholesaled by its enemies and would-be “reformers.” The mailings were later restored on a reduced schedule; they now go out in advance of workers’ birthdays every five years, from age 25 through 60, but the notion that Social Security is there for you was dealt a near-lethal blow.
No, not really. Much of the increase has been in the “program integrity” budget, which pays for investigations of eligibility and the ferreting out of fraud. These efforts shouldn’t be shortchanged and sometimes they pay for themselves, but they don’t pay for improvements in customer service. Leaving this category aside, Romig points out, and the core Social Security administrative budget this year is $10.5 billion -- almost exactly what it was in 2010.
“Nearly every American comes to SSA at some point,” Romig observes, “and they do so 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. Throughout most of its history, SSA has had a reputation, both within and outside the agency, for administrative excellence. … Failing to invest in customer service is penny-wise and pound-foolish.”