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Social Security Offices Close, Staff Furloughed and Waits Increase if SSA Budget is Cut by Congress Yet Again

As the baby boom generation ages and a record number of Americans retire, it’s hard to imagine why Congress has chosen this time in history to continue slashing the administrative budget for the Social Security Administration. It’s a glaring example of Washington’s penny-wise and pound-foolish budget approach and its real-world impacts on the lives of millions of average Americans.  It’s especially hard to understand given that the Social Security Administration isn’t funded by general revenues. As we’ve reported before, American workers’ contributions through the payroll tax support Social Security:

“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.” ...Michael Hiltzik, Los Angeles Times columnist

Today, the Washington Post reports on what the latest round of cuts proposed by Republicans in the House and Senate would mean for the Social Security Administration:

 “There would be up to two weeks of furloughs for all employees,” the agency said in information obtained by The Washington Post. “During this time, our offices would be closed to the public.  Additionally, a full hiring freeze would cause service degradation and long wait times and delays.  As a result, many Americans may wait longer to receive the benefits they have been planning to use during their retirement, and the most vulnerable of our citizens will have to wait even longer for disability claims decisions, causing more hardship and frustration for millions of families. 

It’s not like Social Security is operating in the flush now. Since 2010, its operating budget has shrunk 10 percent after inflation while the number of beneficiaries rose by 12 percent. President Obama has proposed an $11.1 billion administrative budget for fiscal year 2017, $522 million more than this year. House Republicans have proposed $772 million less than the president’s budget, according to SSA figures, while Senate Republicans would reduce agency spending by $582 million. The administrative budget is separate from the trust fund that pays benefits to recipients.”

Unfortunately, this effort is nothing new. “Starve the beast” and shrinking government “down to the size where we can drown it in the bathtub" are long-held goals for Congressional conservatives.  Today’s budget cutters are continuing that decades-long campaign to diminish successful government programs which, since the vast majority of the American public of both parties supports them, can’t be killed outright.

“Cutting staff when SSA is processing historically high claims is irresponsible and a sign that the Republicans who voted for this cut are not interested in providing tax payers with good service regarding SSA,” said Witold Skwierczynski, president of the American Federation of Government Employees SSA Council. “Instead they appear to be creating a scenario that insures the collapse of the program and will enhance the push to privatize it.  If the public loses trust and faith that the federal government can administer SSA, they will look to privatization proposals as an alternative.”...Washington Post, August 9, 2016 

It’s August recess for Congressional Members which means they’re in their districts attending town halls, meeting constituents and in many cases running for re-election. Now's the time to ask:  Do you support Congressional budget plans to cut Social Security’s administrative funding? 

Will America's Seniors Vote Against Their Own Self-Interests...Again?

Max Richtman, NCPSSM President/CEOby Max Richtman, NCPSSM President/CEO

As a seniors’ advocate who’s worked on aging policy issues for decades, one of the most common questions I hear during campaign season is, “Why do America’s seniors vote against their own economic self-interests?” or more specifically, “Why have so many older (65+) Americans shifted to the Republican Party, even as it supports cutting the Social Security and Medicare benefits they depend on?” There is no single answer to this political quandary because there is far more at work in our fractured, divisive and polarized political system than simply age demographics. However, there’s no denying we could see American seniors vote against their own self-interests, once again in 2016, unless there’s a major awakening to what that vote means for them economically.

It’s important to start with some historical context. Democratic Presidents, Franklin D. Roosevelt and Lyndon B. Johnson, created Social Security and Medicare and -- for decades -- the party’s strong support among seniors and the middle-class reflected that reality. However, that was then. The erosion of senior support for Democratic candidates has been steady.  In 1993, Democrats had a 12 point advantage over Republicans among senior voters.  Today, that advantage is gone and is instead a deficit.

While the GOP claims this shift proves cutting earned benefits is no longer the “third rail” of American politics, the increasingly populist tone of this 2016 Presidential campaign combined with the nomination of a GOP Presidential candidate who’s promised no cuts certainly belies that assertion. In truth what’s happened in recent years is that conservatives have successfully co-opted the Social Security and Medicare political debate by promising Americans they’ll “preserve” and “strengthen” these vital programs on the campaign trail, while actually proposing benefit cuts, Social Security private accounts, or coupon care for seniors in Medicare only after they’re elected. This Orwellian doublespeak isn’t accidental but a well-crafted (and apparently effective) messaging strategy. Donald Trump has now taken that messaging a step further by promising he’ll leave Social Security and Medicare alone, even as he surrounds himself with staff and a Vice Presidential running mate with very different plans. Trump himself supported the privatization of Social Security for more than a decade, calling it a “Ponzi scheme,” but by 2013 he’d done the political calculus and warned conservatives they simply couldn’t win elections that way:

“ ‘As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen,’ Mr. Trump said, adding that polls show that tea partyers are among those who don't want their entitlements changed."  Donald Trump, 2013 CPAC speech, Washington Times

You know the Republicans also have to get elected, you do know that. And if you watch Bernie, and if you watch Hillary, they don't only want to not cut, they want to increase Social Security.” Donald Trump, Morning Joe, February 2016

The American people, of all ages and political parties understand we don’t have to destroy Social Security and Medicare to “save” them. The latest survey by the National Academy of Social Insurance shows large majorities of Americans, both Republicans and Democrats, agree on ways to strengthen Social Security, without cutting benefits. 74 percent of Republicans and 88 percent of Democrats agree that “it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.”  Simply put, the American people are willing to pay more for Social Security.  They understand the growing impact these benefits have on individual lives and on our larger economy.  They know first-hand what America’s retirement crisis looks and feels like.

Retirement USA reports the gap between what Americans need to retire and what they actually have is $7.7 trillion. In fact, about half of households age 55 and older have no retirement savings and a third of current workers aged 55 to 64 are likely to be poor or near-poor in retirement. Unfortunately, the median retirement account balance is a puny $3,000 for all working-age households and $12,000 for near-retirement households. Vanguard reports that 401K balances, for those who do have them, fell a median of 11% last year.  Social Security remains the only stable retirement income for many Americans.

Social Security is also a stabilizing force for the economy.  A new report from the National Committee to Preserve Social Security and Medicare Foundation shows that, in 2014 alone, Social Security delivered a $1.6 trillion fiscal boost nationwide as benefits were spent and cycled through the economy.  Unfortunately, Social Security’s economic contributions to communities, counties, and states continue to be misunderstood and often ignored in Washington’s fiscal debates. This election could change that.

The party that created Social Security and Medicare has an opportunity to regain lost ground by drawing a clear line in the sand in defense of the core American values of hard work, fairness and compassion embodied in our nation’s most successful programs – Social Security and Medicare. The Democrat’s 2016 platform is the strongest statement on strengthening Social Security seen in decades.  By pledging to fight efforts to “cut, privatize or weaken” Social Security, supporting expansion of the program, lifting the payroll tax and exploring a new COLA formula for seniors, the Democrats have tackled head-on the critical challenges facing millions of average Americans. Conversely, the Republican 2016 platform says benefit cuts must be considered, raising revenue rejected and privatization (the “power of the markets”) preferred. It’s no wonder Donald Trump has been running noticeably silent on Social Security and Medicare this summer, given the Republican Party’s clear rejection of his Social Security and Medicare campaign promises.

Senior turnout will play a huge role in November’s elections which means Democrats must continue to say what they mean, and mean what they say in a full-throated defense against attacks to America’s most effective health and retirement security programs.  Senior voters must also remain vigilant and demand more from candidates than empty promises and political double-speak, otherwise they may cast yet another vote against their own economic self-interests and end up with the biggest case of buyers’ remorse in American political history. 

New Federal Privacy Rules Pose a Challenge for Some Seniors in Social Security

All new and current account holders to Social Security’s online portal,  my Social Security, will now be required to have a text-enabled cell phone to access their account online. The Social Security Administration says:

“People will not be able to access their personal my Social Security account if they do not have a cell phone or do not wish to provide the cell phone number. We understand the inconvenience the text message solution may cause for some of our customers. We recognize that not every my Social Security account holder may have a cell phone, have consistent cell service in a rural area, or be able to receive a text message.”

In fact, a Pew Research Center report shows a small minority of adults ages 65 and older own smartphones.

“Overall, older Americans are less likely to be online, have broadband at home or own a mobile device. The same applies to smartphones: Only a quarter (27%) of adults ages 65 and older own them.”

Leading many to wonder:

“Certainly, cybersecurity is important and more so for Social Security numbers that can be used for identity theft. But there MUST be a better way than locking out the majority of people the agency exists to serve.”...Time Goes By blog

This change was prompted by a new executive order requiring all federal agencies that provide online access to consumers’ personal information to use something called multi-factor authentication; this means that to login to a site, account holders need to enter more than one credential — in this case a username/password and a text code — in order to verify their identity. The new system has already encountered snags. Verizon customers complained that they could not get the cellphone security code. The SSA now says it has fixed the problem; however,

“Due to high volume of traffic to our website, you may experience problems receiving your security code via text message or entering the security code you receive. The problem preventing all Verizon wireless customers from receiving the cell phone security code has been fixed. Please check back in a few days.”

SSA’s use of technology to reach a growing number of retirees, particularly baby boomers who have been increasing their online/cell usage, makes sense.  However, the agency’s backup for those beneficiaries who can’t access their online accounts without a cell phone are its call centers, which Congress continues to underfund:

“When the teleservice centers are adequately funded and staffed, SSA’s 800 number performs well.  However, starting in 2011, budget cuts forced SSA to freeze hiring, and the teleservice centers lost many agents through attrition.  In just three years, SSA lost more than 15 percent of its 800 number staff. Wait times and busy rates spiked. In 2014, wait times peaked at over 22 minutes and busy rates at 13 percent.  After a small funding increase in 2014 enabled SSA to replace some of the agents lost during the hiring freeze, service began to rebound — though it remains well below previous levels.”...Center on Budget and Policy Priorities

Surely, there must be a better way to improve security and provide convenient access to online Social Security accounts without shifting so many seniors without cell phones back to currently underfunded teleservice centers and district offices which Congress, so far, seems unwilling to fund at levels needed to serve the retiring baby boom generation. 

New Online Resource Details Social Security’s Economic Impact in States and Counties Nationwide

Social Security’s economic contributions to communities, counties, and states continue to be misunderstood and often ignored in Washington’s fiscal debates. A new online report unveiled by the National Committee to Preserve Social Security and Medicare Foundation provides a detailed look at the significant economic impact generated by Social Security benefits. Social Security Spotlight delivers data on beneficiaries by state, county, Congressional district, race/ethnicity, age and gender. Also available are the Economic Stimulus Impact for each state, and the Regional Support Index (RSI) which illustrates the level of support that Social Security provides to all residents of a given state or county. This comprehensive data details what America’s retirees, people with disabilities, survivors and their families know first-hand -- Social Security plays a vital economic role for families, communities and businesses throughout America. 

In 2014 alone, Social Security delivered a $1.6 trillion fiscal boost nationwide as benefits were spent and cycled through the economy. The report’s impact estimates are adjusted for taxes and the composition of state economies, which affect how benefits are multiplied and generate additional economic activity. For example in 2014, California residents received $80.4 billion in benefits, which added $165.9 billion to the state economy. At the other extreme, District of Columbia residents received $1.1 billion in benefits, which generated $1.6 billion in economic activity. The Regional Support Index (RSI), shows that between 2008 and 2013, Social Security also played a growing economic role in the vast majority (nearly 94%) of counties’ throughout the nation. In fact, 34 states showed a high/medium RSI ranking, demonstrating how important Social Security’s stimulus and stabilization effects are to states large or small, and rural and urban residents. 

Social Security Spotlight can be especially helpful during the 2016 election cycle for voters, journalists, policy makers and campaign staff as the future of Social Security is debated. There have been numerous policy proposals that could diminish the earned benefits in Social Security triggering financial losses not only for American workers, retirees, the disabled, and their families but also their communities, counties and states. Every Congressional and Presidential candidate will be encouraged to take a hard look at the economic impact numbers.  Voters should also ask candidates and incumbents, “Can our community afford the economic hit which would come by cutting benefits?”

Here’s a look at some of the information available for each state.  This example highlights Florida:

Total # Social Security beneficiaries:   4.2 million residents receive $62 billion in benefits. Sumter County receives the highest per capita Social Security income, Lafayette with the lowest.
Economic Impact Dollars:   $122.5 billion
Regional Support Index:   In 26 Florida Counties, 25% or more of the population receives Social Security.

In 32 Florida Counties, Social Security is 10% or more of their citizens’ income. 

Since 2008, Social Security’s economic impact has increased in every Florida County.

Demographics:     4.2 million Florida beneficiaries 75.5% White, 13.2% Hispanic, 1.4% Asian, 8.9% African American, 6.1% children           

The Social Security Spotlight project was funded by a grant from the Retirement Research Foundation. The project has been guided by the Task Force on the Future of America’s Health and Retirement Security.  Research was conducted by: Peter S. Arno, PhD, Senior Fellow and Director of Health Policy Research at the Political Economy Research Institute at the University of Massachusetts-Amherst National Committee to Preserve Social Security & Medicare Foundation board member, and Andrew R. Maroko, PhD, Assistant Professor, City University of New York Graduate School of Public Health and Health Policy.

Two Party Platforms –Two Starkly Different Views on Social Security

The Democratic Platform released today clearly shows that the differences between how the Democratic and Republican parties will approach the future of Social Security couldn’t be starker. The GOP platform promises to consider all benefit cut options, refuses to lift the payroll tax cap and suggests sending Americans’ earned benefits to Wall Street through privatization. The Democratic Party platform, on the other hand, offers the strongest statement on strengthening Social Security seen in decades.  By pledging to fight efforts to “cut, privatize or weaken” Social Security, supporting expansion of the program, lifting the payroll tax and exploring a new COLA formula for seniors, the Democrats have tackled head-on the critical challenges facing millions of average Americans. 

“For too long, many in Washington have ignored the retirement crisis facing Americans nationwide.  The Democratic Party’s platform acknowledges what average Americans and their families understand first-hand – Social Security is an economic lifeline to millions which should be improved. Boosting Social Security’s benefits to provide economic security while also extending the program’s solvency can be done at the same time.  The Democrats get that.

The National Committee proudly worked closely with the Democratic Platform Committee and DNC Chair Rep. Debbie Wasserman Schultz to ensure efforts to improve the current cost of living allowance (COLA) formula are investigated.  The current formula isn’t measuring seniors’ expenses properly and they’ve seen no increase for too many years, while their expenses (especially health costs) continue to grow.  We need a COLA for the elderly and are happy to see Democrats address that reality in this 2016 platform.”...Max Richtman, NCPSSM President/CEO and Democratic Platform Committee Member

It’s also very telling that while the GOP buried their cuts and privatization plans for Social Security under the Platform’s Government Reform heading, the Democrats addressed Social Security, as they should, as part of their plan to restore economic security for average Americans. That’s been Social Security’s fundamental role for more than 80 years -- providing an economic lifeline impacting the lives of virtually every American family.

A new National Committee to Preserve Social Security and Medicare Foundation report also released today, called Social Security Spotlight, illustrates very clearly the huge economic impact Social Security benefits have in every state and county throughout the nation.  This research can be especially helpful during the 2016 election cycle for voters, journalists, policy makers and campaign staff as the future of Social Security is debated.





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