STATEMENT BY
MAX RICHTMAN
PRESIDENT AND CEO
NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE
TO THE COMMITTEE ON FINANCE
UNITED STATES SENATE
HEARING ON
THE PRESIDENT’S FISCAL YEAR 2025
SOCIAL SECURITY ADMINISTRATION BUDGET
MARCH 20, 2024
On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am pleased to submit this testimony for the record in support of robust funding for the Social Security Administration in Fiscal Year 2025. Members of the National Committee come from all walks of life and every political persuasion. What unites them is their passion for protecting and strengthening Social Security, Medicare, Medicaid, and the other programs that are so vitally important to older Americans.
The fiscal year (FY) 2025 budget recommendations submitted by President Biden to Congress on March 11, 2024, affirm his commitment to America’s seniors in major ways. The budget provides funding to improve customer service for Social Security beneficiaries as the Social Security Administration (SSA) continues to grapple with service delivery challenges. And the President supports legislation that extends the solvency of the Medicare Part A Hospital Insurance trust fund, broadens the number of prescription drugs subject to price negotiation and expands Medicaid home and community-based services (HCBS). With 10,000 baby boomers turning 65 every day – and the number of seniors projected to double by 2050 – it’s clear that this budget is mindful of the need to safeguard our older Americans now and into the future.
Social Security represents the foundation of income security for the American people. Without a solid foundation, other programs designed to protect workers and their families from the ravages of death, disability and old age simply will not be able to adequately fulfill their missions. The activities of the Social Security Administration (SSA) are at the heart of the administration of the Social Security program. Adequate funding for SSA is vitally important to millions of Americans across the country who either are receiving Social Security or expect to do so in the future, both to ensure that they receive the benefits they have earned and to maintain the public’s support for this essential program.
Unlike most other agencies, the Social Security Administration’s operations are not funded by general tax revenues but through Social Security’s Trust Funds. As a result, although the money used to fund the Agency is technically “on budget” for budget scoring purposes, SSA’s operations are actually paid for by American workers and their employers when they make their payroll tax contributions. Rather than appropriating funds from the general Treasury, Congress limits the amount the Agency can spend annually from the Trust Funds through the appropriations process. The long history of Agency underfunding is therefore especially frustrating when one considers that contributions from American workers have built up an almost $2.8 trillion surplus in the Trust Fund accounts, in addition to over $1 trillion received in Federal Insurance Contributions Act (FICA) contributions each year.
In 2025, SSA anticipates delivering about $1.6 trillion in direct payments to beneficiaries, at a remarkably low administrative cost of about 1 percent. The President proposes $15.402 billion for SSA’s FY 2025 appropriation for administrative expenses. This is an increase of $1.3 billion — 9 percent – over the level enacted for the 2023 Fiscal Year.
At the time this testimony was written, Congress had not enacted a permanent appropriations’ bill for SSA for FY 2024. During Congressional consideration of the FY 2024 Continuing Resolution, the Administration requested a $727 million anomaly for FY 2024, which would have brought SSA to an annualized funding level of $14.854 billion. The anomaly level of funding would have helped prevent further service deterioration by maintaining staffing levels, increasing processing capacity through overtime, and funding critical information technology enhancements.
Unfortunately, this anomaly request was not provided by Congress. As a result, since October 1, 2023, SSA has been operating on essentially flat funding, which if made permanent, would have a severely detrimental effect on service and would halt the progress SSA made to begin improving service in FY 2023. Level funding has not covered the over $600 million increase in SSA’s annual fixed costs such as salaries and rent on more than 1,500 field and hearings offices across the country. SSA was forced to freeze hiring during the extended Continuing Resolution, which has caused the agency’s staffing levels to fall back to where they were in April 2023. SSA also significantly reduced overtime levels in FY 2024 compared to FY 2023, limiting one of the agency’s most important tools for increasing processing capacity and supporting offices.
If SSA is forced to continue the hiring freeze and overtime limits throughout FY 2024, the agency anticipates it will lose over 4,500 full-time permanent staff this fiscal year, resulting in SSA’s lowest staffing since 1972 (55,000 staff), including about 750 fewer employees in National 800 Number call centers and about 2,100 fewer employees in field offices across the country. This loss of staff will negatively impact call wait times, disability timelines, and other key performance metrics and be felt by the people SSA serves.
SSA has approximately 500 million interactions with the public each year through field office visits, call centers, and other engagements. While they have exceptional employees dedicated to serving millions of people, SSA is serving 50 percent more customers with less staff than they had in 1995. Since FY 2010, Social Security’s customer service budget has declined in inflation-adjusted terms by 17 percent and its staffing by 16 percent, while at the same time the number of SSA’s beneficiaries has grown by 22 percent.
The long history of disinvestment in the Agency’s core public services must be reversed if the American public is to receive the services they have already paid for through their monthly payroll contributions. The solution to this growing problem is for Congress to embark on a multi-year effort to restore adequate funding levels for SSA’s operating budget, beginning with, at a minimum, providing the full level of funding requested by the President for FY 2025. If the President’s budget request is approved by Congress, SSA intends to continue ongoing efforts to re-build its workforce, thus allowing SSA to process increasing numbers of disability claims, reduce wait times on the national toll-free number and begin to address the pending backlogs. This funding request represents a solid first step toward what will need to be a multi-year effort to rebuild the agency’s ability to provide the customer service America’s workers and retirees deserve and expect.
We support the Administration’s proposal to provide additional funding to improve the level of service provided by SSA’s toll-free telephone service which has suffered a decline in service delivery due to misguided underfunding. Perversely, over the years SSA’s national toll-free telephone service staff has declined substantially, even as call volume grew. The results, predictably, were more busy signals, more hang-ups, longer wait times and fewer calls handled. The President’s budget provides additional resources that should enable SSA to significantly improve its telephone service, with a projected reduction in wait times on SSA’s 800 Number by over 20 minutes to 12 minutes. We thank the Administration for proposing to strengthen the adequacy of this vital service which must be available as a critical lifeline for those who have difficulty visiting a field office in person due to age or disability.
Providing adequate funding is also essential to resume the process of eliminating the backlogs that have developed in both the Disability Determination Services and the Offices of Hearings Operations and is clearly necessary to expedite the processing of the current backlog. Relative to level staffing, a hiring freeze and loss of 4,500 staff in 2024 would add an estimated 20 more days and 175,000 more cases in the disability backlog. The President’s FY 2025 Budget request is projected to reduce initial disability claims wait times to an average of 215 days, and reduce the claims backlog by 15 percent.
While the National Committee applauds the Administration’s budget proposal, we feel compelled to point out the request is well below the $16.45 billion request submitted by the SSA to the Office of Management and Budget. We firmly believe the agency itself is better positioned to anticipate the funding it will need to provide the level of service the American people deserve from SSA than the Office of Management and Budget. We therefore hope Congress will provide the full requested level of $16.45 billion when formulating its own appropriations legislation for FY 2025. This is especially true considering the seriously insufficient funding we anticipate the agency will receive for FY 2024. Fully funding the Agency’s original request will represent a major step toward restoring SSA’s ability to fulfill its mission.
Lastly, we applaud the President’s commitment to improve and strengthen Social Security, and his support for raising the payroll tax cap for those earning over $400,000 annually. The President has made clear his commitment to ensuring the wealthy pay their fair share throughout his FY 2025 budget and we hope Congress will support his efforts. However, we note the absence of any specific Social Security legislative proposals in the President’s FY 2025 budget. To address this omission, we urge the Congress to consider the Social Security 2100 Act, introduced as H.R. 4583 in the House by Representative John Larson (D-CT) and in the Senate as S. 2280 by Senator Richard Blumenthal (D-CT), and the Social Security Expansion Act, S. 393 (H.R. 1046 in the House), legislation developed by Senator Bernie Sanders (I-VT) and Representative Jan Schakowsky (D-IL). These bills make important, long overdue improvements to the Social Security program, as well as strengthening the program’s finances. We look forward to working with the Administration in enacting this important legislation.
Social Security, a critical lifeline for millions of Americans, must not be allowed to wither on the vine. Congress must provide adequate funding for this foundation of support for workers and their families. Accordingly, we strongly urge Congress to provide, at minimum, the President’s budget request of $15.402 billion for FY 2025.