The fiscal year (FY) 2024 budget recommendations submitted by President Biden to Congress on March 9, 2023, 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. And 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 families 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 the source of funding for SSA’s operations comes from the Social Security Trust Funds themselves, not general revenue – and that contributions from American workers have built up an almost $2.852 trillion surplus in these accounts, in addition to about $1 trillion received in Federal Insurance Contributions Act (FICA) contributions each year.
By 2024, SSA anticipates delivering about $1.5 trillion in direct payments to beneficiaries, at a remarkably low administrative cost of about 1 percent. The President proposes $15.5 billion for SSA’s FY 2024 appropriation for administrative expenses. This is an increase of $1.4 billion — 10 percent – over the level enacted for the current 2023 Fiscal Year and is a badly needed increase to address years of underfunding. It represents a first step in stabilizing SSA’s continued customer service deterioration, which since FY 2010 has seen Social Security’s customer service budget decline 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.
SSA ended FY 2022 with the lowest staffing level in over 25 years due to this long history of disinvestment in the Agency’s core public services. 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.
The National Committee applauds the Administration’s budget proposal as a solid first step toward rebuilding the agency’s ability to provide adequate services to the American people, though we feel compelled to point out the request is well below the $16.5 billion request submitted by Acting Commissioner Dr. Kilolo Kijakazi 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 $16.5 billion when formulating its own appropriations legislation for FY 2024.
Providing adequate funding is essential to begin the process of eliminating the backlogs that have developed during the pandemic in both the Disability Determination Services and the Offices of Hearings Operations and is clearly necessary to expedite the processing of the current backlog. The agency’s funding request is intended to address the significant pent-up demand for disability claims filing that developed during the COVID pandemic by accelerating its efforts to recruit and train new employees. The agency plans to focus first on resolving the oldest and most challenging disability cases and subsequently reduce the disability backlogs to pre-pandemic levels. The agency’s request reflects the additional funding it expects will be needed to deal with these problems.
We support the Administration’s proposal to provide additional funding to improve the level of service provided by SSA’s toll-free telephone service. Here too, misguided underfunding has led to a decline in service delivery. 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, and 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.
President Biden’s budget proposal funds the production and mailing of only 15 million hard-copy Social Security statements. This proposal is part of SSA’s overall plan to limit the distribution of statements only to individuals who are 60 or older who do not have an online account rather than sending them to all workers every year. The National Committee urges the Administration to develop plans to send these important financial planning documents to all workers 25 and older, as is required in section 1143 of the Social Security Act. We urge appropriators to include an earmark within SSA’s administrative budget requiring that section 1143 of the Social Security Act be fully funded.
While the President’s budget includes no proposals that directly affect Social Security cost-of-living adjustments (COLAs), we are concerned that the appearance of inflation in the national economy raises the specter that the inadequacies of the consumer price index (CPI) used to adjust Social Security benefits for inflation will continue to undercut the purchasing power of seniors’ benefits. All of America’s seniors deserve the full protection that COLAs provide against the ravages of inflation. That’s why the National Committee continues to advocate for the adoption of a CPI that more accurately gauges the effects of inflation on seniors’ purchasing patterns. We believe that the CPI for the Elderly, or the CPI-E, which more accurately measures the effects of inflation on seniors’ purchasing patterns, should be adopted as the official measure of inflation for Social Security and other income security programs.
Lastly, we note the absence of any Social Security legislative proposals in the President’s FY 2024 budget. To address this omission, we urge the Administration to support S. 393 (H.R. 1046 in the House), legislation developed by Senator Bernie Sanders (I-VT) and Representative Jan Schakowsky (D-IL), and the expected reintroduction of Social Security 2100: A Sacred Trust legislation by Representative John Larson (D-CT) and Senator Richard Blumenthal (D-CT). 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 moving this important legislation.
The National Committee supports Medicare legislative proposals in the President’s budget that would:
- Increase the Medicare tax rate on earned and unearned income above $400,000 from 3.8 percent to 5 percent, in keeping with his pledge not to raise taxes on anyone earning less than $400,000 per year.
- Close a tax loophole exploited by high-income business owners to avoid paying the Medicare net investment income tax so that everyone earning over $400,000 per year would have to pay those taxes.
- Directs revenue from the Medicare net investment income tax to the Medicare Part A Hospital Insurance (HI) Trust Fund.
- Require that savings from additional prescription drug price reforms (see below), amounting to $200 billion over 10 years, would be credited to the HI Trust Fund.
In taking these steps, the Administration would extend the life of the Medicare HI fund by an estimated 25 years.
The Administration is also proposing to further strengthen its newly established negotiation power provided by the Inflation Reduction Act by negotiating more drugs and bringing medications into negotiation sooner after they launch.
In addition, the budget proposes to limit Medicare Part D beneficiary cost-sharing for high-value generic drugs — such as those used to treat chronic diseases like hypertension and high cholesterol — to no more than $2.
Further, the budget proposes to lower Medicare beneficiary costs for mental health services and parity in coverage between behavioral health and medical benefits. And for Medicare and Medicaid beneficiaries living in nursing homes, the National Committee strongly supports the Administration’s call to substantially improve the safety and quality of care, which were spelled out in detail in Executive Orders issued by the White House in February 2022.
The National Committee continues to support Biden Administration proposals that would invest $150 billion over 10 years to improve and expand Medicaid home and community-based services (HCBS), which would provide states and HCBS providers with the financial resources they need to expand and improve the quality of careers focusing on direct care and other key infrastructure – such as accessible adapted transportation systems for those who do not drive; additional sources of support for family caregivers to obtain respite care; a more diverse array of employment opportunities for individuals living with disabilities; and innovative health care technology.
NCPSSM also encourages the Administration to embrace the HCBS Access Act (S. 100), introduced by Senator Bob Casey (D-PA). This thoughtful policy would take practical steps to ensure that older Americans and individuals living with disabilities have a real choice of getting HCBS with practical, actionable steps, including improving the stability, availability, and quality of direct care providers to help address the decades-long workforce shortage crisis through providing states with greater resources, and providing better training and support for family caregivers.
In another forward-looking provision, the Administration is proposing to ensure that Medicaid and the Children’s Health Insurance Program (CHIP) are prudent purchasers of prescription drugs, including a proposal that would authorize HHS to negotiate supplemental drug rebates on behalf of interested States in order to pool purchasing power.
In addition, the President’s budget provides funding for doubling the capacity of community health centers— which provide comprehensive services regardless of ability to pay, which serve many who are lower-income as well as residents living in rural areas where health care providers are scarce. The budget also expands the National Health Service Corps, which provides loan repayment and scholarships to health care professionals in exchange for practicing in underserved areas, and the Teaching Health Center Graduate Medical Education Program, which trains residents in community-based health care clinics in rural and high need areas. It also proposes to better support rural health by proposing Medicaid-like coverage to individuals in States that have not adopted Medicaid expansion under the Affordable Care Act, together with expanded telehealth and rural health care workforce development and training programs.
Pandemic Response and Emergency Preparedness
The FY 2024 budget includes $20 billion in mandatory funding for HHS public health agencies in support of the Administration’s pandemic prevention and preparedness and biodefense priorities. It also includes $400 million in new discretionary resources within the Administration for Strategic Preparedness and Response to prepare for pandemics and biological threats, as well as key discretionary investments for the Biomedical Advanced Research and Development Authority and the Strategic National Stockpile to support advanced development and procurement of vaccines, therapeutics, and diagnostic capabilities against known and unknown high priority threats. The Administration’s proposal suggests $10.5 billion in discretionary funding to build public health capacity at the Centers for Disease Control (CDC) and for states and localities to expand response capacity to deal with emerging threats. Finally, the proposed budget supports efforts to modernize public health data systems, including providing CDC with the ability to establish cadres of response-ready staff trained to rapidly deploy during emergencies.
In other provisions, the Administration is proposing $50 million for the Public Health Emergency Fund to ensure that HHS is able to respond to emerging public health threats without delay, and mandatory funding to catalyze development of medications that would counter antimicrobial resistance. The budget also proposes key new HHS authorities to improve preparedness, notably to improve the resilience of the medical product supply chain.
Discretionary Programs Affecting Older Americans
The Older Americans Act (OAA) supports a range of home and community-based services, such as home delivered meals and other nutrition programs, in-home services, transportation, legal services, elder abuse prevention and caregiver support. Up until recently, however, the Act’s broad and critical mission has been undermined by inadequate funding. Over the past 20 years, the OAA has lost ground due to federal funding that has not kept pace with either inflation or growth in the older population.
Annual OAA discretionary funding declined over the 10-year period from FY 2009 to FY 2019, and funding levels each year remained below the FY 2010 level when funding was at its highest level ($2.328 billion). However, for FY 2020, total OAA funding, including supplemental funding to respond to the needs of seniors during the COVID pandemic, reached its highest level ($3.220 billion) in the Act’s 55-year history. This trend continued into FY 2021 with an increase of $96 million, but slowed in FY 2022 with a nominal boost of $28 million.
The National Committee supports recommendations in the President’s budget to further increase funding – by 18.5 percent in FY 2024 – for Older Americans Act programs, including:
- $1.284 billion for nutrition programs, a $218 million or 20 percent increase over the FY 2023 enacted level.
- $500 million for support services, a $90 million or 22 percent increase over the FY 2023 enacted level.
- $249.9 million for the National Family Caregiver Support Program, a $45 million or 22 percent increase over the FY 2023 enacted level.
- $70.2 million for Native American nutrition and supportive services, a $32 million or 83 percent increase over the FY 2023 enacted level.
- $14.2 million for the Lifespan Respite Program, a $4.2 million or 42 percent increase over the FY 2023 enacted level.
- $55.2 million for the Medicare State Health Insurance Assistance Program (SHIP), equal to the FY 2023 enacted level. SHIPs offer Medicare-eligible individuals, their families, and caregivers unbiased counseling to make informed health insurance decisions that optimize access to care and benefits.
Fast-track Budget Process Legislation
As Congress begins the process of designing a Budget Resolution for FY 2024 and considers the essential step of avoiding a first-ever default of our Nation’s obligations by raising the debt limit, we take this opportunity to emphasize again our strong opposition to the inclusion of any provisions authorizing a fast-track legislative process for Social Security and Medicare in the guise of ‘fiscal responsibility”. Legislative proposals such as the TRUST Act create a back-door mechanism for cutting these essential programs that would not be possible through the normal legislative process because of their popularity and importance to the public. We urge Congress to consider legislation that would expand these essential programs, not create a fast-track process to facilitate benefit cuts that would be devastating to hard-working middle-class Americans who rely on their protections.