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Social Security and Medicare: Are they really protected in sequestration?

By Steve Kofahl

In August, 2011, Congress and the White House negotiated a deal that slashes $ 1.2 trillion in Federal spending over 10 years, as the price for raising the debt ceiling for about 15 months. Across the board cuts will begin in January 2013 through sequestration, equally divided between military and domestic spending, unless another agreement replaces the one made last year.

The deal spared Social Security and Medicare benefits themselves, but there would be deep cuts in funding and staffing needed by the Social Security Administration to run these programs. It is not enough just to continue paying benefits, if there are delays and errors in new benefit applications.

By the end of this year, the Agency will have already lost 9,000 employees through attrition over three years, due to flat budgets. The same rate of attrition will continue. However, in his June 27 testimony before the House Ways & Means Social Security Subcommittee, SSA Commissioner Michael Astrue stated that the Agency might have to lay off another 1,000 employees next year, due to sequestration. The Agency would go from a flat budget to a likely 8% cut, crippling service delivery at a time when 10,000 people are filing for retirement benefits every day, and record numbers are applying for disability benefits.

The public has already felt the pain of cuts to SSA’s administrative budget. The Agency has closed dozens of field offices, and chopped office hours everywhere by 30 minutes a day. It takes longer to get a decision on a disability benefit application. It’s often hard to get through on the phones.

The employees of Social Security know that service has suffered in ways that are not apparent to the general public. Internet self-service, marketed aggressively by the Agency, is costing applicants money. Traditional benefit applications have been “streamlined” for the Internet, and important information is no longer collected, resulting in underpayments that will never be detected. Too many applicants have no discussion with a trained SSA employee who can explain their rights and responsibilities, what kinds of benefits are available, and when it may be best to start payments.

The American Federation of Government Employees has raised these issues with SSA and with Congress for the last five years, but our expressions of concern have largely fallen on deaf ears. That may be about to change. Entities responsible for oversight are beginning to notice. The independent Social Security Advisory Board reported that front-line Agency employees in Georgia complained to them on May 9 that Internet disability applications are often incomplete, and that applicants have problems selecting the most advantageous month for retirement benefits to begin when they file online.

A May 2012 report by SSA’s Office of Quality Performance assessed the impact of Internet application streamlining. It projected that streamlining of marriage history questions alone will result in $2.8 million in underpayments to applicants (mostly women) who filed in the year ending September 2011. The report concludes that a reassessment of the streamlining policy is warranted.

The SSA Office of Inspector General sent a report on Internet disability claims to the Commissioner early this year, but it has not been made public. This is the first time OIG embargoed a report in this way, to my knowledge, so it probably has more disturbing data about lost benefits and diminished service.

Congressmen Dicks, McDermott, and Reichert; as well as Senators Murray and Cantwell; serve on committees that affect SSA administrative funding and oversight. Let them hear from you.

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