Feb

5
2008-02-05
Social Security funding & the federal budget proposal


Workers pay FICA taxes on their earnings.  They anticipate that when they reach retirement age or become disabled they will collect Social Security benefits.  They also anticipate that benefits will be available for their survivors after they die.

The FICA taxes are deposited in the Social Security trust funds which are invested in government bonds.  These trust funds pay Social Security benefits  and pay the necessary administrative expenses to run the Social Security Administration [salaries, rent, etc].  Although these administrative are
[appropriately] paid from the Social Security trust funds, the amount of this  funding is including in the federal budget process.  Thus, essentially the Social Security Administration must "compete" with other agencies to get its share of the federal budget for its administrative expenses.

Funding for SSA in recent years has been insufficient to prevent a growing backlog of claims to be processed.  It is now not uncommon for some people to wait over two years to receive their disability benefits.  In some areas, local offices have been closed or have reduced their hours.

For FY 2008 [10/1/07-9/30/08], Congress allocated $275 million over the amount the Administration requested to address the growing crisis at SSA.  This legislation was vetoed.  The final enacted legislation gave SSA $150 million more than the Administration's budget proposal.

In early February, the Administration will submit its budget proposal for FY 2009 to Congress.  If the crisis at SSA is to be addressed, it is essential that efforts be made throughout the FY 2009 budget process to ensure that funding for SSA administrative expenses is a priority.


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