How Will the Social Security Budget Affect You?

For anyone receiving Social Security benefits, the system seems ancient and untouchable — after all, it’s been around since the Great Depression, and has so far survived numerous attempts at cutbacks that would have reduced benefits for many recipients. However, Social Security isn’t as impervious to change as we might think — and in fact, in 2018, lawmakers are trying to reduce its budget and thus decrease the benefits that are offered.

social security budget

It’s all part of the tax plan currently making its way through the Senate, which is being championed by numerous Republican lawmakers but not fully accepted by others. Though the Social Security Administration, or SSA, requested certain funds for its 2018 budget, the proposed Senate tax plan aims to cut its funding by $400 million, or nearly 4 percent of its total budget.

Social Security is a federal entitlement program that provides benefits to retirees who have worked in the United States for a number of years, as well as their spouses and dependents. The program also helps fund people with disabilities as well as low-income Americans who are unable to work because of an injury or illness. Today, the system serves 63.3 million retirees, disabled people and their families, an expansion of 14 percent since 2010.

In its 2018 Budget Request, the SSA requested $12.457 billion to complete a core set of goals, which it outlined in documents submitted to members of Congress. However, the House of Representatives aimed to freeze the budget at its 2017 level, which was $10.5 billion; the Senate would actually make cuts, dropping the Social Security budget for fiscal year 2018 to $10.1 billion. This leaves a more than $2 billion gap between what the agency says it needs, and what the current government is willing to provide.

Although the budget is still making its way through the Senate and no concrete decision has been reached yet, it’s critical to understand how such cuts may affect your Social Security benefits if they do go through. To start, consider the reason that the SSA was asking for over $12 billion: The agency said it would use the money to complete several crucial services.

To start, the SSA wants to reduce the backlog that currently exists for disability hearings, by improving the process and increasing the number of decisions made. The agency would aims to increase hiring and expand its online service options, as well as to support the bulk of its operations, including field offices, processing centers and its phone hotline. The SSA’s budget request said it hopes to make faster and more accurate disability decisions by using more electronic medical information and modernizing case processing systems.

From there, the agency would add three new CDI (cooperative disability investigation) units in order to make more efforts to prevent and prosecute Social Security fraud, as well as train employees more effectively in leadership and management to help them maximize their performance and better serve Social Security recipients.

The SSA also wants to modernize its information technology infrastructure to “improve public service, reduce costs, and enhance data driven decision-making,” and when it comes to disability programs, it wants to help people with disabilities find ways to participate in the labor force and thus reduce their reliance on Social Security benefits.

This last point is a large priority of the SSA in 2018, as the agency noted on its budget proposal that currently only 20 percent of disabled people in the United States participate in the labor force, a low number that the SSA wants to change. However, this will require creating new outreach and programs that don’t currently exist, and thus will require a pretty substantial budget increase from fiscal year 2017.

When considering the budget changes that may occur if the Senate plan is passed, it’s important to consider how one or more of the above goals would have to be changed with $2 billion less funding in the SSA’s budget. First, expect that many of the improvements the agency suggested won’t actually happen; these will require an increase in funding as many of them specify hiring more staffers or opening new centers, all of which cost money that the SSA doesn’t currently have.

Second, anticipate that some benefits might actually be slashed — and that you may overall experience more delays, lower-quality customer service and fewer opportunities to access paperwork or submit records online. Without the modernization push that the SSA described in its budget request, many issues will remain with lags in processing and an overall difficulty in keeping track of everything you need to submit to prove your eligibility.