[Budget of the United States Government]
[VI. Investing in the Common Good: Program Performance in Federal Functions]
[26. Social Security]
[From the U.S. Government Publishing Office, www.gpo.gov]
26. SOCIAL SECURITY
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Table 26-1. FEDERAL RESOURCES IN SUPPORT OF SOCIAL SECURITY
(In millions of dollars)
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Estimate
Function 650 1998 -----------------------------------------------------------
Actual 1999 2000 2001 2002 2003 2004
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Spending:
Discretionary Budget Authority.......... 3,205 3,164 3,226 3,225 3,225 3,225 3,225
Mandatory Outlays:
Existing law.......................... 376,119 389,157 405,231 423,519 443,918 464,915 487,192
Proposed legislation.................. ........ ........ 3 78 141 177 186
Tax Expenditures:
Existing law............................ 22,770 23,415 24,650 25,930 27,395 28,990 30,660
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The Old-Age, Survivors, and Disability Insurance (OASDI) programs,
popularly known as Social Security, will spend $408 billion in 2000 to
provide a comprehensive package of protection against the loss of
earnings due to retirement, disability, or death.
Social Security provides monthly benefits to retired and disabled
workers who gain insured status and to their eligible spouses, children,
and survivors. The Social Security Act of 1935 provided retirement
benefits, and the 1939 amendments provided benefits for survivors and
dependents. These benefits now comprise the Old Age and Survivors
Insurance (OASI) program. Congress provided benefits for disabled
workers by enacting the Disability Insurance (DI) program in 1956 and
added benefits for the dependents of disabled workers in 1958.
The Government will collect $473 billion in Social Security taxes in
2000. These taxes will be credited to the OASI and DI trust funds, along
with $57 billion of interest on Treasury securities held by the trust
funds.
In 1998, Social Security paid out $372 billion to 42 million
beneficiaries. These payments included $250 billion in benefits to more
than 30 million retired workers and their families. Along with
retirement benefits, Social Security also provides income security for
survivors of deceased workers. In 1998, Social Security paid about $73
billion in benefits to more than seven million survivors. The DI program
provides income security for workers and their families in the event the
family's primary wage earner becomes disabled. In 1998, Social Security
paid about $48 billion in benefits to more than six million disabled
workers and their families.
Social Security is a crucial source of income for millions of
Americans and their families. Without Social Security, elderly retirees
and disabled workers would face a significantly higher risk of poverty.
The OASDI programs will serve 45 million beneficiaries in 2000.
The Social Security Administration (SSA)
To operate a program of this magnitude, both in terms of the dollar
amounts involved and the size of the population served, requires an
efficient and responsive administrative structure. SSA, which
administers the OASI and DI programs, touches the lives of millions of
Americans every year. SSA also runs the Supplemental Security Income
(SSI) program for low-income aged and disabled individuals, which is
part of the Income Security function (see Chapter 25). In addition, the
agency provides services that support the Medicare program on behalf of
the Health
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Care Financing Administration, which is part of the Medicare function
(see Chapter 24). Because SSA interacts extensively with the American
public, the Vice President's National Partnership for Reinventing
Government designated SSA as a High Impact Agency.
SSA's caseload has grown markedly in recent decades, while its
staffing levels have declined. The agency serves over 11 million more
people today than it did 14 years ago, with 19,000 fewer full-time
equivalent staff. More than 44 percent of the caseload growth has
occurred in disability claims, which are substantially more complicated
to administer than other types of claims. To maintain and improve
performance under these conditions requires the agency to continuously
increase productivity and efficiency.
SSA undertakes a variety of activities in administering its programs.
These activities include issuing Social Security numbers, maintaining
earnings records for wage earners and self-employed individuals, taking
claims for benefits and determining eligibility, updating beneficiary
eligibility information, educating the public about the programs,
combating fraud, and conducting research, policy analysis and program
evaluation. These activities are largely integrated across the various
programs, allowing the agency to minimize duplication of effort and
provide one-stop service to customers.
SSA's Performance Plan for 2000 includes a number of performance
indicators that reflect the agency's goals of responsive programs, good
customer service, efficiency and program integrity, and strengthening
public understanding of Social Security. Like the agency's
administrative activities, these goals cut across programs. SSA's
commitments and performance measures for 2000 include the following.
Promoting responsive programs: SSA recognizes that Social Security
programs must reflect the interests of beneficiaries and society as a
whole. Programs must evolve to reflect changes in the economy,
demographics, technology, medicine, and other areas. Many DI and SSI
beneficiaries with disabilities, for example, want to be independent and
work. Many of them can work, despite their impairments, if they receive
the support they need. Yet less than one percent of disabled
beneficiaries in any given year actually leave SSA's programs due to
work. One of SSA's strategic objectives is to shape the disability
program in a manner that increases self-sufficiency.
The budget proposes a new program to encourage DI beneficiaries and
SSI disabled recipients to enter the workforce. Currently, SSA refers
these beneficiaries to State employment service providers. Under this
proposal, beneficiaries can choose their own employment service
provider--and the provider can keep a share of the DI and SSI benefits
that the Federal Government will no longer pay to these individuals once
they leave the rolls. The budget also includes a demonstration project
that reduces an individual's DI benefits by $1 for each $2 earned above
a specified level. Under current law, a DI beneficiary in the extended
period of eligibility receives no cash benefit if he or she earns more
than $500 in a month.
SSA plans to set numerical goals for increasing the number of working
DI and SSI disabled beneficiaries. The goals will be set once baseline
data is available.
Improving customer service delivery: Roughly three-quarters SSA's
total administrative budget is devoted to the day-to-day work generated
by requests for service from the general public. Much of this work takes
the form of determining eligibility and processing claims for benefits.
The time required to process claims for benefits is affected by the
design of the eligibility determination procedure, as well as by the
level of resources earmarked for claims-processing activities and the
number of claims received.
In 2000, the average processing time for initial disability
claims will be 100 days, maintaining SSA's current performance
level on this measure.
The budget provides sufficient administrative funding to meet this
goal. SSA also is investigating ways to streamline its disability
eligibility determination process. Because any benefits from process
changes would not materialize until after 2000, the performance goal is
based on the current process. Once SSA has made decisions on how to
redesign its disability determination process,
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it will specify long-term performance goals for claims processing time
that are relevant to the redesigned process. Improving the disability
determination process is one of the Administration's PMO's for 2000.
SSA will maintain its current performance level of processing
83 percent of OASI claims by the time the first regular
payment is due or within 14 days from the effective filing
date, if later.
SSA will maintain its current performance level of ensuring
that callers gain access to the toll-free 800 number within
five minutes of their first call 95 percent of the time.
Ninety percent of callers will get through on their first
attempt.
Increasing operational efficiency and program integrity: The budget
includes approximately $1.7 billion for activities undertaken by SSA to
ensure the integrity of records and payments. These activities include
reviewing claimants' eligibility for continued benefits, collecting
debt, detecting overpayments, and investigating and deterring fraud.
SSA is in the midst of a seven-year effort to eliminate the backlog of
Continuing Disability Reviews (CDRs) that built up prior to 1996. To
stay on schedule for eliminating the backlog by the end of 2002, SSA
will conduct 1.9 million CDRs in 2000. SSA completed 26 percent of its
plan in 1998 and expects to reach 44 percent completion by the end of
1999. This concentrated effort is helping increase public confidence in
the integrity of SSA's disability programs by ensuring that only people
who continue to be disabled receive benefits. CDRs conducted in 1998-
2002 will produce an estimated five-year savings of $5.3 billion in the
DI program and $3 billion in the SSI program. The budget includes the
funds necessary to keep the plan on schedule.
In 2000, SSA will complete 63 percent of its plan for
eliminating the backlog of Continuing Disability Reviews.
In a program the size of SSI, a small percentage error translates into
large dollar amounts. Consequently, SSA has committed to improving the
SSI payment accuracy rate to at least 96 percent by 2002. The goal for
2000 equates to a reduction in overpayment errors of $160 million below
the 1996 level; the goal for 2002 equates to a $535 million overpayment
error reduction.
SSA will improve the SSI payment accuracy rate to 95 percent
in 2000, up from 94.5 percent in 1996.
The best tool for improving the accuracy of SSI payments is the
redetermination process, which assesses the income and resources
affecting beneficiaries' eligibility and payment amounts. SSA saves $7
in for every $1 spent on redeterminations. The budget includes $75
million for an additional 400,000 high-error profile redeterminations,
bringing the total number of non-disability redeterminations to 2.2
million.
Strengthening public understanding of Social Security programs: The
budget includes more than $100 million for the development, production
and distribution of products to educate the public about the benefits
available through Social Security, as well as Social Security's larger
impact on society. SSA will conduct a survey in 1999 to measure the
current level of public understanding, which will be used as baseline
data to measure progress toward this strategic goal.
Part of the public education is the issuance of Personal Earnings and
Benefit Estimate Statements (PEBES), which provide workers with an
estimate of their potential future Social Security benefits based on
their earning history to date. Starting in 2000, SSA is required by law
to issue PEBES every year to all eligible workers age 25 and over.
SSA will issue 126 million PEBES in 2000, reaching all
eligible workers age 25 and over as required by law.
Tax Expenditures
Social Security recipients pay taxes on their Social Security benefits
only when their overall income, including Social Security, exceeds
certain income thresholds. The exclusion of Social Security income below
these thresholds reduces total income tax revenue by $25 billion in 2000
and $138 billion from 2000 to 2004.