[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.