by Elizabeth Bauer, Forbes Contributor on 6/25/2018. For Forbes.com
Social Security advocates have been sounding the alarm: Republicans, stymied in their efforts to cut benefits in the overall Social Security program, have set their sights on the program’s administrative budget, leaving frail elderly ladies travelling endlessly and waiting for hours on end for their turn in the line at the Social Security field office.
Here’s Nancy Altman of the advocacy group Social Security Works in the Baltimore Sun last week:
[I]n recent years, congressional Republicans have gotten in the way, starving the Social Security Administration (SSA) of the funding it needs to properly administer the program. Among its many harms, the underfunding and other efforts to undermine service have resulted in office closures around the country, including right here in Baltimore.
North Baltimore’s Social Security office is scheduled to closeFriday, and there apparently will be no replacement. The agency claims that they are not motivated by funding or the directive of the Office of Management and Budget to “reduce” the federal “footprint,” but no other explanation makes sense.
The closing will force North Baltimore Social Security beneficiaries, many of whom have limited mobility and rely on public transportation, to travel miles away to offices in downtown Baltimore or Towson. When they get there, wait times are likely to be very long since there are now fewer offices to cover a large and growing population of beneficiaries.
And earlier this year, in January, Max Richtman of the National Committee to Preserve Social Security and Medicare wrote in The Hill:
So why continue to cut the agency’s budget? Social Security’s enemies in the Congress may have a rather cynical reason. Starving SSA’s operating funding may be a backdoor attempt to dismantle Social Security by eroding public confidence. Frustrate enough applicants with lousy service and they may turn against Social Security itself, making it easier to cut the benefits in the future. We vehemently reject that strategy.
It is true that there are funding issues surrounding Social Security, but a closer look at the situation reveals greater complexity.
After all, virtually all tasks associated with Social Security Old Age benefits can be done online. You can view your benefit statement, apply for Social Security retirement or disability benefits and Medicare, update your address or direct deposit information, and more. Many of the Social Security applicants or recipients that Altman and Richtman worry about do not actually need to come to the office at all, but we’re told that we can’t expect the elderly to use computers so they need to have the in-person option preserved for them. However, most retirees have family members who are able to help and of those who don’t, all of the same sort of institutions (public libraries, townships, even the local VFW) that came to the aid of Obamacare “exchange” users or provide other services to the elderly, should certainly be able to help these individuals, which in turn would have the further benefit of providing a means to further connect up older Americans to the internet, whether it’s e-mail or online bill-pay or other benefits.
Other tasks, such as applying for survivors benefits, must be done in-person or by phone. Obtaining a replacement Social Security card can also be done online only in certain circumstances; otherwise, original documents must be mailed in (similar to obtaining a passport) or presented in-person at an office. If documents which may be required for disability applications are too difficult to replace if lost (and the risk is too high that they may be lost if mailed in), an in-person appointment is recommended. SSI benefits generally must be applied for in-person, and any individual who does not speak English and wishes assistance in another language must apply in-person. But even these in-person tasks can, and should, be adapted to be able to be managed online or by phone. What’s missing in the system now is coordination with other government agencies (federal, state or local) and with community groups.
After all, certain of these tasks must be done in-person at field offices (or by mail with the attendant risk of lost documents) solely due to the need to verify the authenticity of certain documents. Perhaps this is more complex than I imagine, but it hardly seems like something that requires a Social Security specialist’s skills to do; surely it would be a win-win situation for individuals to be able to have a local governmental unit verify the authenticity of the document prior to forwarding photocopies or document scans onward.
SSI benefits are so complex to administer that their cost is 9% of the overall benefits paid out (compared to 0.3% for old age/survivors and 1.8% for disability), but SSI recipients, who are overwhelmingly under-65s who qualify by reason of disability, generally qualify for other state or federal benefits as well, and other agencies are already involved in providing them services, which means that closer coordination, with a focus on return to (or entry into) the workforce, could only benefit them.
And, finally, again, much as we’d wish that by the time immigrants have resided in the United States long enough to be eligible for these benefits, they’d have learned English, it isn’t true. Yet, again, multiple language choices for forms ought to be a no-brainer (and perhaps it’s in the works) and those who speak an obscure enough language that a form wouldn’t cover it are surely receiving translation services by telephone anyway.
All of which is not to say that there aren’t real funding issues; it is no great surprise that as the number of new disability applications grew from a historical norm of 1.5 million per year to a peak of 2.02 million in 2011, before declining again back to that 1.5 million norm now, the disability claims hearings backlog grew, too. And the current rate of field office closures has led to fewer claims filed:
A 2017 study by Manasi Deshpande of the University of Chicago and Yue Li of the State University of New York at Albany found that “field office closings lead to large and persistent reductions in the number of disability recipients.” Applicants with “moderately severe conditions, low education levels and low pre-application earnings” were hardest hit.
— but, again, I am not suggesting elimination of support, but rather delivering it in different ways.
Finally, Altman and Richtman both take offense at Congress having budgetary authority over the system’s administration budget. Here’s Altman again:
Social Security currently has an accumulated surplus of $2.9 trillion. Yet, even though these administrative costs, like Social Security benefits themselves, are self-financed and therefore do not add a penny to the federal deficit, Congressstill has the power to limit how much SSA can spend on administration.
But this is a mistaken notion. Even though the total spending (about $12 billion per year is comparatively small, administrative costs are still not “free”. Amounts spent on administrative costs cannot be spent to pay out benefits, so Congress has a duty to exercise oversight every bit as much as for other government agencies.
What’s the bottom line? Yes, the issue is complex, and, yes, Social Security administrative costs are low and we shouldn’t apply mistaken efforts at cost-savings that may cause harm. But the alarm bells being rung about field office closures, and the insistence that retirees need in-person service at a field office trouble me greatly because this comes out of a belief that Americans over the age of 65 cannot be expected to navigate the internet themselves, and at the same time that there is no one to help them in their local communities — and the latter, if true, is a much bigger problem.
Am I going too far, or stunningly naïve in my assessment? Tell me at JaneTheActuary.com!