TIME GOES BY | The Social Security Attack

by Ronnie Bennett

I know, I know – that headline is hardly news. But the zeal with which tea partiers and many other Republicans in Congress are attacking it means you and I need to be thoroughly informed. Let's start with the immediate danger.

BACKGROUND

The House budget for fiscal year 2011, passed in the wee hours of Saturday morning, calls for about a $1.7 billion cut to Social Security. But wait.

If you have been following Time Goes By posts about the program over the years, you know that Social Security is self-funded, including administrative costs. So what gives? How come Congress can cut those administrative costs?

Here is how: Social Security and SSI benefits are mandatory spending, meaning they are authorized by permanent law. They can be changed under certain circumstances, but that is not what is at risk right now.

Administrative costs, which have remained at about one percent of revenue for many years while providing excellent service, are discretionary spending. This means they are subject to the annual appropriations process (the budget) and Congress can change the amount every year affecting the number of employees and therefore, level of service.

Right now, because the government has lacked a budget for FY2011, administrative costs are frozen at 2010 levels - $11.5 billion - and the House budget cut of $1.7 billion, passed over the weekend, would leave only $9.8 billion.

The National Committee to Preserve Social Security and Medicare (NCPSSM), in a 18 February letter to Congress, pointed out what this cut means to the program:

“It means having to wait longer to get an appointment to file for benefits. It means not receiving a decision in a timely manner. It means getting a busy signal when you call an office or the Agency's toll-free 800 number telephone service.

“It means not having your change of address or direct deposit information processed in a timely fashion.

“And finally, it means significant employee furloughs or even office closures, resulting in even greater degradations of service to America's seniors.”

Having made a move across country last year, I know how well the Social Security Administration has handled that bank deposit change in the past and how difficult it would have been to my finances if the switch to a new bank had been delayed for even one month – something likely to become common if the budget cut is enacted.

CURRENT EVENTS

Regarding the “furloughs” mentioned by the NCPPSM, on the day before that letter, the Social Security Administration sent a letter to the employees' union requesting the start of negotiations on furloughs that would be required under the proposed cut. Those talks must begin by 22 March.

Should the cut to Social Security administrative costs remain in the final bill and should President Obama sign it, the furloughs and all they mean to Social Security beneficiaries will go into effect.

Congress is cutting the time for the budget bill close. The House has sent it to the Senate, but the Senate is not in session this week returning on 28 February, just five days before 4 March.

And what is the significance of that date?

Because a budget for FY2011 could not be agreed upon last year, the federal government is currently operating under a continuing resolution that will end on 4 March. That is the day that many fear the government will shut down because they can't spend any money if a new budget has not been signed by the president before then.

WHAT'S NEXT

Given the draconian cuts to virtually every federal agency (including Social Security) the House budget contains, many of which will be disputed in the Senate (Senate Majority Leader Harry Reid has promised no cuts to Social Security), what do YOU think the chances are of having a signed budget by 4 March?

Yesterday on CNN, Republican Senator Richard Luger of Indiana told host Candy Crowley:

”I would not support the entirety of the House bill, but I think the basic problem presently is there's very little time. There is the imminence of a government shutdown.”

Democratic Senator Chuck Schumer of New York said on the same program that “Speaker Boehner seems to be on a course that would inevitably lead to a shutdown,” and from what I read, Republicans in general seem to be eager for it, especially those new tea partiers in Congress. Schumer suggested a stopgap budget to forestall a shutdown, but that seems a remote possibility.

If the federal government shuts down, non-essential employees cannot go to work. Last week, both the president and House Minority Leader Nancy Pelosi said Social Security checks would be delayed, and that would almost immediately affect those of us (about half of Social Security recipients) who receive our Social Security direct deposits or checks on the second Wednesday of the month (9 March).

If your monthly budget is as tight as mine, that is a disaster. Sure, I can eat, but some people won't. And depending on how long a shutdown lasted I, like many others, couldn't pay some bills on time. The 1995 “Newt Gingrich shutdown” lasted five days and Congress is much more polarized this time.

So in preparation, I'm arranging to transfer some money from elsewhere into my checking account. What about you?

TIME GOES BY | The Social Security Attack