Ways and Means Democrats Blast Republican Plan to Shut Down Social Security

by on February 16, 2011 · 4 comments

in Economy

From California Congressman Xavier Becerra’s website

GOP proposal would lead to a month of furloughs at Social Security Administration

WASHINGTON, DC—The 2011 budget plan presented this week by the House Republican Majority strips $1.7 billion away from the Social Security Administration (SSA) for the remainder of the year, a cut so drastic that SSA would need to impose the equivalent of a month of furloughs.  The entire agency would have to shut down all operations for 20 working days.  The phones would not be answered, field offices would be closed, and claims processing would halt.  Over half a million new retirees, disabled workers and survivors would be forced into a backlog before they could receive the benefits they earned.

Ways and Means Committee Ranking Member Sander M. Levin (D-MI), Social Security Subcommittee Ranking Member Xavier Becerra (D-CA), and Democratic Subcommittee Reps. Shelley Berkley (D-NV) and Pete Stark (D-CA), who is also Health Subcommittee Ranking Member, released the following statements in response:

Ranking Member Levin: “This Republican proposal is as irresponsible as it is shortsighted.  To jeopardize a lifeline for half a million new Social Security beneficiaries in order to score short term political points is simply bad policy.  This reckless proposal would mean hundreds of thousands of Americans won’t get their Social Security checks this year. It’s a perfect example of how little House Republicans seem to care if their rigid ideological crusade hurts real people.”

Social Security Ranking Member Becerra:  “There are smart cuts… there are painful, but necessary cuts… and then there’s this hatchet job.

“Instead of going after wasteful spending, this Republican plan would close down Social Security offices for an entire month this year. That means half a million American seniors, disabled workers and surviving family members—working people who have earned their Social Security benefits—will find themselves placed into a backlog of unprocessed claims. It means phones going unanswered, claims going unprocessed and a ripple effect of backlogged cases that will continue well beyond this year.

“This is the type of reckless cut that does nothing to fix our long term deficits while inflicting costly, devastating harm on the American people.”

Rep. Berkley: “These cuts will only punish Americans who count on Social Security and Medicare by adding to backlogs and limiting assistance for our seniors, the disabled and families that have lost a parent or spouse.  We should be finding ways to strengthen the delivery of these benefits, not shutting down Social Security Administration offices and limiting the resources and staff needed to process retirement claims or to assist disabled workers and survivors.  Whether they live in Las Vegas or any other community, those who are eligible to receive Social Security and Medicare earned the right to these benefits and these cuts will threaten our ability to make good on the promise we made to them as a nation.”

Health Subcommittee Ranking Member Stark: “The Republicans’ plan is a threat to seniors and others who depend on Social Security benefits to survive. Republican cuts would leave the Social Security Administration without enough money to do its job. This means many seniors and workers with disabilities will not get their benefits on time, and the current claims backlog will get even worse.”

House Republicans have proposed a $1.7 billion reduction in SSA funding for the remainder of 2011.  That includes:

  • Cutting SSA’s operating budget by over a billion dollars (8.5%) below what’s needed for 2011.  That level is $506 million below what SSA actually spent in 2010 to process claims and operate Social Security offices.
  • Cutting an additional $500 million by draining SSA’s reserve account.  Most of the money in reserve is already allocated for this year’s expenses and the rest is budgeted for next year’s planned information technology improvements.
  • Rescinding an additional $118 million from funds already set aside to build a new National Computer Center, which could delay equipping this mission-critical project.

SSA is already operating under a partial hiring freeze because of the current continuing resolution, which is likely to result in nearly 3,500 lost jobs for 2011.  These additional cuts could lead to SSA offices closing their doors, stopping all claims processing, and not answering the phones for about a month – one month out of the seven remaining in 2011.  If Social Security shuts down for a month:

  • 400,000 people would not have their retirement, survivors, and Medicare applications processed this year, resulting in a large backlog of unprocessed retirement and survivor claims for the first time in SSA history.
  • 290,000 people would not have their initial disability benefit applications processed, which means disabled workers, who already wait months for their applications to be processed, will wait an average of 30 days longer.
  • 70,000 fewer people will get a disability appeals hearing this year, which means workers waiting to present an appeal to a judge, who already wait over a year, will wait longer.
  • 32,000 fewer continuing disability reviews, which means wasting millions of dollars on improper payments now.

Click here for a comparison of the President’s FY 2012 budget and the Republican continuing resolution.

{ 3 comments… read them below or add one }

avatar JEC February 17, 2011 at 9:47 am

The laws governing Social Security are continually ignored – by both parties. Just is now the GOP wants to take that final step and move SS directly into the General Fund. The rational behind ‘stripping’ money from the SSA – SS no longer is producing a “surplus”. Be cautious, curves ahead – the “surplus” belongs to the SS trust fund, not the general fund (GF). The GF has been “borrowing” this surplus and issuing IOU’s for decades. In 2006 George Bush said those IOU’s were worthless. But the GF continues to “borrow” that surplus. (Is there a lawyer in the house; when is a loan not a loan – when you declare your intention to never pay it back) But now because of the high levels of unemployment, contributions to SS have fallen and the surplus is gone. So in a complete bastardization of the SS laws, the GOP wants to turn our retirement contributions to SS into a General Fund Tax. As far as I can see, this is a $1.7 billion tax increase – or a theft of contributions.

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avatar RB February 17, 2011 at 12:31 pm

Social Security has always been backed by the Federal government not some account with money. No theft has occurred. Changes in benfits and contributions are an attempts to protect both the generations recieving benefits and the gernation paying benefits. Since the Federal Government can always print money, it is unlikely people will not recieve retirement benefits. The middle class and SS retirees are lossing wealth and will continue to loss wealth as the dollar sinks and inflation increases. The current stated economic policy of the Federal government through the Federal Reserve is to weaken the dollar and increase inflation. This should scare retiree more than the GOP.

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avatar JEC February 18, 2011 at 9:11 am

Certainly the value of the dollar is in decline – but that’s a bit off the issue of how the Federal Government ‘steals’ our SS contributions. Please examine the facts; that the SS contributions has been used to fund annual operations. This is a very important distinction – SS was and is designed to be a stand alone self sustaining fund. It’s all about ‘Fund Accounting’ and it is the way of the business world. Think of a common benefits package; employer 401K retirement contribution that are to be paid as you work. The question is whose money is that? Companies can and do reach in and take that money whenever they feel the need (like GM, USX). Upon retirement the money’s gone – gee, what a surprise. I might agree rather than theft it’s fraud – in either case it’s dishonest. Workers pay for the benefits they receive by getting less pay. Employers are inclined to offer increases in benefits rather than pay – because pay raises cost them 100% where as an enhanced benefit may only cost them 50% or less.

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