The Social Security Administration`s Budget Request for Fiscal Year 2005

SOCIAL SECURITY ADMINISTRATION

 

 

 

THE FISCAL YEAR 2005 BUDGET

PRESS RELEASE

 

I.	SUMMARY
II.	TRUST FUND PROGRAMS – Old-Age, Survivors and Disability Insurance
III.	GENERAL FUND PROGRAMS:
	Supplemental Security Income
	Special Benefits for Certain World War II Veterans
IV.	LIMITATION ON ADMINISTRATIVE EXPENSES
V.	OFFICE OF THE INSPECTOR GENERAL

 

 

SSA is also facing new responsibilities as it prepares to play an important role in the implementation of the Medicare prescription drug law recently signed by the President. SSA will withhold the premiums for this program from beneficiaries' Social Security checks, and also help determine eligibility of low-income seniors for drug benefit subsidies.

Under authority provided by section 234 of the Social Security Act, the budget includes $73.8 million for trust-fund financed demonstration projects to test alternative methods of treating the work activity of disability insurance beneficiaries and other variations in limitations and conditions that apply to them.

The table below provides information on Social Security beneficiaries, benefit payments and the payroll tax.

Legislative Proposals Related to OASDI

The Administration has several proposals that will improve the integrity of the OASDI programs:

• Dedicated administrative funding of $561 million to ensure continuation of cost-effective continuing disability reviews. SSA has generated government-wide savings of approximately $10 for each $1 spent on such activities. SSA's 2002 continuing disability reviews are expected to yield $6 billion in lifetime program savings.



• The ability to independently verify whether beneficiaries have pension income from employment not covered by Social Security. These pensions are designed as a substitute for Social Security and, as such, the law requires Social Security benefits be reduced.



• Closing the loophole in Social Security law that allows some State and local government workers to avoid substantial offsets in Social Security benefits by lengthening the time in covered employment required to be exempt from the Government Pension Offset (GPO).



• Improving overpayment recovery by expanding cross-program recovery authority and allowing SSA to withhold a larger sum in the case of bigger one-time payments.



• Requiring States to provide SSA with timely death information in an electronic form. The anticipated program savings will be used to offset State costs.

The President's FY 2005 budget also proposes legislation to compensate the Social Security Trust Funds for the equivalent of payroll taxes on deemed wages posted to the Social Security earnings records of uniformed service personnel in 2000 and 2001.

The SSI account also funds costs related to successful vocational rehabilitation services provided to disabled SSI recipients, either through reimbursement to State Vocational Rehabilitation agencies or through payments to Employment Networks under the Ticket to Work and Self-Sufficiency Program.

In addition, this account funds broad-based cross-program research projects in the Social Security and SSI programs as well as projects specific to SSI program issues. Research and demonstration projects cover a wide range of topics, including: basic data about our programs and their beneficiaries, analysis of proposals for Social Security reform, testing various approaches for retaining disabled individuals in the workforce and improving employment outcomes for disability beneficiaries, promoting research in critical disability policy research areas, and policy evaluation of important Agency initiatives.

The Administration is proposing to extend pre-effectuation review provisions already in place for Social Security disability claims to SSI adult disability and blindness cases. By providing a review of high-risk SSI allowances, this provision, like its Title II counterpart, improves the accuracy of initial decisions. Pre-effectuation review yields significant ongoing program savings, well in excess of the resources required to conduct the reviews.

For both Social Security and SSI, the President's budget proposes dedicated administrative funding to ensure continuation of cost-effective continuing disability reviews. Additional proposals will simplify SSI administration, implement other elements of the SSI Corrective Action Plan, and eliminate SSI dedicated accounts for children residing with natural or adoptive parents.

The President's budget would also allow refugees and asylees to receive SSI for eight years after entry into the country. Currently, refugees and asylees who have not become citizens can only receive SSI for seven years after entry. The proposal recognizes that some individuals have been unable to obtain citizenship within seven years due to a combination of processing delays and, for asylees, statutory caps on the number who can become permanent residents. The policy would continue through 2007.

Special Benefits for Certain World War II Veterans

This program funds monthly benefits for certain veterans of World War II who reside outside of the United States, and the administrative costs of paying the benefits. The program applies to veterans who served in the active military, naval or air services of the United States, including Filipino veterans who served in the organized military forces of the Philippines while those forces were in the service of the U.S. Armed Forces, and who were eligible for SSI as of December 1999. Veterans who meet these and other requirements may be entitled to receive a special benefit for each month they subsequently reside outside the United States. (These veterans are not eligible for SSI since SSI benefits generally terminate when an individual leaves the United States.) Special benefits are paid only to the veteran.

Payments began in May 2000 to veterans who took advantage of the new program and returned to their homeland. California has chosen to supplement the Federal payment, which is administered by SSA for the State.

These resources are applied to: processing retirement, survivors, disability and SSI claims; continuing to implement the Ticket to Work and Self-Sufficiency Program; updating beneficiary eligibility information; processing applications for Social Security numbers and posting annual earnings to workers' records; operating a nationwide 800-number; continuing to educate the public on long-term financing issues affecting solvency; and operating and improving SSA's automated data processing and telecommunications systems. In addition, SSA is facing new responsibilities as it prepares to play an important role in the implementation of the Medicare prescription drug law recently signed by the President.

At less than 2 percent of total outlays, SSA's administrative expenses continue to be a very small portion of the Agency's overall spending. The LAE budget is driven by the size of the programs we administer - both in terms of the amount of work we do and the number of people we need to do it - and by our continuing efforts to improve service, efficiency and program integrity. This budget, which is an increase of nearly 7 percent over FY 2004, supports our efforts to operate at a high level of efficiency and provide responsive service. SSA has set a goal of achieving at least 2 percent improvement in productivity per year.

Commissioner Barnhart is committed to providing better service to Americans. Her ongoing Service Delivery Assessment examines all SSA programs and processes with fresh eyes, drawing on expertise from front-line as well as headquarters staff. It identifies improvements needed to meet each of SSA's operational responsibilities, such as retooling business processes and leveraging technology. The Service Delivery Assessment also recognizes that SSA must make the most effective and efficient use of its funds in the face of competing national priorities and constraints in government-wide resources. Finally, it helps SSA address the challenge of serving record numbers of beneficiaries at the same time that a large portion of SSA's own workforce will be retiring.

We began the Service Delivery Assessment with a focus on the processing of claims for Social Security Disability Insurance and Supplemental Security Income benefits. SSA continues to be rated highly in public satisfaction surveys in spite of growing workloads, and progress has already been made in improving overall disability processing times. However, individuals who initially are denied disability benefits and who appeal have to wait almost an additional year before a final hearing decision is made. To address this issue, SSA is implementing several initiatives in 2004 and 2005, including replacing its paper-driven disability claims process with a more efficient electronic system.

The new electronic disability claims filing process is expected to reduce processing times significantly over the long term. Rollout (which is estimated to be completed nationally in 18 months) began in January 2004. In the paper-driven process, when a claimant requests a hearing, it often takes more than a month simply to locate the claimant's folder and deliver it to the appropriate hearing office. This will change with the new paperless process, and costs related to locating, mailing, and storing paper files will be significantly reduced.

Beyond 2005, SSA is developing an improved process to significantly reduce processing times and improve decisional accuracy for initial disability claims and hearings. Commissioner Barnhart outlined her vision of a new approach for improving the disability process in September 2003. This year will be a time for consultation with those involved at every stage of the process, both within and outside of SSA.

Commissioner Barnhart's Service Delivery Assessment to date is reflected in each of the four strategic goals of the Agency's Strategic Plan: service, stewardship, solvency and staff. To provide further context for decisions on needed improvements outlined in the Strategic Plan, SSA has developed a service delivery plan that identifies the workload production goals over five years to accomplish the Agency's strategic goals and objectives. SSA's budget is driven by the Commissioner's service delivery plan, which was recently updated based on current experience and resource availability, and the Agency's Strategic Plan. SSA's budget also supports the President's Management Agenda by emphasizing the President's five government-wide management reforms. We are proud that we received the highest rating possible, a green, for overall current status in financial management, as well as green for progress in all five categories.

The President's budget will allow us to keep up with our key service workloads, begin to reduce hearings backlogs, and process more continuing disability reviews. It is imperative that we keep up with our work since we are not only facing a record number of beneficiaries, but major new responsibilities in implementing the historic Medicare prescription drug law. The President's budget provides adequate resources for SSA to:

• Improve service to citizens by reducing overall disability processing times;
• Implement a new electronic disability process to provide faster and more efficient service;
• Continue aggressive efforts to reduce erroneous payments and collect related debt;
• Continue to improve productivity by at least 2 percent per year; and
• Expand secure, citizen-friendly online service options on http://www.socialsecurity.gov, available 24 hours a day.

The dedicated men and women of SSA will continue to do everything in their power to give the American people the service they expect and deserve. However, it is important to recognize that SSA is a workload-driven organization and, therefore, the number of people we have to "do the job" matters significantly. The President's budget will allow SSA to maintain its progress in improving service and efficiency, and meeting its long-term commitments to the millions of Americans who depend on our Agency.

SSA will play a substantial role in the implementation of Public Law 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 - specifically, the Medicare prescription drug benefit. SSA is committed to the successful implementation of the new law, which included $500 million for SSA's start-up costs in FY 2004 and FY 2005. The Agency will use these funds to prepare systems for implementation of the drug benefit and other program changes in 2005. SSA will help:

• Identify low-income beneficiaries for enrollment in the program;
• Make low-income subsidy determinations;
• Calculate Part B premiums for high-income beneficiaries; and
• Withhold premiums appropriate to beneficiaries' selected plans.

Public Law 108-173 also includes a provision stating that responsibility for conducting Medicare hearings must be transferred from SSA to the Department of Health and Human Services (HHS) sometime between July 1 and October 1, 2005. HHS has signed an agreement to reimburse SSA for the costs we will incur to continue to process Medicare appeals until the transfer occurs.

The Balanced Budget Act of 1997 (P.L. 105-33) authorizes SSA to increase the user fee SSA charges the States for administering SSI supplementation payments. For FY 2005, the fee will increase to an estimated $8.90 per supplemental payment, from $8.77 in FY 2004, based on the projected change in the June 2004 Consumer Price Index from the previous year. A portion of the funds generated by this user fee are available for SSA's administrative expenses through the LAE account, subject to appropriation action. The LAE request includes $121 million from SSI user fees in FY 2005.

SSA is engaged in an aggressive program to deter, detect, and investigate fraud, and to prosecute individuals or groups committing fraud. A strong OIG, working together with SSA employees in local offices, is the most effective means we have to control fraud and abuse in the programs we administer. To strengthen the OIG's capacity to accomplish its mission of protecting the integrity of SSA's programs, we have continued to increase the resources available to the OIG.

The FY 2005 budget increase of 4.5 percent to $92 million will enable OIG to continue to aggressively pursue anti fraud activities on a variety of fronts, including combating Social Security number misuse, disability fraud through Cooperative Disability Investigation Teams, and SSI fraud through the Fugitive Felon Project.

The SSN has become a vital aspect of American life and a link to homeland security. Its reliability is a key element in protecting against fraud and in protecting lives at home and abroad. In FY 2005, to further support the Administration's homeland security initiatives, OIG will continue to fund the SSN Integrity Protection Team. Beginning in FY 2004, this integrated team model will address issues of SSN misuse and provide assistance to SSA, Congress, the public, and other law enforcement while maintaining a primary focus on protecting SSA's program and Trust Fund integrity.