|
SOCIAL SECURITY ADMINISTRATION
THE
FISCAL YEAR 2006 BUDGET
PRESS RELEASE
The attached document
is based on the President's budget scheduled for delivery to the
Congress on February 7th, 2005, and should not be released until
10:00 AM that day.
SOCIAL SECURITY ADMINISTRATION
FY 2006 BUDGET
TABLE OF CONTENTS
Summary
The President's $586
billion budget for the Social Security Administration (SSA) reflects
the Administration's commitment to the programs that SSA administers.
These include Old-Age, Survivors and Disability Insurance (OASDI),
financed by Social Security trust funds, and Supplemental Security
Income (SSI), funded from general revenues. The budget request supports
the Agency's mission of promoting the economic security of the nation's
people.
At $586
billion in fiscal year (FY) 2006, total outlays for all SSA-administered
programs are projected to increase by nearly $25 billion, or 4.4
percent, from the FY 2005 estimate. This increase is attributable
primarily to annual cost-of-living adjustments of 2.7 percent in
January 2005 and an estimated 2.3 percent in January 2006, for both
the OASDI and SSI programs. Additionally, the number of individuals
receiving benefits from the OASDI and SSI programs continues to
increase.
The President's
budget proposes administrative resources of $9.523 billion, an increase
of 7.5 percent, which will allow SSA in FY 2006 to:
- Pay benefits
to more than 53 million people every month;
- Process more
than 8 million claims for benefits;
- Take applications
for and issue 17 million new and replacement Social Security cards
after obtaining and evaluating evidence of identity;
- Process 264
million earnings items to maintain workers' life-long earnings
records;
- Handle approximately
58 million transactions through SSA's 800-number; and
- Issue 140
million Social Security Statements to advise workers how much
they have contributed to Social Security and provide estimates
of future benefits.
SSA also plays
a major role in the new Medicare prescription drug program, withholding
the premiums for this program from beneficiaries' monthly Social
Security checks and determining eligibility of low-income individuals
for drug benefit subsidies. Further, SSA continues to provide service
delivery support to the Medicare, Medicaid, Railroad Retirement,
and Food Stamp programs.
SSA
SUMMARY |
|
(Outlays in millions,
including proposed legislation) |
| 2004
Actual
| 2005
Estimate
| 2006
Estimate
|
+/- |
Trust Fund Programs |
Old-Age and Survivors Insurance (OASI)
|
$417,309 |
$435,312 |
$454,419 |
+$19,107 |
Disability Insurance (DI)
|
$78,550 |
$84,439 |
$90,478 |
+$6,039 |
Proposed OASDI Legislation
|
- - - |
- - - |
-$10 |
- $10 |
Trust Fund Programs
|
$495,859 |
$519,751 |
$544,887 |
+$25,136 |
General Fund Programs |
SSI
|
$36,410 |
$41,869 |
$41,275 |
-$594 |
Special Benefits for Certain World War II Veterans
|
$10 |
$12 |
$11 |
- $1 |
Proposed SSI Legislation
|
- - - |
- - - |
+$23 |
+$23 |
Subtotal, General Fund Programs
|
$36,420 |
$41,881 |
$41,309 |
-$572 |
TOTAL, SSA
|
$532,279 |
$561,632 |
$586,196 |
+$24,564 |
Percentage Increase from FY 2005
|
+4.4% |
|
ADMINISTRATIVE
BUDGET
(Dollars in millions) |
Limitation on Admin. Expenses
|
$8,313 |
$8,733 |
$9,403 |
+$670 |
Office of the Inspector General (OIG)
|
$88 |
$90 |
$93 |
+$3 |
Research
|
$47 |
$35 |
$27 |
-$8 |
Total Administrative Budget
|
$8,448 |
$8,858 |
$9,523 |
+$665 |
Percentage Increase from FY 2005
|
+7.5% |
Medicare
Modernization Start-up
| +$54 |
+$446 |
- - - |
- - - |
TOTAL PROGRAM LEVEL
|
$8,502 |
$9,304 |
$9,523 |
+219 |
Percentage Increase from FY 2005
|
+2.4% |
TOTAL WORKYEARS
|
80,926 |
83,558 |
81,499 |
-2,059 |
Totals may not add due to rounding.
|
TRUST FUND PROGRAMS
Old-Age, Survivors and Disability Insurance (OASDI)
In FY 2006, OASDI outlays will increase by $25 billion, or 4.8
percent, over FY 2005. This increase is attributable primarily to
the annualized effect of the January 2005 2.7 percent cost-of-living
adjustment (COLA) and the effect of the estimated 2.3 percent COLA
payable beginning in January 2006. In addition, the number of individuals
receiving benefits under the Social Security programs is expected
to increase by 747,000. Combined OASDI Trust Fund income will grow
by about $38 billion in FY 2006 and will be nearly $719 billion
or roughly 132 percent of yearly outlays.
OASDI
OVERVIEW |
|
(Dollars in millions)
|
| 2004
Actual
| 2005
Estimate
| 2006
Estimate
|
+/- |
Outlays |
OASI Benefits
|
$411,157 |
$428,822 |
$447,891 |
+$19.069 |
DI Benefits
|
$76,212 |
$81,749 |
$87,608 |
+$5,859 |
Other 1
|
$8,490 |
$9,180 |
$9,398 |
+$218 |
TOTAL, Outlays (Current Law)
|
$495,859 |
$519,751 |
$544,897 |
+$25,146 |
Proposed
Legislation
| -
- - |
-
- - |
-$10 |
$10 |
TOTAL,
Outlays (Proposed Legislation)
| $495,859 |
$519,751 |
$544,887 |
+$25,136 |
Income |
OASI
|
$556,547 |
$586,290 |
$619,367 |
+$33,077 |
DI
|
$90,185 |
$94,432 |
$99,457 |
+$5.025 |
Total Income (Current Law)
|
$646,732 |
$680,722 |
$718,824 |
+$38,102 |
|
|
1 "Other" includes
administration, beneficiary services, payments to the Railroad
Retirement Board, and demonstration projects. |
OASDI Program Data
Social Security pays monthly cash benefits to retired and disabled
workers and their dependents, and to survivors of deceased workers.
Benefits are financed by payroll taxes paid by employees, employers,
and the self-employed, interest on the Trust Funds and income taxes
on higher income retirees.
The
table below provides information on Social Security beneficiaries,
benefit payments and the payroll tax.
OASDI
BENEFICIARY and BENEFITS OVERVIEW |
|
Fiscal Year
|
| 2004
Actual
| 2005
Estimate
| 2006
Estimate
|
+/- |
Average
Number of Beneficiaries |
|
|
|
|
OASI |
39,488 |
39,813 |
40,263 |
+450 |
DI |
7,696 |
8,005
|
8,302 |
+297
|
TOTAL, Beneficiaries (in thousands)
|
47,184 |
47,818 |
48,565 |
+747 |
Average
Monthly Benefit |
|
|
|
|
Retired Worker |
$919
|
$949
|
$978
|
+$30
|
Disabled Worker |
$857
|
$888
|
$917
|
+$29
|
|
Calendar Year
|
| 2004
| 2005
| 2006
| +/-
|
Projected
COLA Payable in January
|
2.1%
|
2.7%
|
2.3%
|
|
Taxable
wage base
(Maximum earnings recorded)
|
$87,900
|
$90,000
|
$93,000
|
+$3,000
|
FICA
tax rate
(Employers and employees each,
excluding 1.45% Hospital Insurance (HI) portion)
|
6.20%
|
6.20%
|
6.20%
|
-
- - |
SECA
tax rate
(Self-employed, excluding 2.9% HI portion)
|
12.40%
|
12.40%
|
12.40%
|
-
- - |
|
Totals may not
add due to rounding. |
Legislative Proposal Related to OASDI
The Administration has a proposal to require full-time attendance
at an educational institution as a condition of entitlement for
children's benefits beginning at age 16. This proposal recognizes
the importance of continuing education and changing the policy to
age 16 will further encourage eligible children to remain in school.
GENERAL FUND PROGRAMS
Supplemental Security Income
In FY 2006, SSI outlays will decrease by $594 million or 1.4 percent
from FY 2005. Estimates of current benefits are driven by the number
of recipients eligible for monthly payments and the amount of the
monthly payments. Even though the number of recipients will increase
by 199,000, the benefit payments will decrease because of the number
of monthly payments in FY 2005 compared to FY 2006. Monthly payments
will total 13 in FY 2005 and 12 in FY 2006. SSI monthly payments
are normally paid on the first of the month. However, when the first
of the month is on a weekend or holiday, the payment is made on
the preceding business day. The October 1, 2005 (Saturday) payment
will be paid on Friday, September 30, 2005. In addition, the October
1, 2006 (Sunday) payment will be made on Friday, September 29, 2006.
This will result in 13 SSI payments for FY 2005. FY 2004 had 12
monthly payments and FY 2006 will have 12 payments.
SSI
OVERVIEW |
|
(Dollars in millions)
|
Outlays
| 2004
Actual
| 2005
Estimate
| 2006
Estimate
|
+/- |
Federal Benefits 1
|
$33,748 |
$38,611 |
$38,203 |
-$408 |
Other 2
|
$2,662 |
$3,258 |
$3,072 |
-$186 |
TOTAL, SSI Outlays (Current Law)
|
$36,410 |
$41,869 |
$41,275 |
-$594 |
Proposed Legislation
|
--- |
--- |
+$23 |
+$23 |
TOTAL, Outlays
(Proposed Legislation)
|
$36,410 |
$41,869 |
$41,298 |
-$571 |
|
1The
number of monthly check payments is 12 in FY 2004, 13 in FY
2005, and 12 in FY 2006.
2"Other" includes vocational rehabilitation, research,
reimbursement to the trust funds for administrative costs,
and the difference between advances and reimbursements for
State supplementation across fiscal years. |
SSI Program Data
The SSI program provides benefits for low-income aged, blind, and
disabled individuals and couples, including blind and disabled children,
up to a maximum award called the standard benefit rate. Amounts
paid to recipients may be less than the standard benefit rate depending
on income (e.g., earnings and Social Security benefits) and living
arrangements (e.g., residence in one's own home, in the household
of another person, or in a nursing home that meets Medicaid standards).
The maximum monthly Federal benefit amount, adjusted for the 2.7
percent January 2005 COLA, is $579 for an individual and $869 for
a couple. This amount is projected to increase to $592 for an individual
and $889 for a couple when adjusted for the estimated 2.3 percent
COLA payable beginning in January 2006. States may choose to supplement
the Federal payment and have SSA administer these supplements.
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 SSA's
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.
SSI
BENEFICIARY AND BENEFITS OVERVIEW |
|
(Recipients
in thousands) |
| 2004
Actual
| 2005
Estimate
| 2006
Request
|
+/- |
Average Number of SSI Recipients |
Federal Payments: |
Aged
|
1,133 |
1,118 |
1,107 |
-11 |
Blind and Disabled
|
5,533 |
5,703 |
5,913 |
+210
|
Subtotal
|
6,666 |
6,821 |
7,020 |
+199 |
State Supplementary Payments
(with no Federal SSI payable)
|
288 |
294 |
299 |
+5 |
TOTAL, SSI Recipients (Current Law)
|
6,954 |
7,115 |
7,319 |
+204 |
Average Monthly Benefit |
Aged
|
$292 |
$302 |
$311 |
+$9 |
Blind and Disabled
|
$442 |
$458 |
$469 |
+$11 |
All SSI Recipients
|
$417 |
$432 |
$444 |
+$12 |
Projected
COLA Payable in January
|
2.1%
|
2.7%
|
2.3%
|
|
|
Legislative Proposals Related to SSI
The Administration has several proposals that will improve the
integrity of the SSI programs:
- Extend the pre-effectuation review
provisions already in place for Social Security disability claims
to SSI adult disability and blindness cases. By providing a review
of 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.
- The President's budget would also
allow refugees and asylees to receive SSI for 8 years after entry
into the country. Currently, refugees and asylees who have not
become citizens can only receive SSI for 7 years after entry.
The proposal recognizes that some individuals have been unable
to obtain citizenship within the 7-year time limit. The policy
would continue through 2008.
- Additional simplification proposals
affecting SSI eligible children would eliminate the requirement
for SSI dedicated accounts for children residing with natural
or adoptive parents and count most military compensation as earned
income.
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 depending on their incomes for each
month they subsequently reside outside the United States. (These
veterans are not eligible for SSI since individuals outside of the
United States are generally not eligible for SSI.) 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.
SPECIAL
BENEFITS FOR CERTAIN WWII VETERANS OVERVIEW |
|
(Outlays in millions)
|
2004
Actual
| 2005
Estimate
| 2006
Estimate
|
+/- |
Federal Benefits 1
|
$10 |
$11 |
$10 |
-$1 |
Administration
| * |
$1 |
$1 |
- - - |
TOTAL, Special Benefits for Certain World War II Veterans
|
$10 |
$12 |
$11 |
-$1 |
Average Number of Beneficiaries (in thousands)
|
3 |
3 |
3 |
- - - |
Average Monthly Benefit
|
$330 |
$330 |
$333 |
+$3 |
|
1
The number of monthly check payments is 12 in FY 2004, 13
in FY 2005, and 12 in FY 2006.
* Less than $500,000. |
LIMITATION
ON ADMINISTRATIVE EXPENSES |
|
(Dollars in millions) |
| 2004
Actual
| 2005
Estimate
| 2006
Request
|
+/- |
Program
Financing |
TOTAL,
LAE Appropriation (includes Medicare Modernization for FY 2006)
|
$8,313 |
$8,733 |
$9,403 |
+$670 |
Percentage Increase from FY 2005
|
+7.7% |
Medicare
Modernization Start Up (2 year funding for FYs 2004 and 2005)
1
| $54 |
$446 |
- - - |
- - - |
TOTAL
PROGRAM LEVEL
| $8,367 |
$9,179 |
$9,403 |
+$224 |
Percentage Increase from FY 2005
|
+2.4% |
|
FULL
TIME EQUIVALENTS AND WORKYEARS
| 2004
Actual
| 2005
Estimate
| 2006
Request
|
+/- |
SSA
FTEs (including OIG)
| 63,894 |
64,205 |
65,584 |
+1,379 |
SSA
Overtime
| 2,260 |
4,559 |
1,121 |
-3,438 |
DDS
Workyears
| 14,772 |
14,794 |
14,794 |
-
- - |
Total
SSA/DDS Workyears
|
80,926
|
83,558
|
81,499
|
-2,059
|
|
1 P.L.
108-173 provided a total of $500 million for SSA's role in the
implementation of Medicare modernization, available in FY 2004
and FY 2005. |
The Limitation on Administrative Expenses (LAE) account provides
resources for SSA to administer the OASDI programs, the SSI program,
certain health insurance and Medicare prescription drug functions,
and the Special Benefits for Certain World War II Veterans program.
Funding for this account is initially financed from the Social Security
and Medicare trust funds. The trust funds are subsequently reimbursed
for the administrative expenses of the SSI program, which are covered
by general funds, as well as for other costs not related to the
trust funds. Funds are included for personnel costs and operating
expenses such as equipment, space and building services.
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
(SSN) and posting annual earnings to workers' records; operating
a nationwide 800-number; operating and improving SSA's automated
data processing and telecommunications systems, and determining
eligibility of low-income seniors for drug benefit subsidies.
SSA's administrative expenses, which are less than 2 percent of
total outlays, continue to be a very small portion of the Agency's
overall spending. SSA's LAE budget is driven by the Commissioner's
Service Delivery Plan and the President's Management Agenda (PMA)
focus on relating resources to results. The budget projects the
amount of work we plan to do and the number of people we need to
do it with a focus on continuing efforts to improve service, efficiency,
and program integrity. This budget request supports our efforts
to operate at a high level of efficiency and provide responsive
service.
The President's budget request provides adequate resources for
SSA to:
- Implement an electronic disability
claims process;
- Continue to ensure the integrity of
SSA programs;
- Help administer the Medicare prescription
drug plan;
- Continue to increase SSA's overall
productivity; and
- Continue progress in achieving the
Commissioner's service delivery goals in the face of growing workloads.
Under the Medicare Modernization Act,
SSA will administer the new Medicare prescription drug program by
identifying low-income beneficiaries who might be eligible for a
drug benefit subsidy, making low-income subsidy determinations,
and withholding premiums appropriate to beneficiaries' selected
plans. SSA will also calculate Part B premiums for high-income beneficiaries.
In 2003, Congress provided funding for SSA's initial implementation
of the Medicare Modernization Act in FY 2004 and FY 2005. However,
our responsibilities extend into FY 2006 and beyond. This budget
request includes resources to meet our ongoing obligations.
The Service
Delivery Plan provides a context for decisions on needed improvements
in service and stewardship to meet our goals. One of SSA's highest
priorities is to improve service to the public in the disability
programs from the initial claim through the final administrative
appeal. In January 2004, SSA began implementation of eDib, a major
new initiative which replaces its paper-driven disability claims
process with a more efficient electronic business process through
the use of an electronic disability folder. SSA has implemented
the electronic disability process in 30 States and Puerto Rico,
and plans to complete implementation in FY 2006. This initiative
will reduce processing times significantly over the long term and
reduce costs related to locating, mailing, and storing paper files.
In FY 2006,
SSA will keep up with processing initial disability claims even
while implementing eDib. SSA will address hearing backlogs by continuing
to provide resources and continuing to improve productivity resulting
in more cases processed. Simultaneously, 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 and continues her consultation
with those involved at every stage of the process, both within and
outside of SSA.
SSA's mission
demands a balance between commitment to service and the obligation
to be good stewards of the programs it administers. This budget
supports SSA's efforts to improve payment accuracy through a broad
range of activities designed to prevent and detect improper payments.
The President's budget proposes dedicated administrative funding
to ensure continuation of cost-effective continuing disability reviews.
SSA has generated government-wide savings of approximately $10 for
each $1 spent on these activities.
SSA's budget
supports the PMA by emphasizing the President's government-wide
management reforms as well as his program management reforms. SSA
has achieved a green status, the highest rating possible, on four
out of five PMA initiatives.
SSA's budget and plans also reflect assessments using the Program
Assessment Rating Tool recommendations to achieve greater results
and to address performance, management and efficiency challenges.
The Social
Security Administration faces great challenges: giving the American
people the service they expect and deserve; improving program integrity
through sound fiscal stewardship; and maintaining the quality staff
SSA needs to meet these goals. With adequate planning and resources,
SSA can, and will, meet these challenges.
OFFICE
OF THE INSPECTOR GENERAL |
|
(Dollars in millions)
|
| 2004
Actual
| 2005
Estimate
| 2006
Request
|
+/- |
TOTAL, OIG Budget Authority (Current Law)
|
$88 |
$90 |
$93 |
+$3 |
Percentage Increase from FY 2005
|
+3% |
Workyears
|
598 |
625 |
625 |
- - - |
|
Summary
The Office of the Inspector General (OIG) is charged with protecting
the integrity of SSA's programs as well as promoting their economy,
efficiency, and effectiveness. OIG uses a combination of audits,
investigations, and inspections to investigate and prosecute fraud,
waste, and abuse in SSA's programs and operations.
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 OIG's capacity to accomplish
its mission of protecting the integrity of SSA's programs, we have
requested an increase in the resources available to OIG.
The FY 2006 budget increase of 3 percent to $93 million will enable
OIG to continue to aggressively pursue anti-fraud activities on
a variety of fronts, including combating SSN misuse, disability
fraud through Cooperative Disability Investigation Teams, and OASDI
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
2006, to further support the Administration's homeland security
initiatives, OIG will continue to fund the SSN Integrity Protection
Team. This integrated team model will address issues of SSN misuse
and provide assistance to SSA, Congress, the public, and other law
enforcement agencies while maintaining a primary focus on protecting
SSA's program and trust fund integrity.
| |