Social Security Administration (SSA):
Budget Issues
Scott D. Szymendera
Analyst in Disability Policy
March 19, 2013
Congressional Research Service
7-5700
www.crs.govSeptember 8, 2014
The House Ways and Means Committee is making available this version of this Congressional Research Service
(CRS) report, with the cover date shown, for inclusion in its 2014 Green Book website. CRS works exclusively
for the United States Congress, providing policy and legal analysis to Committees and Members of both the
House and Senate, regardless of party affiliation.
Congressional Research Service
R41716
CRS Report for Congress
Prepared for Members and Committees of Congress
Social Security Administration (SSA): Budget Issues
Summary
The Social Security Administration (SSA) administers the Old Age and Survivors Insurance
(OASI), Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and
Special Benefits for Certain World War II Veterans programs that affect the lives of nearly every
American family. These programs pay out more than $800900 billion in annual federal benefits.
Program benefit costs are considered mandatory spending not subject to annual appropriations.
The SSA requires annual discretionary appropriations to administer these programs and to
provide support to the Medicare and Medicaid programs. The President’s FY2013FY2015 budget request
for SSA administrative expenses, referred to as the limitation on administrative expenses (LAE)
account, is $11.812.0 billion.
This report provides an overview of the SSA’s mandatory spending but largely focuses on
discretionary appropriations for the agency’s administrative expenses. The size of the annual
appropriations for administrative expenses affects the agency’s ability to effectively administer
the SSA’s benefit programs as well as conduct program integrity activities designed to ensure that
only eligible persons receive federal benefits.
The agency has made progress in recent years in reducing the backlog of pending disability cases
and reversing the trend in declining program integrity activities. However, the SSA rarely
receives administrative funding equal to the President’s request or its own independent budget
request. These LAE appropriations that are below the requested levels may make it difficult for
the SSA to build on this progress.
For FY2012, the total SSA LAE appropriation was $11.4 billion, taking into account the 0.189%
across-the-board rescission. Funding for FY2013 is currently provided via a continuing resolution
that expires on March 27, 2013.
The Budget Control Act of 2011, P.L. 112-25, which caps discretionary spending and increases
the federal government’s statutory debt limit, includes a provision to adjust the discretionary
spending caps to permit additional appropriations to the SSA for program integrity activities. This
legislation also provides for the reduction of SSA administrative funds under sequestration
process. Under sequestration, the FY2013 SSA LAE funding will be reduced by approximately
3.35%.
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Social Security Administration (SSA): Budget Issues
Contents
Social Security Administration Programs ........................................................................................ 1
Old-Age and Survivors Insurance ............................................................................................. 1
Social Security Disability Insurance. ......................................................................................... 2
Supplemental Security Income .................................................................................................. 2
Special Benefits for Certain World War II Veterans .................................................................. 3
Social Security Administration Budget Request .............................................................................. 4
President’s Budget Request ....................................................................................................... 4
A. Payments to the Social Security Trust Funds ...................................................................... 4
Payments not Subject to Annual Appropriations .......................................................... 4
Payments Subject to Annual Appropriations. ................................................................ 4
B. SSI Program ........................................................................................................................ 5
Administrative and Other Expenses .............................................................................. 5
C. 5
Office of the Inspector General ........................................................................................... 6
6
D. Limitation on Administrative Expenses ......................................................................... 6
Processing Social Security and SSI Claims and Hearings ............................................ 76
Program Integrity Activities .......................................................................................... 9 7
User Fees ...................................................................................................................... 108
Research and Demonstrations ....................................................................................... 108
Carryover ...................................................................................................................... 8 11
SSA Commissioner’s Budget .................................................................................................. 11
FY2012 Administrative Funding ................................................................................................... 12
FY2013 Administrative Funding ................................................................................................... 13
Sequestration of SSA Administrative Funds ........................................................................... 13
SSA Program Integrity Funding Provisions in the Budget Control Act of 2011 ........................... 14
Figures
Figure 1. Projected Spending on SSA Programs ............................................................................. 3
Figure 2. SSA Total LAE Budget Authority .................................................................................... 7
Figure 3. New Claims for Social Security and SSI Benefits ........................................................... 8
Figure 4. SSA Hearings Pending at the End of Each Fiscal Year .................................................... 9
Figure 5. SSA Program Integrity Activities ................................................................................... 11
Figure 6. SSA Administrative Budget Requests and Appropriations............................................. 12
Contacts
Author Contact Information........................................................................................................... 14
SSA Commissioner’s Budget .................................................................................................... 8
Figures
Figure 1. Projected Spending on SSA Programs ............................................................................. 3
Figure 2. SSA Total LAE Budget Authority .................................................................................... 7
Figure 3. SSA Administrative Budget Requests and Appropriations .............................................. 9
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Social Security Administration (SSA): Budget Issues
Social Security Administration Programs
The programs administered by the Social Security Administration (SSA) touch the lives of nearly
every American family and are key components of the nation’s economic safety net for the aged
and disabled. In FY2013FY2015, the SSA projects total spending of $884963 billion on program benefits and
administrative costs,1 with the majority of this spending for benefits and administration of the OldAge
Old-Age and Survivors Insurance (OASI) program. The SSA also administers the Social Security
Disability Insurance (SSDI) and Supplemental Security Income (SSI) programs and provides
Special Benefits to Certain World War II Veterans.
The President’s budget request for total administrative expenses for the SSA for FY2013 is $11.9FY2015 is $12.4
billion.12 The total appropriation for SSA administrative expenses in FY2012 was $11.6 billion.2
Funding for FY2013 is currently provided via a continuing resolution that expires on March 27,
2013FY2014 was $12.0 billion.
Spending on benefit payments for the SSA’s programs is considered mandatory spending.
Spending for the cost of administering these programs, as well as providing for other
administrative responsibilities of the SSA, is considered discretionary spending.3
Old-Age and Survivors Insurance
The Old-Age and Survivors Insurance (OASI)
FY2013 OASI Projections4
program is the largest program administered
Average monthly beneficiaries: 46.7 million
by the SSA. OASI provides cash benefits to
Benefit outlays: $672 billion
insured workers upon retirement and to their
Administrative and other costs: $7.1 billion5
spouses, dependents, and survivors. Workers
Total program spending: $679.1 billion
are insured for OASI by working at jobs
covered by the Social Security system and
paying payroll taxes that finance FY2015 OASI Projections4
The OASI program is the largest program
administered by the SSA. OASI provides cash
Average number of beneficiaries: 49.2 million
benefits to insured workers upon retirement
Benefit outlays: $744.1 billion
and to their spouses, dependents, and
Administrative and other costs: $7.5 billion5
survivors. Workers are insured for OASI by
working at jobs covered by the Social Security Total program spending: $751.7 billion
system and paying payroll taxes that finance
benefits. OASI benefits and administrative costs are paid out of
the federal OASI trust fund.
1
Includes the request for the Office of the Inspector General (OIG).
Includes appropriations for the OIG and the mandatory 0.189% rescission applied to discretionary funding by P.L.
112-74 the federal OASI trust fund.
1
Excludes projected spending on administrative costs related to the replacement of the National Computer Center
provided for in the American Recovery and Reinvestment Act of 2009, P.L. 111-5, as well as costs associated with
legislative initiatives proposed in the FY2015 Budget.
2
Includes the request for the Office of the Inspector General (OIG), research, and other planned obligations.
3
For additional information on mandatory and discretionary spending in the federal budget, see CRS Report RL33074,
Mandatory Spending Since 1962, by D. Andrew Austin and Mindy R. Levit and CRS Report RL34424, Trends in
Mindy R. Levit and D. Andrew Austin, and CRS Report RL34424, The Budget
Control Act and Trends in Discretionary Spending, by D. Andrew Austin and Mindy R. Levit.
4
Social Security Administration, FY2013FY2015 President’s Budget: Key Tables, February 2012March 2014, Tables 3-5,
http://www.ssa.gov/
budget/2013KeyTablesFY15Files/2015KT.pdf; hereafter cited as SSA, FY2013FY2015 Key Tables.
5
Includes administrative expenses, payments to vocational rehabilitation and Ticket to Work providers, demonstration
demonstration projects, payments to the Railroad Retirement Board, and the
quinquennial adjustment for military wage credits.
2
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Social Security Disability Insurance
The Social Security Disability Insurance
FY2013 SSDI Projections6
(SSDI) program pays cash benefits to insured
Average monthly beneficiaries: 11.1 million
workers unable to work because of significant
Benefit outlays: $142.8 billion
long-term disabilities.8 The spouses,
Administrative and other costs: $3.8 billion7
dependents, and survivors of disabled workers
are also eligible for benefits. SSDI benefits
Total program spending: $146.6 billion
continue until the disabled worker dies,
returns to work, or reaches full SSDI program pays cash benefits to
FY2015 SSDI Projections6
insured workers unable to work because of
Average number of beneficiaries: 11.1 million
significant long-term disabilities.8 The
Benefit outlays: $146.8 billion
spouses, dependents, and survivors of disabled
Administrative and other costs: $4.0 billion7
workers are also eligible for benefits. SSDI
benefits continue until the disabled worker
Total program spending: $150.8 billion
dies, returns to work, or reaches full
retirement age, at which point he or she transitions to the OASI
program. SSDI benefits and
administrative costs are paid out of the federal Disability Insurance
(DI) trust fund.
Supplemental Security Income
FY2013 SSI Projections9
The Supplemental Security Income (SSI)
program pays cash benefits to low-income
Average monthly federal recipients: 8.2 million
aged, blind, and disabled persons, regardless
Federal benefit outlays: $54.2 billion
of their Social Security insured status.12
Federal administrative and other costs: $4 billion10
Disabled children are eligible for SSI. To be
Total federal program spending: $58.2 billion11
eligible for SSI, a person must have limited
income and assets. SSI benefits are reduced by
other countable income meaning that SSI is often a program of last resort for low-income aged,
blind, and disabled persons. SSI The SSI program pays cash benefits to lowFY2015 SSI Projections9
income aged, blind, and disabled persons,
Average number of federal recipients: 8.3 million
regardless of their Social Security insured
Federal benefit outlays: $56.2 billion
status.12 Disabled children are eligible for SSI.
Federal administrative and other costs: $4.5 billion10
To be eligible for SSI, a person must have
Total federal program spending: $60.7 billion11
limited income and assets. SSI benefits are
reduced by other countable income meaning
that SSI is often a program of last resort for low-income aged, blind, and disabled persons. SSI
benefits and administrative costs are paid out of general revenue.
6
SSA, FY2013FY2015 Key Tables, Tables 3-5.
Includes administrative expenses, payments to vocational rehabilitation and Ticket to Work providers, demonstration
projects, payments to the Railroad Retirement Board, and the quinquennial adjustment for military wage credits.
8
For additional information on the SSDI program, see CRS Report RL32279, Primer on Disability Benefits: Social
Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), by Umar Moulta-Ali.
9
SSA, FY2013William R. Morton.
9
SSA, FY2015 Key Tables, Tables 6-7.
10
Includes administrative expenses, payments to vocational rehabilitation and Ticket to Work providers, and research
expenses.
11
Total projected SSI program spending does not include the fees paid by 10 states and the District of Columbia to the
SSA to administer their state SSI supplement programs.
12
For additional information on the SSI program, see CRS Report RL32279, Primer on Disability Benefits: Social
Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).
7
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Figure 1. Projected Spending on SSA Programs
FY2012FY2015
Source: Social Security Administration, FY2013FY2015 President’s Budget: Key Tables, February 2012March 2014, Table 3,
http://www.ssa.gov/budget/2013KeyTablesFY15Files/2015KT.pdf.
Notes: OASI: Old-Age and Survivors Insurance; SSDI: Social Security Disability Insurance; SSI: Supplemental
Security Income; WWII Vets: Special Benefits for Certain World War II Veterans. Special Benefits for Certain
World II Veterans make-up significantly less than 1% of projected SSA program spending.
Special Benefits for Certain World War II Veterans
The SSA pays Special Benefits to Certain
FY2013FY2015 Special Benefits for Certain
World War II Veterans to low-income World
WWII Veterans Projections13
War II veterans who are living outside of the
Average monthlynumber of beneficiaries: 1,000
United States.15 Established in 1999, this
Benefit outlays: $64 million
program is designed to provide a minimum
Administrative and other costs: $1 million14million 14
cash benefit to two groups: low-income
American veterans; and low-income veterans
Total program spending: $75 million
of the Filipino armed forces that fought
alongside the American military during World War II. Beneficiaries must currently live outside of
the United States, and usually live in the Philippines. The cost of these benefits and their related
administrative costs are paid out of general revenue.
13
SSA, FY2013FY2015 Key Tables, Table 8.
Includes program administrative costs only.
15
For additional information on Special Benefits for Certain World War II Veterans, see CRS Report RL33876,
Overview of Filipino Veterans’ Benefits, by Christine Scott, Sidath Viranga Panangala, and Carol D. Davis.
14
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Social Security Administration Budget Request
President’s Budget Request
The President’s budget request to Congress for the SSA currently consists of four accounts:
payments to the Social Security trust funds, the SSI program, the Office of the Inspector General
(OIG), and limitation on administrative expenses (LAE).
A. Payments to the Social Security Trust Funds
This account is designed to reimburse the OASI and DI trust funds for the costs of certain
activities payable by general revenue. This account consists of payments permanently and
indefinitely authorized and thus not subject to annual appropriations, and payments subject to
annual appropriations.
Payments not Subject to Annual Appropriations
For FY2013FY2015, the President’s budget projects $32.50 billion in payments not subject to annual
appropriations.16 Of this Nearly this entire amount, $85831.7 billion, is from the taxation of Social Security
benefits. In addition, $44 million is the projected reimbursement to the OASI and DI
trust funds
from general revenue to account for the reduction in the Social Security payroll tax
rate from
6.2% to 4.2% in calendar year 2011 and part of calendar year 2012.17 In addition, $31.5
billion is from the taxation of Social Security benefits. The remaining amounts are from
from reimbursement for union administrative expenses, Social Security payroll tax credits, and
payments related to changes in the reporting of self-employment income.18
Payments Subject to Annual Appropriations
For FY2013, the President’s budget requests $2016.4 million in payments to the Social Security
trust funds subject to annual appropriations.19 Of this request, $1410.0 million is for interest earned
on benefit checks that remain uncashed for at least six months and $6.4 million is for
administrative costs related to the 1974 pension reform legislation.20 An additional $4,000 is
16
The President’s budget does
16
Social Security Administration, Justifications of Estimates for Appropriations Committees, Fiscal Year 2013,
February 2012, p. 202015, March
2014, p. 28, http://www.ssa.gov/budget/2013FullJustification2015FullJustification.pdf; hereafter cited as SSA, FY2013FY2015 Budget
Justification.
17
Title VI, Section 601 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010,
P.L. 111-312, reduced the Social Security payroll tax rate paid by employees in calendar year 2011 from 6.2% to 4.2%
and required the OASI and DI trust funds to be reimbursed for revenue lost from general revenue. The Temporary
Payroll Tax Cut Continuation Act of 2011, P.L. 112-78, extended the payroll tax reduction through February 29, 2012,
and the Middle Class Tax Relief and Job Creation Act of 2012, P.L. 112-96, extended the payroll tax reduction through
the end of calendar year 2012. Because P.L. 112-96 was enacted after the submission of the President’s FY2013
budget, the projected payments to the Social Security trust funds not subject to annual appropriations do not take into
account a reduced payroll tax rate beyond February 29, 2012.
18
The Food, Conservation, and Energy Act of 2008, P.L. 110-234, made changes to the reporting of self-employment
income. Section 15361 of this act is a mandatory appropriation to reimburse the OASI and DI trust funds for revenue
lost because of these changes in FY2009 through FY2017. The estimate for FY2013FY2015 is $8 million.
19
SSA, FY2013FY2015 Budget Justification, p. 1917.
20
Section 1131 of the Social Security Act (42 U.S.C. §1320b-1) as established by the Employee Retirement Income
(continued...)
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requested for the costs related to the one remaining person receiving a special payment for certain
uninsured persons (known as a Prouty benefit) subject to reimbursement.21 The President’s budget
does Security Act of 1974, P.L. 93-406, requires the SSA to furnish certain information on deferred vested pension rights to
pension plan participants and their dependents and survivors. The cost of this activity is initially paid from the OASI
trust fund and reimbursed from general revenue through an annual appropriation.
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not request an appropriation for the two remaining activities subject to annual appropriation:
administrative costs associated with coal industry retiree health benefits and reimbursement for
pre-1957 military wage credits.22
B. 21
SSI Program
The costs of SSI benefits and administration of the SSI program are paid out of general revenue
and appropriated to the SSA in this account. This account contains three components. First, there
is an appropriation for benefit and administration costs for the given fiscal year. This component
is described in additional detail below. Second, there is a mandatory appropriation of “such sums
as may be necessary” for any benefit costs incurred after June 15 and any unanticipated costs
associated with the SSI program. Third, there is an advance appropriation for benefit costs for the
first quarter of the succeeding fiscal year. Funds appropriated for the SSI program remain
available to the SSA until expended. The President’s FY2013FY2015 budget requests $40.9 billion for
current fiscal year program costs and $19.32 billion for SSI benefits in the first quarter of
FY2013.23 FY2016.
Total federal benefit payments in FY2013FY2015 are estimated to cost $5456.2 billion, with
$18.2 $19.7 billion
coming from the FY2013FY2015 advance appropriation.24 22
Administrative and Other Expenses
In addition to providing for the cost of SSI benefits, the appropriation for the SSI program also
provides for administrative expenses relating to the SSI program, beneficiary services, and costs
related to research and demonstration projects. The FY2013FY2015 President’s budget request for these
administrative and other expenses is $4.4 billion.
Administrative expenses for the SSI program are initially paid from the OASI and DI trust funds
and are appropriated to the LAE account. The appropriation to the SSI program account for
administrative expenses is used to reimburse the trust funds from general revenue for these costs.
Administrative expenses for the SSI program include costs related to initial disability
determinations, disability hearings and appeals, and program integrity activities. The FY2013FY2015
President’s budget request for administrative expenses is just under $4.3 billion.
The SSI program appropriation also funds beneficiary services, research, and Medicare outreach.
Beneficiary services include payments to state vocational rehabilitation agencies and Ticket to
Work employment networks for services provided to SSI recipients. The FY2015 President’s
budget requests $70 million for beneficiary services, $53 million for Title XVI research and
demonstration projects, and an additional $1 million for costs associated with the Department of
State’s discretionary change to the Special Immigrant Visa rules for Afghans, which may affect
the eligibility of some immigrants for SSI benefits.23
21
The SSA has determined that appropriations are not needed in FY2015 for these activities. Costs billion.
(...continued)
Security Act of 1974, P.L. 93-406, requires the SSA to furnish certain information on deferred vested pension rights to
pension plan participants and their dependents and survivors. The cost of this activity is initially paid from the OASI
trust fund and reimbursed from general revenue through an annual appropriation.
21
Section 228 of the Social Security Act (42 U.S.C. §428), as established by the Tax Adjustment Act of 1966, P.L. 89368, authorizes special benefits to persons aged 72 and over who, because of their ages, could not have worked long
enough to qualify for Social Security benefits. Benefit and administrative costs for persons who reached the age of 72
before 1968 are paid by the OASI trust fund and reimbursed from general revenue through appropriation. There is
currently one such recipient.
22
The SSA has determined that appropriations are not needed in FY2012 for these activities. Cost associated with coal
industry retiree health benefits will be paid from unobligated prior appropriations and pre-1957 military wage credits
will be financed from scheduled transfers from the trust funds not subject to appropriation.
2322
SSA, FY2013FY2015 Budget Justification, pp. 27-28.
24
Ibid., p. 42p. 42.
23
Ibid.
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The SSI program appropriation also funds beneficiary services, research, and Medicare outreach.
Beneficiary services include payments to state vocational rehabilitation agencies and Ticket to
Work employment networks for services provided to SSI recipients. The FY2013 President’s
budget does not request funding for beneficiary services. The President’s FY2013 budget request
for Title XVI research and demonstration projects and Medicare outreach is $48 million.25
C. Office of the Inspector General
The SSA Office of the Inspector General (OIG)Office of the Inspector General
The SSA OIG investigates fraud, waste, and abuse within
programs administered by the SSA and
audits such programs to determine their effectiveness and
efficiency. The OIG also investigates
improper receipt of federal benefits; certain crimes
committed by SSA employees, contractors,
and program beneficiaries; and supports larger
government-wide homeland security efforts. The
President’s FY2013FY2015 budget request for the OIG
is $107104.6 million, of which $3029 million is from
general revenue and $7775.6 million is from the
OASI and DI trust funds as authorized by Section
201(g)(1) of the Social Security Act26Act24 for costs
associated with the OASI and DI programs.27
D. 25
Limitation on Administrative Expenses
The appropriation for the limitation on administrative expenses (LAE)LAE account funds the SSA’s
administrative costs associated with the
OASI, SSDI, and SSI programs as well as costs incurred
by the SSA to support the Medicare and
Medicaid programs. This account also funds
administrative functions, such as the operations of
SSA field offices, employment verification,
agency information technology activities, and the
Social Security Advisory Board.
The LAE account is discretionary and subject to annual appropriation. The funds that make up
this account come from the OASI and DI trust funds, the Medicare trust funds, general revenue,
and certain fees collected by the SSA, with funds from the Social Security trust funds making-up
half of the LAE budget authority. Thus, unlike a traditional appropriation in which Congress
provides money from the Treasury to an agency, the LAE appropriation is actually a limitation on
the amount of money from these various sources that the SSA can spend on its administrative
activities. Figure 2 provides the breakdown of budget authority for the LAE account in the
President’s FY2013FY2015 budget request.
The FY2013FY2015 President’s budget request for SSA’s LAE account is $11.812.0 billion.2826 This total
appropriation consists of the base LAE appropriation, additional appropriations for program
integrity activities, and appropriations for LAE activities from user fees paid to the SSA. The
base LAE appropriation is the general appropriation for the SSA’s administrative expenses. The
President’s FY2013FY2015 budget request for the base LAE account is $10.6 billion.
25
Sections 1110 and 1115 of the Social Security Act (42 U.S.C. §§1310 and 1315) authorize the SSA to conduct
research and demonstration projects relating to the SSI and Medicaid programs. Section 1144 of the Social Security Act
(42 U.S.C. §1320b-14) requires the SSA to conduct certain outreach activities on behalf of the Medicare program
including identifying Medicare beneficiaries who may be eligible for Medicaid or prescription drug subsidies under
Medicare Part D.
26
5 billion.
24
42 U.S.C. §401(g).
27
SSA, FY2013SSA, FY2015 Budget Justification, p. 143.
28164.
26
Ibid., pp. 94-96.98-99.
25
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Figure 2. SSA Total LAE Budget Authority
FY2013FY2015 President’s Budget Request
Source: Social Security Administration, Justifications of Estimates for Appropriations Committees, Fiscal Year 2013,
February 20122015,
March 2014, p. 115, http://www.ssa.gov/budget/2013FullJustification.pdf.
Note: “OASI and DI Trust Funds” includes administrative costs for Special Benefits for Certain World War II
Veterans.
Processing Social Security and SSI Claims and Hearings
The amount of the LAE appropriation affects the SSA’s ability to process initial claims for OASI
and SSDI benefits and applications to the SSI program. As shown in Figure 3, there were
significant increases in new claims for SSDI and SSI benefits between FY2008 and FY2009,
likely caused by worsening overall economic conditions and rising levels of unemployment.29
These increases continued, but at a lower rate from FY2009 to FY2010. Because the
administrative costs associated with disability claims are higher than those associated with OASI
claims, the increase in SSDI and SSI claims places an increased burden on the administrative
resources of the SSA.30
29
For a more complete discussion on the economic and other factors that affect the growth in disability applications see
Kalman Rupp and David Stapleton, “Determinants of the Growth in the Social Security Administration’s Disability
Programs-An Overview,” Social Security Bulletin, vol. 58, no. 4 (Winter 1995), pp. 43-70; and David H. Autor and
Mark G. Duggan, “The Rise in the Disability Rolls and the Decline in Unemployment,” Quarterly Journal of
Economics, vol. 18, no. 1 (February 2003), pp. 157-205.
30
SSA, FY2013 Key Tables, Table 9. Administrative expenses equal 2.1% of SSDI and 7% of SSI benefits, and 0.4%
of OASI benefits.
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Figure 3. New Claims for Social Security and SSI Benefits
FY1999 to FY2011
Source: Congressional Research Service (CRS) with data from Social Security Administration, Annual Statistical
Supplement to the Social Security Bulletin, 2000 Washington, DC, February 2001, Section 2.F, and subsequent
editions.
Approximately 66% of all new claims for SSDI and SSI benefits are initially denied and more
than one-third of denied claimants request an appeals hearing before an SSA administrative law
judge (ALJ).31 For much of the past decade until FY2008, the SSA had seen an increase in the
number of pending hearings. Starting in FY2008, however, the number of hearings pending at the
end of each fiscal year began to drop. At the end of FY2010, there were 705,367 hearings
pending, and the average processing time for hearing requests was down to 390 days from a peak
of 532 days in August 2008.32 However, due to an increase in the number of hearing requests, the
number of pending hearings increased to 787,000 in FY2011.33 In recent years, the SSA has hired
additional ALJs and support staff and made other administrative changes that have reduced the
number of pending hearings, reduced the processing time for hearings, and eliminated nearly all
cases with hearing requests that have been pending for more than 750 days.34 In its FY2012
budget request, the SSA reported that it was on track to “eliminate the hearings backlog” by
reducing the backlog of hearings to below 500,000 by FY2013.35 However, the FY2013 budget
request projects 544,000 pending hearings at the end of FY2013 and states that, contingent of
31
SSA, FY2013 Budget Justification, p. 140.
Social Security Administration, Performance and Accountability Report, Fiscal Year 2010, November 2010, pp. 5051, http://www.ssa.gov/finance/2010/Full%20FY%202010%20PAR.pdf; hereafter cited as SSA, FY2010 Performance
Report; and Social Security Administration, Justifications of Estimates for Appropriations Committees, Fiscal Year
2012, February 2011, p. 12, http://www.ssa.gov/budget/2013FullJustification.pdf; hereafter cited as SSA, FY2012
Budget Justification.
33
SSA, FY2013 Budget Justification, p. 4.
34
Ibid., p. 11.
35
SSA, FY2012 Budget Justification, pp. 12-13.
32
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appropriate levels of funding, the agency appears to be on track to meet its new goal of 525,000
pending hearings at the end of FY2014.36
Figure 4. SSA Hearings Pending at the End of Each Fiscal Year
FY1999 to FY2011
Source: Congressional Research Service (CRS) with data from Social Security Administration, Annual Statistical
Supplement to the Social Security Bulletin, 2000 Washington, DC, February 2001, Section 2.F, and subsequent
editions.
Note: Includes hearings for all programs administered by the SSA.
2015FullJustification.pdf.
Note: “OASI and DI Trust Funds” includes administrative costs for Special Benefits for Certain World War II
Veterans.
Program Integrity Activities
The FY2013FY2015 President’s budget requests $1.4 billion for costs associated with conducting
continuing disability reviews (CDRs) and SSI redeterminations.3727 CDRs are periodic reviews of
SSDI beneficiaries and SSI recipients to determine if they still meet the statutory definition of
disability. In the majority of cases, a CDR mailer that does not involve a medical review is used
instead of a full medical CDR. SSI redeterminations are used to determine if SSI recipients
continue to fall below the program’s income and asset limits.
Under the provisions of Section 101 of the Budget Control Act of 2011, P.L. 112-25, the annual
discretionary funding caps created by the act are to be adjusted by the amount by which funds
appropriated to the SSA for CDRs and SSI redeterminations for a fiscal year exceed $273 million.
The maximum adjustment for SSA program integrity activities will rise from $623 million for
FY2012 to $1.309 billion a year for FY2017 through FY2021, with a maximum adjustment of
$751 million1.123 billion permitted for FY2013FY2015. Thus, the President’s budget request of $1.024 billion for
36
37
SSA, FY2013 Budget Justification, pp. 4 and 150.
Ibid., pp. 94-96.
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396 billion for
program integrity activities for FY2013 includes the maximum base amount of $273 million and
the full cap adjustment of $751 million.
The SSA estimates that every $1 spent on CDRs saves approximately $9 in lifetime program
costs, including savings to the Medicare and Medicaid programs. In addition, the agency
estimates that every $1 spent on SSI redeterminations saves $6 in program costs over 10 years,
including savings to the Medicaid program.38 However, because LAE appropriations are made
annually and their costs are applied to each fiscal year’s annual budget, the long-term savings
from these program integrity activities does not fully offset their costs in the fiscal year of the
appropriation. As a result, the SSA has not traditionally been able to secure enough funding each
year to gain the maximum potential program savings from CDRs and SSI redeterminations.
However, as shown in Figure 5, since FY2007, the number of medical CDRs, total CDRs, and
SSI redeterminations has generally increased, reducing an overall downward trend in CDRs and
redeterminations that lasted for much of the period since the early 2000s. However, the increase
in total CDR’s in FY2011 was largely due to an increase in CDR mailers rather than the more
comprehensive medical CDRs. The total number of CDRs was essentially unchanged from
FY2011 to FY2012.
User Fees
The FY2013 President’s budget request includes $171FY2015 includes the maximum base amount of $273 million and
the full cap adjustment of $1.123 billion.
27
Ibid.
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User Fees
The FY2015 President’s budget request includes $125 million in LAE appropriations from two
user fees collected by the SSA with $170124 million from fees collected from states for the
administration of their SSI supplement programs.3928 An additional $1 million is requested from
fees paid by non-attorney representatives for certification to represent claimants before the SSA.
Research and Demonstrations
The FY2013FY2015 President’s budget request also includes $4853 million for research and demonstration
projects.29 While this request is not part of the formal requested LAE language, it is a component of
the SSA’s total administrative funding request. The FY2013 President’s budget request includes a
legislative proposal to reinstate, for five years, the SSA’s authority to conduct demonstration
projects under Title II of the Social Security Act.40
38
SSA, FY2013 Budget Justification, p. 103.
Ibid., pp. 94-96.
40
Section 234 of the Social Security Act (42 U.S.C. §434) granted the SSA the authority to conduct demonstration
projects on programs under Title II of the act. This authority terminated on December 18, 1995. The SSA has
permanent authority to conduct demonstration projects on the SSI program pursuant to Section 1110(b) of the act (42
U.S.C. §1310(b)).
39
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Figure 5. SSA Program Integrity Activities
FY1999 to FY2012
Source: Congressional Research Service (CRS) with data from Social Security Administration, Performance and
Accountability Report, Fiscal Year 1999, November 1999, and subsequent editions.
Note: “All CDRs” include both full medical CDRs and CDR mailers that do not include a medical review.
of the SSA’s total administrative funding request.
Carryover
The annual LAE appropriations language enacted by Congress permits the SSA to carryover
unobligated administrative funds to be used in future fiscal years for information technology
activities. A portion of these unobligated funds are transferred into the agency’s no-year ITS
Information Technology Systems (ITS) account. The SSA currently estimates that it has $162.1 195.6
million in no-year ITS funding available
for FY2012.41 for FY2014.30
SSA Commissioner’s Budget
The Social Security Administration became an independent federal agency in March 1995 after
enactment of the Social Security Independence and Program Improvements Act of 1994, P.L.
103-296. Section 104(a) of this legislation granted the SSA Commissioner the authority to submit
to the Congress, without revision, a budget request.4231 This budget request is independent of the
President’s budget request for the agency and generally includes a request for total administrative
funding and a request for funding for the OIG. The Commissioner’s budget is included in the
section on the SSA in the appendix to the President’s budget. The FY2013 Commissioner’s
41
42
SSA, FY2013 Budget Justification, p. 128.
Section 704(b) of the Social Security Act (42 U.S.C. §904(b)).
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FY2015 Commissioner’s
budget for administrative funding for the SSA is $12.5 billion6 billion, of which $46 million is for
research, with an additional $109105 million for
the OIG.4332
As shown in Figure 63, for each year since the SSA became an independent agency, the
Commissioner’s budget has exceeded the President’s request. In all but two of these fiscal years,
FY1997 and FY2009, the final appropriation from Congress, taking into account any rescissions,
has been less than the Commissioner’s budget and only in FY1997, FY2008, and FY2009 has the
final appropriation exceeded the President’s request.
Figure 6. SSA Administrative Budget Requests and Appropriations
FY1997 to FY2013
Source: Congressional Research Service (CRS) using data from each fiscal year’s President’s budget and
appropriations for the SSA.
Notes: Excludes funding for the OIG. “President’s Request” includes LAE and for FY2000 a $100 million
requested transfer of automation investment funds to base operations. “Final Appropriation” includes all
rescissions, except rescissions of no-year ITS funds, but does not include any supplemental appropriations. The
SSA became an independent agency in 1995 and first submitted a Commissioner’s budget for FY1997.
FY2012 Administrative Funding
Administrative funding for the SSA for FY2012 is primarily provided by the Consolidated
Appropriations Act, 2012, P.L. 112-74, with additional funding for program integrity activities
provided by the Disaster Relief Appropriations Act, 2012, P.L. 112-77. Appropriations for the
43
FY2009, and
FY2014 has the final appropriation exceeded the President’s request.
28
Ibid.
Ibid., p. 108.
30
Ibid., p. 128.
31
Section 704(b) of the Social Security Act [42 U.S.C. §904(b)].
32
Office of Management and Budget, Appendix, Budget of the U.S. Government, Fiscal Year 20132015, Washington, DC,
February 2012, p. 1287March 2014, p. 1257, http://www.ssa.gov/budget/2013BudgetAppendix.pdf.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/ssa.pdf.
29
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SSA in both pieces of legislation are subject to a mandatory 0.189% rescission.44 Taking this
rescission into account, the final FY2012 appropriation for the SSA’s administrative expenses is
$11.4 billion, an increase of 0.3% over the final FY2011 appropriation and a decrease of 8.5%
from the President’s request. The final FY2012 appropriation for the OIG, taking into account the
mandatory rescission, is $102.3 million.
FY2013 Administrative Funding
Congress has not passed legislation providing full-year appropriations for the SSA for FY2013.
Rather, federal government operations are currently funded through a continuing resolution
through March 27, 2013. This continuing resolution provides for an increase of 0.612% for the
portion of the SSA administrative costs (after the FY2012 0.189% rescission) funded by P.L. 11274, but not the portion funded by P.L. 112-77.
On March 6, 2013, the House of Representatives passed H.R. 933, a continuing resolution to fund
the federal government through the end of FY2013. This continuing resolution would fund most
agencies and activities, including the SSA LAE account and SSA OIG, at their FY2012 levels
minus a rescission of 0.098% for non-security programs.45 This rescission would not apply to the
portion of the LAE specifically appropriated for program integrity activities in FY2012
(approximately $757 million).46 Under H.R. 933, total LAE funding for FY2013 would be
reduced from the FY2012 level of $11.45 million to $11.44 million. The Senate has not acted on a
FY2013 full-year continuing resolution.
Sequestration of SSA Administrative Funds
Pursuant to the provisions of the Budget Control Act of 2011, P.L. 112-25, most discretionary
spending of the federal government is subject to automatic reductions because Congress did not
enact legislation developed by the Joint Select Committee on Deficit Reduction. These reductions
were scheduled to begin on January 2, 2013. However, with the enactment of the American
Taxpayer Relief Act of 2012, P.L. 112-240, the effective date of sequestration was delayed until
March 1, 2013.
The rate of reduction for nondefense discretionary accounts is 5.0% of total FY2013
appropriations. In the case of intergovernmental transfers such as the SSA LAE account, which is
financed by the OASI, DI, and Medicare trust funds as well as general revenue, the reductions are
applied to the paying, rather than receiving accounts. Thus, the money transferred to the LAE
account is reduced at the 5.0% sequestration level, resulting in an overall reduction of LAE funds.
44
This rescission is provided by Section 527 of Division F of P.L. 112-74 and applies to all discretionary
appropriations in the Departments of Labor, Health and Human Services, Education, and Related Agencies sections of
P.L. 112-74. Title II of P.L. 112-77 provides that the additional funding for SSA program integrity activities provided
in that legislation “shall be treated for such purposes as being included under this heading in the Departments of Labor,
Health and Human Services, and Education, and Related Agencies Appropriations Act, or any continuing appropriation
Act, for fiscal year 2012,” thus subjecting this funding to the 0.189% rescission provided for in P.L. 112-74.
45
A 0.109% rescission would apply to security programs.
46
The rescission would not apply to approximately $273 million for program integrity appropriated (after the FY2012
rescission) by P.L. 112-74 and approximately $484 million appropriated (after the FY2012 rescission) for program
integrity by P.L. 112-77.
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The portion of LAE paid from general revenue for the purposes of administering the SSI program
is exempt from sequestration. In general, federal administrative expenses are subject to
sequestration, even if they are used to administer programs that are exempt from sequestration.
However, the Office of Management and Budget (OMB) has determined that this rule only
applies to mandatory administrative expenses and that discretionary administrative expenses for
exempt programs are not subject to sequestration.47 Because the SSI program is exempt from
sequestration by law,48 and its administrative expenses are considered mandatory, its portion of
the LAE account is also exempt from sequestration.
Thus, the 5.0% reduction only applies to the portion of LAE that is funded by the OASI, DI, and
Medicare trust funds, resulting in an overall LAE reduction of approximately 3.35% of total
FY2013 appropriations.49 Funding for the SSA OIG is subject to the 5.0% reduction.
The continuing resolution passed by the House of Representatives in March 2013, H.R. 933,
would continue the sequestration provisions through the end of FY2013.
SSA Program Integrity Funding Provisions in the
Budget Control Act of 2011
The Budget Control Act of 2011, P.L. 112-25, places caps on discretionary spending and increases
the federal government’s statutory debt limit.50 Section 101 of the act provides that the annual
discretionary funding caps created by the act are to be adjusted by the amount by which funds
appropriated to the SSA for CDRs and SSI redeterminations for a fiscal year exceed $273 million.
The maximum adjustment for SSA program integrity activities will rise from $623 million for
FY2012 to $1.309 billion a year for FY2017 through FY2021.
Author Contact Information
Scott Szymendera
Analyst in Disability Policy
sszymendera@crs.loc.gov, 7-0014
47
Office of Management and Budget, OMB Report Pursuant to the Transparency Act of 2012 (P.L. 112-155),
Washington, DC, September 2012, pp. 4-5; for additional information, see CRS Report R42050, Budget
“Sequestration” and Selected Program Exemptions and Special Rules, coordinated by Karen Spar.
48
2 U.S.C. § 905(h).
49
The estimated overall LAE reduction is based on information published in Office of Management and Budget, OMB
Report to the Congress on the Joint Committee Sequestration for Fiscal Year 2013, Washington, DC, March 1, 2013;
and information provided to CRS by the Office of Management and Budget and the SSA.
50
For additional information on the federal government’s statutory debt limit, see CRS Report R41633, Reaching the
Debt Limit: Background and Potential Effects on Government Operations, coordinated by Mindy R. Levit.
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Figure 3. SSA Administrative Budget Requests and Appropriations
FY1997 to FY2015
Source: Congressional Research Service (CRS) using data from each fiscal year’s President’s budget and
appropriations for the SSA.
Notes: Excludes funding for the OIG. “President’s Request” includes LAE and for FY2000 a $100 million
requested transfer of automation investment funds to base operations, but excludes for FY2015 the requested
$46 million for research. “Final Appropriation” includes all rescissions, except rescissions of no-year ITS funds,
but does not include any supplemental appropriations. The SSA became an independent agency in 1995 and first
submitted a Commissioner’s budget for FY1997.
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