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The Social Security Administration (SSA) is responsible for administering a number of federal entitlement programs that provide income support (cash benefits) to qualified individuals. These programs are
In FY2017, SSA's programs are projected to pay a combined $1.0 trillion in federal benefits to 68.4 million recipients. Spending on administrative costs for these programs is projected to be about 1.3% of benefit outlays.
Although benefit payments for SSA's programs are considered mandatory spending and thus are not controlled by the annual appropriations process, the agency requires annual discretionary appropriations to carry out its programs and to support the administration of non-SSA programs, such as Medicare. SSA's funding is part of the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations bill.
The FY2017 President's budget request for SSA'sThe 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 $900 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 FY2015 budget request for the SSA's administrative expenses, referred to as the limitation on administrative expenses (LAE) account, was $12.0 billion. The FY2015 appropriation for the SSA's LAE account as enacted on December 16, 2015, by P.L. 113-235, the Consolidated and Further Continuing Appropriations Act, 2015, is $11.8 billion.
This report provides an overview of the SSA's mandatory spending but largely focuses (LAE) account, which funds virtually all of SSA's operations, is $13.1 billion. Of this amount, $1.8 billion is for program integrity activities, which include continuing disability reviews (CDRs) and SSI non-medical redeterminations. The total FY2016 appropriation for SSA's LAE account was $12.2 billion, with $1.4 billion dedicated to program integrity work.
This report provides an overview of SSA's mandatory spending but focuses primarily 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 and conduct program integrity activities designed to ensure that only eligible persons receive federal benefits.
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 FY2015, the SSA projects total spending of $963 billion on program benefits and administrative costs,1 with the majority of this spending on benefits and administration of the 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 FY2015 budget request for the SSA's total administrative expenses was $12.4 billion.2
P.L. 113-235, the Consolidated and Further Continuing Appropriations Act, 2015, appropriated a total of $11.9 billion for SSA administrative expenses, including the Office of the Inspector General (OIG), for FY2015. The limitation on administrative expenses (LAE) appropriation is $11.8 billion, with an additional $103.3 million for the OIG.
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
FY2015 OASI Projections4 Average number of beneficiaries: 49.2 million Benefit outlays: $744.1 billion Administrative and other costs: $7.5 billion5 Total program spending: $751.7 billion |
The OASI program is the largest program administered by the SSA. OASI provides cash benefits to insured workers upon retirement and to their spouses, dependents, and survivors. Workers are insured for OASI by working at jobs covered by the Social Security system and paying payroll taxes that finance benefits. OASI benefits and administrative costs are paid out of the federal OASI trust fund.
FY2015 SSDI Projections6 Average number of beneficiaries: 11.1 million Benefit outlays: $146.8 billion Administrative and other costs: $4.0 billion7 Total program spending: $150.8 billion |
The SSDI program pays cash benefits to insured workers unable to work because of significant long-term disabilities.8 The spouses, dependents, and survivors of disabled workers are also eligible for benefits. SSDI benefits continue until the disabled worker 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.
FY2015 SSI Projections9 Average number of federal recipients: 8.3 million Federal benefit outlays: $56.2 billion Federal administrative and other costs: $4.5 billion10 Total federal program spending: $60.7 billion11 |
The SSI program pays cash benefits to low-income aged, blind, and disabled persons, regardless of their Social Security insured status.12 Disabled children are eligible for SSI. To be 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 benefits and administrative costs are paid out of general revenue.
(FY2015) |
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. |
FY2015 Special Benefits for Certain WWII Veterans Projections13 Average number of beneficiaries: 1,000 Benefit outlays: $4 million Administrative and other costs: $1 million14 Total program spending: $5 million |
The SSA pays Special Benefits to Certain World War II Veterans to low-income World War II veterans who are living outside the United States.15 Established in 1999, this program is designed to provide a minimum cash benefit to two groups: low-income American veterans and low-income veterans of the Filipino armed forces that fought alongside the American military during World War II. Beneficiaries must currently live outside the United States and usually live in the Philippines. These benefits and their related administrative costs are paid out of general revenue.
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).
This account is designed to reimburse the OASI and DI trust funds for the costs of certain activities payable by general revenue. It consists of payments permanently and indefinitely authorized—and thus not subject to annual appropriations—and payments subject to annual appropriations.
For FY2015, the President's budget projected $32.0 billion in payments not subject to annual appropriations.16 Nearly this entire amount, $31.7 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 The remaining amounts are from reimbursement for union administrative expenses, Social Security payroll tax credits, and payments related to changes in the reporting of self-employment income.18
For FY2015, the President's budget requested $16.4 million in payments to the Social Security trust funds subject to annual appropriations.19 Of this request, $10.0 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 The President's budget did 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.21
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 FY2015 budget requested $40.9 billion for current fiscal year program costs and $19.2 billion for SSI benefits in the first quarter of FY2016. Total federal benefit payments in FY2015 are estimated to be $56.2 billion, with $19.7 billion coming from the FY2015 advance appropriation.22
In addition to providing for the cost of SSI benefits, the appropriation for the SSI program provides for administrative expenses relating to the SSI program, beneficiary services, and costs related to research and demonstration projects. The FY2015 President's budget request for these administrative and other expenses was $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 FY2015 President's budget request for administrative expenses was just under $4.3 billion.
The Social Security Administration (SSA) oversees programs that touch the lives of millions of American families and are key components of the nation's economic safety net. The Old-Age, Survivors, and Disability Insurance (OASDI) program, commonly known as Social Security, is the most well-known of these programs. SSA is also responsible for carrying out two cash assistance programs for certain groups of low-income individuals: (1) Supplemental Security Income (SSI) for the Aged, Blind, and Disabled and (2) Special Benefits for Certain World War II Veterans. In addition to its core programs, the agency supports the administration of a number of non-SSA programs, such as Medicare, and provides and verifies data for a variety of federal and state program purposes. Benefit payments for SSA's core programs are considered mandatory spending, which means that such outlays are controlled by each program's authorizing statute—not by appropriations acts.1 However, the resources needed to carry out SSA's core programs, as well as to support the administration of other national priorities, are considered discretionary spending and thus are controlled by the annual appropriations process. This report provides background on SSA's core programs and related mandatory spending but its focus is on SSA's annual discretionary appropriations for administrative expenses. This report begins with a brief description of SSA's core programs and then examines its FY2017 projected spending on benefit payments and operating costs. Next, it discusses each component of the FY2017 President's budget request for SSA, including the agency's limitation on administrative expenses (LAE) account. Lastly, the report examines historical trends in the budget request and appropriation for SSA's LAE account. Most of the data presented in this report can be found in SSA's FY2017 budget justification to Congress, which is available at https://www.ssa.gov/budget/. SSA's primary purpose is to administer several federal income support programs established under the Social Security Act, namely Social Security is a social insurance program that replaces a portion of an insured worker's income based on the individual's career-average earnings in covered employment. In contrast, SSI and Special Benefits for Certain World War II Veterans are public assistance programs that provide a guaranteed minimum income to certain groups of individuals who have little or no Social Security or other income. All three programs are entitlements, which means that the federal government is obligated to pay benefits to individuals who meet the eligibility requirements specified in each program's authorizing statute.5 To conform with data presented in SSA's FY2017 budget justification, this report describes the Old-Age and Survivors Insurance and Disability Insurance components of Social Security as separate programs. FY2017 OASI Projections7 Average number of beneficiaries: 51.8 million Average monthly retired-worker benefit: $1,369 Benefit outlays: $812.6 billion Administrative and other costs: $7.4 billion8 Total program spending: $820.0 billion Old-Age and Survivors Insurance (OASI) provides monthly cash benefits to insured workers aged 62 or older and to their eligible spouses and children. It also pays benefits to certain survivors of deceased insured workers. Workers achieve insured status by working and paying Social Security taxes for a sufficient number of years in jobs that are covered under the Social Security system. OASI benefits and administrative costs are paid out of the Federal Old-Age and Survivors Insurance Trust Fund to which current workers, their employers, and self-employed individuals contribute.9 Under current law, the OASI trust fund's share of the combined 12.4% Social Security payroll tax rate is 10.03%. FY2017 SSDI Projections11 Average number of beneficiaries: 11.0 million Average monthly disabled-worker benefit: $1,176 Benefit outlays: $149.2 billion Administrative and other costs: $3.5 billion12 Total program spending: $152.7 billion Social Security Disability Insurance (SSDI) pays monthly cash benefits to nonelderly insured workers who are unable to perform substantial work because of severe, long-term disabilities and to their eligible spouses and children. Workers become insured in the event of disability by working for a certain number of years in jobs that are covered under Social Security and thus are subject to payroll taxes. SSDI benefits are payable until the disabled worker dies, returns to work, or reaches Social Security's full retirement age (currently 66), at which point the worker transitions to OASI. SSDI benefits and administrative costs are paid out of the Federal Disability Insurance (DI) Trust Fund to which current workers, their employers, and self-employed individuals contribute.13 Under current law, the DI trust fund's share of the combined 12.4% Social Security payroll tax rate is 2.37%. FY2017 SSI Projections15 Average number of federal recipients: 8.2 million Average monthly benefit: $561 Federal benefit outlays: $56.2 billion Federal administrative costs: $5.5 billion16 Total federal program spending: $61.7 billion17 FY2017 Special Benefits for Certain WWII Veterans Projections19 Average number of recipients: Less than 500 Average monthly benefit: $380 Federal benefit outlays: $2 million Administrative costs: $1 million Total program spending: $3 million The Special Benefits for Certain World War II Veterans program provides a minimum cash benefit to two groups of low-income individuals living outside of the United States: American veterans of World War II and veterans of the Filipino armed forces that fought alongside the American military during that conflict. To qualify, individuals must have been aged 65 or older on December 14, 1999; have been SSI eligible for that month; be an eligible World War II veteran; have limited income; and reside outside the United States. The program's benefits and related administrative costs are paid out of general revenues.
(benefit payments plus administrative expenses and other costs) As noted earlier, benefit outlays for SSA's core programs are considered mandatory spending and therefore are not controlled by annual appropriations acts.21 Spending on benefit payments for these programs is determined by the eligibility requirements and payment levels specified in each program's authorizing statute. Program Share of Trust Fund Income Share of Benefit Payments OASI 0.3% 0.3% SSDI 1.8% 2.0% OASDI (combined) 0.6% 0.6% SSI (federal and state) 9.2% 50.0% 1.3% Source: CRS, adapted from SSA, FY2017 Budget Justification, Table i10, p. 9. Notes: The table excludes certain non-SSA administrative outlays and other expenses attributable to the OASI, SSDI, and SSI programs in Tables i5 and i7 of SSA's FY2017 budget justification. Administrative outlays as a share of benefit payments are greater for SSA's disability programs compared with the OASI program because the disability programs are more complex to administer and therefore require more resources per applicant or beneficiary. As a means-tested program, SSI is particularly complex to administer because SSA must verify all sources of income and resources available to an SSI applicant or recipient as well as the individual's living situation. The high ratio of administrative outlays to benefit payments under the Special Benefits for Certain World War II Veterans program is due primarily to low benefit levels and the steadily decreasing number of individuals in receipt of benefits. In FY2017, SSA projects that the program will pay benefits to fewer than 500 individuals on average. Although benefit payments for SSA's programs are considered mandatory spending and thus are not controlled by the annual appropriations process, the agency requires annual discretionary appropriations to carry out its programs and to support the administration of non-SSA programs, such as Medicare. SSA's accounts are traditionally funded via the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations bill.23 This section of the report provides an overview of SSA's appropriations by examining the components of the FY2017 President's budget request for the agency. The report will be updated to reflect SSA appropriations passed by the House and the Senate Committees on Appropriations as well as the enacted appropriation for the fiscal year. For more information on the annual appropriations process, see CRS Report R42388, The Congressional Appropriations Process: An Introduction. Fund Amount Payments to Social Security Trust Funds $11,400,000 Supplemental Security Income Program (total) 58,824,868,000 FY2017 Request 43,824,868,000 FY2018 First Quarter Advance 15,000,000,000 Limitation on Administrative Expenses 13,067,000,000 Office of Inspector General 112,000,000 Total $72,015,268,000 Source: CRS, based on SSA, FY2017 Budget Justification, Table i1, p. 1. Notes: The "FY2017 Request" excludes $14,500,000,000, previously appropriated as a first quarter advance for FY2017. The following section discusses each account in more detail. For FY2017, the President's budget projects $39.2 billion in payments that are not controlled by annual appropriations acts.24 Nearly this entire amount is from subjecting a portion of Social Security benefits to federal personal income tax.25 The remaining amounts are from reimbursement for union administrative expenses and payments related to changes in the reporting of self-employment income.26 For FY2017, the President's budget request includes $11.4 million in payments to the Social Security trust funds that are subject to the annual appropriations process.27 Of this amount, $5.0 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.28 The vast majority of funding provided to SSA each year is for the SSI program, which is an appropriated entitlement (mandatory appropriation).29 As with other entitlement programs, such as Social Security, the level of spending on SSI benefits is controlled through the program's authorizing statute, which sets the criteria used to determine program eligibility and payment amounts. However, because SSI's authorizing statute does not provide authority to make payments to fulfill legal obligations, funding for SSI benefits is provided through mandatory spending that is enacted through annual appropriations acts. SSI-related administrative expenses are also provided through the annual appropriations process. Funding for the SSI program is paid out of general revenues and appropriated to SSA in this account. The SSI account contains three components. First, there is a main or "regular" appropriation for SSI benefits and administrative costs for the current fiscal year, which is described in additional detail below. Second, there is an indefinite appropriation for any costs incurred for the current fiscal year after June 15. This component allows SSA to continue to pay SSI benefits in the event that benefit obligations are greater than expected during the last months of the fiscal year. Third, there is an advance appropriation for benefit payments for the first quarter of the succeeding fiscal year. This component is designed to ensure the timely payment of benefits in case of a delay in next fiscal year's appropriations bill. Funds appropriated for the SSI program remain available to SSA until expended. The FY2017 President's budget request includes $43.8 billion for current fiscal year program costs and $15.0 billion for SSI benefits in the first quarter of FY2018.30 Total SSI benefits payable in FY2017 are estimated to be $52.9 billion, with $14.5 billion coming from the FY2017 advance appropriation that was enacted as part of the FY2016 appropriations bill.31 In addition to funding benefit payments, the SSI appropriation provides for administrative expenses associated with the program, beneficiary services, and costs related to research and demonstration projects. The FY2017 President's budget request for these administrative and other expenses is $5.4 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 revenues 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 FY2017 President's budget request for administrative expenses is $5.2 billion. The appropriation for the LAE account funds SSA's administrative costs associated with the OASI, SSDI, SSI, and Special Benefits for Certain World War II Veterans programs as well as costs incurred by the agency to support Medicare and certain other non-SSA programs. This account also funds administrative functions, such as the operations of SSA's more than 1,200 field offices nationwide, employment verification, information technology activities, and the Social Security Advisory Board (SSAB).
Source: CRS, based on data from SSA, FY2017 Budget Justification, Table 3.7, pp. 129-130. Activity Budget Request Base LAE $11,121,000,000 Program Integrity (total) 1,819,000,000 Base Amount 273,000,000 Cap Adjustment 1,546,000,000 State SSI User Fees 126,000,000 Non-Attorney User Fees 1,000,000 Total $13,067,000,000 Source: CRS, based on SSA, FY2017 Budget Justification, pp. 96-98. The following subsections explain the program integrity and user fee components of the total LAE appropriation in more detail. The FY2017 President's budget request includes $1.8 billion for costs associated with SSA's program integrity activities, which include continuing disability reviews (CDRs) and SSI redeterminations.36 CDRs are periodic reviews of disabled Social Security and SSI recipients to determine if they continue to meet the statutory definition of disability.37 SSI redeterminations are periodic reviews of non-medical eligibility factors (i.e., income, assets, and living arrangements) to determine if SSI recipients are still eligible for the program and are receiving the correct payment amount.38 In addition to modifying the cap adjustment levels in the BBEDCA, the BBA 2015 expanded the types of program integrity activities for which cap adjustment funding can be used to include Cooperative Disability Investigations (CDI) Units and fraud prosecutions by Special Assistant United States Attorneys (SAUSAs). The CDI program is a multi-agency effort between SSA, the Office of the Inspector General (OIG), state Disability Determination Services (DDS) agencies, and state and local law enforcement to investigate suspicious or questionable disability claims under the Social Security and SSI programs.42 SAUSAs are attorneys from SSA's Office of the General Counsel who are dedicated to prosecuting fraud cases referred by the OIG that otherwise would not be prosecuted in federal court.43 Furthermore, the BBA 2015 clarified that the term continuing disability reviews includes work-related CDRs, which are reviews of disabled Social Security beneficiaries to determine if their earnings and related work activity are within applicable limits and if benefits should continue. Fiscal Year Cap Adjustment Under Prior Law Cap Adjustment Under the Bipartisan Budget Act of 2015 Change in Cap Adjustment 2012 $623,000,000 $623,000,000 - 2013 751,000,000 751,000,000 - 2014 924,000,000 924,000,000 - 2015 1,123,000,000 1,123,000,000 - 2016 1,166,000,000 1,166,000,000 - 2017 1,309,000,000 1,546,000,000 $237,000,000 2018 1,309,000,000 1,462,000,000 153,000,000 2019 1,309,000,000 1,410,000,000 101,000,000 2020 1,309,000,000 1,309,000,000 0 2021 1,309,000,000 1,302,000,000 -7,000,000 Net Change - - $484,000,000 Source: CRS, based on Section 101 of the Budget Control Act of 2011 (P.L. 112-25) and Section 815 of the Bipartisan Budget Act of 2015 (P.L. 114-74). Notes: Maximum annual adjustments to discretionary spending caps for SSA-related program integrity activities are set in 2 U.S.C. §901(b)(2)(B). The FY2017 President's budget includes a request for $127 million in LAE appropriations from two user fees collected by SSA, with $126 million from fees collected from states for the administration of their supplementary payments to the SSI program.44 An additional $1 million was requested from fees paid by non-attorney representatives for certification to represent claimants during the application and administrative appeals process. The OIG investigates fraud, waste, and abuse within SSA's core programs and audits such programs to determine their effectiveness and efficiency. The OIG also monitors improper receipt of federal benefits; investigates certain crimes committed by SSA employees, contractors, and program beneficiaries; and supports larger government-wide homeland security efforts. The FY2017 President's budget request for the OIG is $112 million, of which $31 million is from general revenues and $81 million is from the OASI and DI trust funds as authorized by Section 201(g)(1) of the Social Security Act45 for costs associated with the OASI and SSDI programs.46 SSA became an independent federal agency on March 31, 1995, after enactment of the Social Security Independence and Program Improvements Act of 1994 (P.L. 103-296).47 Section 104(a) of this legislation granted the SSA Commissioner—formally known as the Commissioner of Social Security—the authority to submit to Congress, without revision, a budget request.48 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 OIG funding. The Commissioner's budget is included in the section on SSA in the appendix to the President's budget. The FY2017 Commissioner's budget for SSA administrative funding is $13.9 billion, which represents $13.6 billion for administrative expenses, $128 million for research, and $121 million for the OIG.49 Activity President's Budget Request House Committee Passed Senate Committee Passed Enacted Appropriation Base LAE $10,937,000,000 $10,284,945,000 $10,044,945,000 $10,598,945,000 Program Integrity (total) 1,439,000,000 1,396,000,000 1,439,000,000 1,426,000,000 Base Amount 273,000,000 273,000,000 273,000,000 273,000,000 Cap Adjustment 1,166,000,000 1,123,000,000 1,166,000,000 1,153,000,000 State SSI User Fees 136,000,000 136,000,000 136,000,000 136,000,000 Non-Attorney User Fees 1,000,000 1,000,000 1,000,000 1,000,000 Total LAE $12,513,000,000 $11,817,945,000 $11,620,945,000 $12,161,945,000 As a Share of the President's Budget Request 100.0% 94.4% 92.9% 97.2% As a Share of the Enacted Appropriation 102.9% 97.2% 95.6% 100.0% Source: CRS, based on the FY2016 President's budget request, the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2016 (H.R. 3020 and S. 1695), and the Consolidated Appropriations Act, 2016 (P.L. 114-113).
(in nominal dollars) Source: CRS, based on data from each fiscal year's President's budget request and enacted appropriation for SSA's LAE account. Notes: Excludes funding for the Office of the Inspector General (OIG). "President's Request" includes LAE and, for FY2000, a $100 million requested transfer of automation investment funds to base operations but excludes funding associated with the legislative request to create a dedicated source of funding for program integrity activities for FY2014. "Final Appropriation" includes all rescissions, except rescissions of no-year Information Technology Systems funds, but does not include any supplemental appropriations. SSA became an independent agency in 1995 and first submitted a commissioner's budget for FY1997. In FY2014, the President's request included a legislative proposal for a dedicated source of funding for program integrity activities, instead of a request for discretionary cap adjustment funding.50 If the funding associated with this legislative proposal is included, then the final appropriation for FY2014 is less than the President's request.
Source: CRS, based on each fiscal year's appropriation for SSA's LAE account. Another method for examining historical trends in SSA's LAE account is to adjust the annual appropriation for wage growth. The majority of SSA's administrative budget is obligated for payroll expenses, which include pay raises due to step increases, promotions, and cost-of-living adjustments.51 Because wages tend to grow faster than prices, annual increases in payroll expenses, which are largely fixed costs, can increase an agency's administrative expenses faster than the rate of inflation.52 The top line labeled "Wage Indexed to 2016 Dollars" shows the trend in the appropriation for SSA's LAE account adjusted for changes in wages, as measured by SSA's Average Wage Index (AWI).53 Unlike the price-indexed line, the wage-indexed line shows a steady decline in the value of SSA's appropriation for the LAE account in real terms starting in FY2010 and continuing through FY2016. Author Contact Information See U.S. Government Accountability Office (GAO), A Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP, September 1, 2005, http://www.gao.gov/products/GAO-05-734SP. 42 U.S.C. §401 et seq. 42 U.S.C. §1381 et seq. 42 U.S.C. §1001 et seq. See CRS Report RS20129, Entitlements and Appropriated Entitlements in the Federal Budget Process. For more information on Old-Age and Survivors Insurance (OASI), see CRS Report R42035, Social Security Primer. Social Security Administration (SSA), Justifications of Estimates for Appropriations Committees, Fiscal Year 2017, February 2016, Tables i4-i6, pp. 4-5, https://www.ssa.gov/budget/ (hereinafter cited as "SSA, FY2017 Budget Justification"). Figure includes OASI administration expenses, beneficiary services, payments to the Railroad Retirement Board, and Treasury administrative expenses. OASI administrative expenses chargeable to the Federal Old-Age and Survivors Insurance Trust Fund are projected to be $2.8 billion in FY2017. 42 U.S.C. §401(a). For more information on the OASI trust fund, see CRS Report RL33028, Social Security: The Trust Funds. For additional information on Social Security Disability Insurance (SSDI), see CRS Report RL32279, Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).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
The Social Security Administration (SSA): Budget Request and Appropriations
Introduction
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WWII Vetsb
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Totalc
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services provided to SSI recipients. The FY2015 President's budget requested $70request includes $89 million for beneficiary services, $5358 million for Title XVI research and demonstration projects, and an additional $12 million for costs associated with the Department of State's two-year special immigrant visa extension for Afghans.33
Limitation on Administrative Expenses
Footnotes
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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
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 monitors improper receipt of federal benefits; investigates certain crimes committed by SSA employees, contractors, and program beneficiaries; and supports larger government-wide homeland security efforts. The President's FY2015 budget request for the OIG was $104.6 million, of which $29 million is from general revenue and $75.6 million is from the OASI and DI trust funds as authorized by Section 201(g)(1) of the Social Security Act24 for costs associated with the OASI and DI programs.25
The FY2015 appropriation for the OIG is $103.3 million, of which $29 million is from general revenue and $74.5 million is from the OASI and DI trust funds.
The appropriation for the 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 the SSA can spend on its administrative activities. Figure 2 provides the breakdown of budget authority for the LAE account in the President's FY2015 budget request.
The FY2015 President's budget request for SSA's LAE account was $12.0 billion.26 This total appropriation consisted 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 FY2015 budget request for the base LAE account was $10.5 billion.
The FY2015 appropriation for LAE is $11.8 billion, with $10.3 billion for base LAE, $1.4 billion for program integrity activities such as continuing disability reviews and SSI redeterminations, and $125 million from user fees. Table 1 provides a comparison of the FY2015 budget request and the final appropriation for the LAE account.
(FY2015 President's budget request) |
Notes: "OASI and DI Trust Funds" includes administrative costs for Special Benefits for Certain World War II Veterans. |
The FY2015 President's budget requested $1.4 billion for costs associated with conducting continuing disability reviews (CDRs) and SSI redeterminations.27 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 $1.123 billion permitted for FY2015. Thus, the President's budget request of $1.396 billion for program integrity activities for FY2015 included the maximum base amount of $273 million and the full cap adjustment of $1.123 billion.
The FY2015 appropriation for program integrity activities is identical to the budget request: $1.396 billion, which includes the maximum base amount of $273 million and the full cap adjustment of $1.123 billion.
The FY2015 President's budget request included $125 million in LAE appropriations from two user fees collected by the SSA, with $124 million from fees collected from states for the administration of their SSI supplement programs.28 An additional $1 million was requested from fees paid by non-attorney representatives for certification to represent claimants before the SSA.
The FY2015 appropriation provides for $125 million in funding from users fees with $124 million from the state SSI supplement administration fees and $1 million from the non-attorney representatives' fees.
The FY2015 President's budget request also included $53 million for research and demonstration projects.29 Although this request was not part of the formal requested LAE language, it was a component of the SSA's total administrative funding request.
The FY2015 appropriation does not contain a separate budget line for research and demonstrations within the LAE appropriation. However, up to $83 million of the appropriation for the SSI program may be used for research and demonstrations, and the appropriation bill's explanatory statement provides that $35 million of the research and demonstration funds are to be used for a disability early intervention demonstration.
The annual LAE appropriations language enacted by Congress permits the SSA to carry over unobligated administrative funds to be used in future fiscal years for information technology activities. A portion of these unobligated funds is transferred into the agency's no-year Information Technology Systems (ITS) account. The SSA currently estimates it had $195.6 million in no-year ITS funding available for FY2014.30
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 Congress, without revision, a budget request.31 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 OIG funding. The commissioner's budget is included in the section on the SSA in the appendix to the President's budget. The FY2015 commissioner's budget for SSA administrative funding was $12.6 billion, of which $46 million was for research and $105 million was for the OIG.32
As shown in Figure 3, for each year since the SSA became an independent agency, the commissioner's budget has exceeded the President's request. In all but two of these fiscal years, FY1997 and FY2009, the final appropriation from Congress, taking into account any rescissions, has been less than the commissioner's budget. Only in FY1997, FY2008, FY2009, and FY2014 has the final appropriation exceeded the President's request.
In FY2014, the President's request included a legislative proposal for a dedicated source of funding for program integrity activities, instead of a request for above-the-cap discretionary funding.33 If the funding associated with this legislative proposal is included, then the final appropriation for FY2014 is less than the President's request.
Table 1. Comparison of FY2015 Budget Request and Appropriations for the Social Security Administration's Limitation on Administrative Expenses
Activity |
Budget Request ($) |
Appropriation ($) |
||
Base LAE |
|
| ||
Program Integrity Total |
|
| ||
Base Amount |
|
| ||
Above the Cap |
|
| ||
State SSI User Fees |
|
| ||
Non-Attorney User Fees |
|
| ||
Total LAE |
|
|
Source: Social Security Administration, Justifications of Estimates for Appropriations Committees, Fiscal Year 2015, March 2014, pp. 98-99, http://ssa.gov/budget/FY15Files/2015FCJ.pdf , and P.L. 113-235.
Author Contact Information
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. |
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2. |
Includes request for the Office of the Inspector General (OIG), research, and other planned obligations. |
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3. |
For additional information on mandatory and discretionary spending in the federal budget, see CRS Report RL33074, Mandatory Spending Since 1962, by [author name scrubbed] and [author name scrubbed] and CRS Report RL34424, The Budget Control Act and Trends in Discretionary Spending, by [author name scrubbed]. |
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4. |
Social Security Administration (SSA), FY2015 President's Budget: Key Tables, March 2014, Tables 3-5, http://ssa.gov/budget/FY15Files/2015KT.pdf; hereinafter cited as SSA, FY2015 Key Tables. |
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5. |
Includes administrative expenses, demonstration projects, payments to the Railroad Retirement Board, and the quinquennial adjustment for military wage credits. |
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6. |
SSA, FY2015 Key Tables, Tables 3-5. |
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7. |
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. |
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8. |
For additional information on the Social Security Disability Insurance (SSDI) program, see CRS Report RL32279, Primer on Disability Benefits: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), by [author name scrubbed]. |
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9. |
|
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11. |
Total projected Supplemental Security Income (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. |
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12. | 42 U.S.C. §401(b). For more information on the DI trust fund, see CRS Report R43318, The Social Security Disability Insurance (DI) Trust Fund: Background and Current Status. |
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SSA, | ||||||||||||||||||||||||||||||||||||||||||||||||||
14. |
Includes program administrative costs only. |
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15. |
For additional information on Special Benefits for Certain World War II Veterans, see CRS Report RL33876, Overview of Filipino Veterans' Benefits, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. |
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16. |
SSA, Justifications of Estimates for Appropriations Committees, Fiscal Year 2015, March 2014, p. 28, http://www.ssa.gov/budget/2015FullJustification.pdf; hereinafter cited as SSA, FY2015 Budget Justification. |
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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 Old-Age and Survivors Insurance (OASI) and (Disability Insurance) 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. |
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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 FY2015 is $8 million. |
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16.
|
|
Figure includes beneficiary services, research, administrative costs, and $2 million for the State Department's two-year Special Immigrant Visa extension for Afghans in FY2017. 17.
|
|
Total projected SSI program spending does not include the fees paid by 11 states and the District of Columbia to SSA to administer their state supplementation programs. 18.
|
|
For more information on Special Benefits for Certain World War II Veterans, see SSA, Special Benefits for Certain World War II Veterans, March 2016, Publication No. 05-10157, https://www.ssa.gov/pubs/EN-05-10157.pdf. 19.
|
|
SSA, FY2017 Budget Justification, Tables i4 and i9, pp. 4 and 8. 20.
|
|
SSA, FY2017 Budget Justification, Table 3.18, p. 145. Figure is adjusted for concurrent receipt of Social Security and SSI and excludes individuals in receipt of a federally administered state supplementary payment (SSP) but no federal SSI benefit. 21.
|
|
See CRS Report RL33074, Mandatory Spending Since 1962. For more information on federal budget terms, see Chapter 9 ("Budget Concepts") in U.S. Office of Management and Budget (OMB), Analytical Perspectives, Budget of the United States Government, Fiscal Year 2017, February 2016, pp. 97-119, https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/ap_9_concepts.pdf. 22.
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|
Income to the OASI and DI trust funds is composed of payroll taxes, income from the taxation of Social Security benefits, reimbursements from the General Fund of the U.S. Treasury for various costs imposed on the Social Security program, and interest earned on investments held by the trust funds. 23.
|
|
See CRS Report R44287, Labor, Health and Human Services, and Education: FY2016 Appropriations. 24.
|
|
SSA, FY2017 Budget Justification, Table 1.5, p. 22. 25.
|
|
Up to 85% of a Social Security recipient's benefits are subject to federal income tax. The share of Social Security benefits that is taxable depends on whether the individual's provisional income exceeds certain thresholds. Provisional income equals adjusted gross income plus otherwise tax-exempt interest income (i.e., interest from tax-exempt bonds), plus 50% of Social Security benefits. Income derived from the taxation of up to the first 50% of Social Security benefits is credited to the OASI and DI trust funds based on the source of the benefits taxed. Medicare's Hospital Insurance (HI) trust fund is credited with the remainder of income from the taxation of Social Security benefits. See CRS Report RL32552, Social Security: Calculation and History of Taxing Benefits. 26.
|
|
The Food, Conservation, and Energy Act of 2008 (P.L. 110-246) made changes to the reporting of self-employment income. Section 15361 of the act is a mandatory appropriation to reimburse the OASI and DI trust funds for revenue lost in FY2009 through FY2017 because of these changes. The estimate for FY2017 is $7 million. 27.
|
SSA, FY2017 |
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Section 1131 of the Social Security Act (42 U.S.C. §1320b-1), as established by the Employee Retirement Income Security Act of 1974 |
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21. |
The SSA has determined that appropriations are not needed in FY2015 for these activities. Costs 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. |
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22. |
SSA, FY2015 Budget Justification, p. 42. |
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23. |
Ibid. |
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24. |
42 U.S.C. §401(g). |
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25. |
SSA, FY2015 Budget Justification, p. 164. |
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26. |
Ibid., pp. 98-99. |
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27. |
Ibid. |
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28. |
Ibid. |
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29. |
Ibid., p. 108. |
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30. |
Ibid., p. 128. |
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31. |
Section 704(b) of the Social Security Act [42 U.S.C. §904(b)]. |
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32. |
Office of Management and Budget, Appendix, Budget of the U.S. Government, Fiscal Year 2015, Washington, DC, March 2014, p. 1257, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/ssa.pdf. |
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|
See CRS Report R42388, The Congressional Appropriations Process: An Introduction. 30.
|
|
SSA, FY2017 Budget Justification, Table 2.3, p. 43. 31.
|
|
Ibid. 32.
|
|
See CRS Report R41934, Ticket to Work and Self-Sufficiency Program: Overview and Current Issues. 33.
|
|
SSA, FY2017 Budget Justification, Table 2.3, p. 43. 34.
|
|
For more information on Medicare's trust funds, see CRS Report R43122, Medicare Financial Status: In Brief. 35.
|
|
SSA, FY2017 Budget Justification, pp. 96-98. 36.
|
|
Ibid. 37.
|
|
For more information on continuing disability reviews (CDRs), see the Social Security Advisory Board (SSAB), 2014 Disability Policy Panel: Continuing Disability Reviews, December 2014, http://www.ssab.gov/Portals/0/OUR_WORK/REPORTS%20TO%20THE%20BOARD/DPP_2014_CDRs_Final_Report.pdf. 38.
|
|
See SSA, "Understanding Supplemental Security Income Redeterminations," https://www.ssa.gov/ssi/text-redets-ussi.htm. 39.
|
|
See CRS Report RL34424, The Budget Control Act and Trends in Discretionary Spending, and CRS Report R42506, The Budget Control Act of 2011 as Amended: Budgetary Effects. 40.
|
|
For more information, see Letter from Douglas W. Elmendorf, Director of the U.S. Congressional Budget Office, to the Honorable John A. Boehner, Speaker of the U.S. House of Representatives, and to the Honorable Harry Reid, Majority Leader of the U.S. Senate, August 1, 2011, https://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/123xx/doc12357/budgetcontrolactaug1.pdf. 41.
|
|
2 U.S.C. §901(b)(2)(B). 42.
|
|
For more information on Cooperative Disability Investigations (CDI) Units, see SSA, Office of the Inspector General (OIG), "Cooperative Disability Investigations (CDI)," http://oig.ssa.gov/cooperative-disability-investigations-cdi. 43.
|
|
For more information on Special Assistant U.S. Attorney and SSA fraud prosecutions, see SSA, Social Security Administration Fiscal Year 2015 Bipartisan Budget Act of 2015 Section 845(a) Report, 2016, pp. 5-6, https://www.ssa.gov/budget/FY17Files/2017FCJ.pdf. 44.
|
|
SSA, FY2017 Budget Justification, p. 98. 45.
|
|
42 U.S.C. §401(g). 46.
|
|
SSA, FY2017 Budget Justification, p. 196. 47.
|
|
For more information on the agency's history, see SSA, "Social Security History: Organization History," https://www.ssa.gov/history/orghist.html. 48.
|
|
Section 704(b) of the Social Security Act; 42 U.S.C. §904(b). 49.
|
|
OMB, Appendix, Budget of the U.S. Government, Fiscal Year 2017, Washington, DC, February 2016, p. 1236, https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/ssa.pdf. 50.
|
|
For additional information on this legislative proposal see SSA, Justifications of Estimates for Appropriations Committees, Fiscal Year 2014, April 2013, p. 95, http://ssa.gov/budget/FY14Files/2014AE.pdf. 51.
|
|
SSA, FY2017 Budget Justification, Table 3.11, pp. 134-135. 52.
|
|
See the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, The 2015 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, July 22, 2015, Table V.B1, Single Year Tables, https://www.ssa.gov/oact/tr/2015/lr5b1.html. 53.
|
|
SSA, "National Average Wage Index," https://www.ssa.gov/oact/cola/AWI.html. |
For additional information on this legislative proposal see SSA, Justifications of Estimates for Appropriations Committees, Fiscal Year 2014, April 2013, p. 95, http://ssa.gov/budget/FY14Files/2014AE.pdf. |