The other Social Security funding battle: the squeeze on customer service

If you want to understand the fight over Social Security’s future, look no further than your annual benefit statement – if you can find one.

The Social Security Administration stopped mailing annual statements in 2011 in a budget-cutting move that saves $70 million annually. The SSA rolled out an online statement the following year, but only 10 million American wage earners have signed up. That’s a paltry 6 percent of all workers.

The shift may not sound like a big deal given that so much of our personal finances has moved online, but the paper statement was an important annual reminder and education tool. The weak uptake for online services means young people who aren’t yet focused on retirement no longer get an explanation of where their payroll taxes are going. And older people close to retirement aren’t getting a critical projection of what they will receive at various claiming ages.

The loudest battles over Social Security are about potential benefit cuts like the recently vanquished “chained CPI” proposal. But another, less noticed fight has been going on for years. It’s aimed at undermining Social Security through systematic budget cutting by Congress of the operating budget of the SSA, the agency charged with providing customer service to the public.

The SSA has received less than its budget request in 14 of the past 16 years. In fiscal 2012, for example, SSA operated with 88 percent of the amount requested ($11.4 billion).

“It’s part of a raging fight by conservatives to get rid of the government’s footprint wherever possible,” says Nancy Altman, co-director of Strengthen Social Security, an advocacy group.

The SSA’s budget has been restored somewhat, with a fiscal 2014 budget of $11.7 billion. And President Barack Obama’s 2015 budget request is $12 billion, an amount that includes $100 million for modernization of online and in-person services and new funding aimed at prevention of fraudulent or duplicative benefit claims.

But Congress had no business squeezing the SSA budget in the first place. The agency is funded by the same dedicated funding stream (payroll taxes) that funds benefits, and the SSA’s administrative costs are just 1.4 percent of all outlays. The SSA exists to provide customer service to all of us as part of the taxes we pay into the system. Learn more at Reuters Money.