Taxes

Finding Value—and my Social Security—in light of Budget Cuts

January 9, 2017 • By

Reading Time: 2 Minutes

Last Updated: November 3, 2023

man and woman on computerEvery payday, you have Federal Insurance Contributions Act (FICA) and Self-Employed Contributions Act (SECA) taxes deducted from your paycheck. Nearly all of these contributions are used to pay Social Security benefits to more than 60 million retired, disabled, and widowed workers and their children, as well as to Medicare beneficiaries. A very small amount also helps pay for the work it takes to manage Social Security programs.

Providing Social Security services to the public is a big job. We have fewer than 64,000 employees in offices across the country handling millions of transactions yearly — taking applications, answering questions in person and on the phone, verifying benefit amounts, and reviewing appeals, among other things. The cost of doing these services is less than one penny out of each dollar paid in FICA and SECA taxes, which is a very good value.

Lawmakers in Congress decide each year how much money we can use to manage our programs and pay our staff. Because that hasn’t been settled yet, we’re operating under a continuing resolution (CR) with less funding than last year. This is not new for us. In fact, the amount we have to run our programs is 10 percent lower than it was in 2010, after adjusting for inflation. At the same time, the number of beneficiaries we serve has gone up by 13 percent. So, we have fewer resources to serve more people.

We made some difficult decisions because of these latest budget limits. During the past year, we began a hiring freeze that will reduce our staff to the lowest level since FY 2013. We use a lot less overtime now, which affects our ability to reduce critical backlogs. Over a million people are waiting for a hearing to see if they are eligible for disability benefits.

Today, we are taking another cost-saving step. We will mail fewer paper Social Security Statements. Paper Statements will only be sent to people age 60 and over, who are not getting benefits and don’t have a my Social Security account. This will bring down the costs of processing and mailing paper Statements by $11.3 million in FY 2017.

We know that our cutbacks will affect many of you, but we have no choice. We will continue to serve you and work for you as best we can. Congress has until April 28, 2017, to pass a spending bill for the full year or pass another CR. While we can’t predict our budget level for the rest of the fiscal year, we think there may be more bumps in our journey together. We’ll do our best to get through them so you will have a secure today and tomorrow.

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About the Author

Doug Walker, Deputy Commissioner, Communications

Deputy Commissioner, Office of Communications

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Comments

  1. Phyllis B.

    I need my Social Security because I have worked since 1977 and I had a stroke and I have to see a doctor every week. I need my money because they took money out of my checks so that when I got sick it would be there for me

  2. Ben

    You say nearly all FICA contributions are used to pay Social Security benefits. Where do Title IV-D funding to states come from? What % of the total FICA contributions go to states as Title IV-D funding? How much is the average annual Title IV-D state funding? I’m trying to understand these #’s but cannot find them publicized.

    Thank you.

    • AKA

      You can’t find out anything because IV-D state has nothing to do with FICA.

  3. Al S.

    Thank you to all Social Security staff for your hard work under difficult budget conditions! I am most grateful for Social Security.

  4. Ed M.

    The People are 5*. The Congress sucks and will only be worse with Trump

    • Joe K.

      It’s time to tilt the “entitlement mentality” so the pendulum can swing toward self support… JFK, EA, MSPA

      • BloggerRadio.com

        ROTFLMAO @ Joe Kerner, are the elderly members of your family refusing their SS benefits? Mailing the money back? Only those currently RECEIVING SS benefits have any clue. The Wall Street types that we already had to bail out are nothing but trolls.

    • Kay

      The present BO President
      sure didn’t . His fruit didn’t even blossom on the tree. He did nothing but take money away & never protected what WE AMERICAN’s put in this fund. We all worked hard for this. This is our livelihood now.
      Let’s stay positive about our NEW President and pray he sets some goals
      & laws about Medicare.
      1. Pay Medicare back.
      2. Not allow any group to dip into our account in the future.

      • Paul W.

        All funds paid into Social Security and Medicare are used to purchase Treasury Notes that same day. As such all the money paid into these programs is still there in the form of Treasury Notes. As necessary the treasury Notes are cashed in to pay benefits. A significant portion of the 20 Trillion National Debt is made up of these Treasury Notes.

        • Barnes

          Correct analysis sir. Unfortunately the average citizen remains ignorant as to what you are saying. They do no critical thinking and only read headlines.

        • Morgan

          Treasury Notes are promises to pay. A note is a debt instrument. The SS withholding from your paycheck, in the form of cash, is deposited to the government Treasury and they, in return, take the cash and give a Note (promise to pay) to the “Fund”. The cash is not still there, it is being used by our government. Only thing there is a promise to pay it back, with interest.

        • vjones

          Treasury Note- in the real world we call these IOU notes. How many times do they go unpaid?

      • Charles O.

        Good luck, with those thoughts

      • BloggerRadio.com

        ANYONE who voted for Trump, and ESPECIALLY anyone receiving SS benefits who voted for Trump is a few fries short of a Happy Meal.

      • Marc

        @Kay: The first thing the Republican Congress did in Jan 2015 once they took the majority of both houses was to vote on a 20% CUT to the benefits paid to SSDI recipients to take effect Jan 1, 2016. President Obama vetoed it and brokered a compromise where we got to keep our benefits intact through this year. He most definitely DID protect our SSDI benefits. You’ll soon learn who cares nothing for the American people and who you can trust to protect anything for you.

      • D W.

        Thanks Kay, I agree with you. We all need to be patient with President Trump (please see my earlier comment saying that). President Trump and his staff have and continue to be on the ground running to affect the changes and improve the lives of Americans. I believe in God and I believe in President Trump and his entire staff; They ARE hard at work.
        BO did nothing to get or even consider a COLA during his 8 year term. 2 yrs ago I think we got 1% this year it was diminished to nearly nothing (sort of a token to keep the troops calmed down.

    • Sandie V.

      It will be better with trump

      • mildred

        Better with Trump I better hope so!!!

      • misery c.

        Not to be rude, BUT ARE YOU FREAKING KIDDING ME?!?! Have you read what his “administration” plans to do with our benefits?!?!

        • AKA

          Yes, nothing. You like to read fake news do you?

        • Mandelbrot S.

          All you should get is the present value of what you have contributed over the years. you should not be allowed to leech off of other people who were forced to pay into the Ponzi Scheme know as Social Security.

          Like most Ponzi schemes, SS was a great thing for people who got into it at the very beginning. But once the scam starts falling apart under the weight of mathematical and statistical facts, current contributors are going to get ripped off — this is already happening as Social Insecurity is considered bankrupt by more than a few financial experts who are not beholden to the Federal government.

          Regards,
          Mandelbrot Set

        • Marc

          “Fakers ews,” like the actual transcripts of the congressional session last Tuesday where they voted 49-49 whether to CUT Social Security, privatize and cut funding to Medicare, and get rid of Medicaid? Yeah, THAT “fake news.” You’ll soon learn who was telling the truth, though it’ll be far too late.

      • BloggerRadio.com

        Enlighten us at how in the world you could have come to such a wrong-headed conclusion!

    • Esther

      We paid our taxes from day one of our working life, but Trump was proud of having used all of the loop holes in the law to not pay taxes for 18 years. Shame on him!
      We will keep him filthy rich, him and his family protected while our S.S dwindles and our S.S workers cont. poorly paid. Nor him, nor Congress have to worry about the cost of living as we do.
      Thank you for the information. We will just keep praying for our country.

      • AKA

        Look at one tax return and draw from that that Trump paid nothing for 18 years, how stupid. Further, he employed thousands of people who did pay taxes and we’re talking about FICA not income tax. Get better informed

      • Mandelbrot S.

        Why shame on Trump for being a very, smart, savvy business person who paid as little taxes as possible under the law.

        The current income tax system favors the very wealthy who can hire dozens of tax attorneys and tax accountants to structure business deals that get tax deferments or tax exemptions. let’s not even talk about how past bad investments can be used as deductions from current taxable income.

        The other people who benefit in a major way from the current income tax system are those who earn almost nothing, but get handouts from the government in the form of EITC (Earned Income Tax Credits). These people can minimax their total income by figuring out just how little they have to work and still get maximum government handouts.

        Regards,
        Mandelbrot Set

        • BloggerRadio.com

          6 Bankruptcies, multiple law suits, multiple marriages, multiple FAILED businesses, taxes he doesn’t pay have to be made up for by other tax payers, why should other tax payers subsidize his business failures? You are misguided and misinformed. Trump if broke. He is so far in debt to foreign interests he is afraid to show his tax returns. Trump is a draft-dodging traitor.

  5. Elizabeth E.

    Thank you for the information on the budget situation.

  6. Ralph G.

    The ‘trust fund’ which we old timers paid into years ago should be used to pay retiree, disabled benefits , not the present worker contributions??

    • Paul W.

      There never was a ‘trust fund’, the system was designed to pay retirees from taxes paid by current workers. It also was not expected to pay for all of the retirees needs but to supplement the retirees own savings.

      • Gina

        @ Paul Williamson, with the cost of everything steadily rising, and the wages of workers constantly being stagnated; who has enough money to save anymore? How do people who lost their savings in the housing debacle [that our banking system caused, BTW] get their relief? I understand saving…but I don’t understand our government allowing our savings to be stolen from us, and then being told we are now on our own. Who is gonna be responsible for the money the banks stole??

        • John

          No one lost any of their savings, they are insured.

          • DaveH

            Apparently you know nothing about a 401(k).

    • Sue C.

      Have to agree with comment. Wish Congress talked like they understood how those funds ended up there in the first place. They need to cut THEIR salaries before messing with our “pensions” . The formula used to determine our COLA needs to be changed as all of our service providers raise their services the COLA amount thus negating any increase we get. Like this year, my social security increase covered the Medicare Part B increase and nothing else. Congress couldn’t/ wouldn’t settle for that either.

      • Ann M.

        Sue C
        You hit the nail right on the head with THAT remark!
        If Politicians were only paid MINIMUM WAGE & had the SAME Medical Insurance as us ” Working class” People.. it would be a WHOLE different Ball Game!
        America is the ONLY Civilized COUNTRY IN THE WORLD that doesn’t HAVE Universal Healthcare.

        • Marie

          Ditto… I am so disgusted . Worked all my life, am age 75, do not qualify for medicaid but cannot afford the terrible co pays for the medication I am forced to be on to actually live.

          • Anonymous

            I know what you mean and feel . I am diabetic taking insulin . I can not afford it even with a 100% insurance coverage . So I will have to stop buying it , I have to eat too . So which one should I choose .

      • D W.

        The COLA this year is / was 3/10 of 1% ( three tenths of one percent.
        And yes it did cover the increase in my Medicare increase. Nice! because my Medicare supplement policy went up mid double digits.
        Hopefully Congress will be able to study the funds, eliminate those who are not eligible (Social Security is NOT an entitlement to those of us who’ve funded their benefits through the mandatory payroll tax implemented during Franklin Delano Roosevelt’s Presidency. It will be refreshing.

    • Cammie

      That is some good shopping Faith! I love the breakdown, I started yesterday, and was just going crazy rebinmeremg to take a damn picture of my food! lol this really makes you think about how much money you spend on food, and really helps me pick the best items for the best prices.

  7. Johnnie L.

    I am grateful Social Security without it ,I would have a difficult time because of the economy. I hope money will always be there for others .

    • Mandelbrot S.

      Social Security is one of the most gigantic, horrendous Ponzi Schemes ever foisted upon the people of the United States.

      There is a reason why many people refer to it as Social Insecurity — they are forced to pay money in in their 20s – 50s, and they know the entire Social Security Scam will be completely insolvent by the time they might actually want to get back some of their money as they approach age 70.

      What we need, if there has to be any government mandated retirement plan is to give every new person entering into the Social Insecurity System a private account, that they pay into and that nobody else can snag money from.

      Think Medical Savings Account, and you’ll get the general idea.

      Ideally, anyone already in the SS system would be able to opt out and receive a check for the present value of what they have been forced to pay into it. There should be no taxes on income from a SS cancellation.

      Thank the powers that be (especially President-elect Donald Trump) that we have a good chance of not being ripped off by Obamacare starting in late January, 2017.

      Regards from someone who can do the math,
      Mandelbrot Set

      • Ann M.

        Bush & Cheney SHOULD be MADE to PAY BACK 3 TRILLION + $$$$ to Soc. Sec. ( for the War in Iraq & NON EXISTENT Weapons of Mass Destruction). BTW: OBAMACARE has NOTHING to DO with Social Security.. It’ Big Pharmaceutical Co.s that jack up the prices of Medicine.

        • Marie

          You are so right about pharmaceutical companies. I have to take multaq and eliquis since my heart surgery and it means “have to” or it could cost me my life. This year multaq’s cost is over $1700 and eliquis is over $1200 and my co-pay for the two is over $400 and of course I cannot do that co pay. I am trusting to get extra help. I do not qualify for medicaid in my state. So yes, put the BLAME where it belongs the billionaire pharmaceutical companies and the medical profession too.

      • BloggerRadio.com

        @ Mandelbrot Set it is you who cannot do the math. You are misguided and misinformed. Your trolling nonsense has zero credibility. Wall Street is THE Ponzi scheme.

      • Patricia r.

        Many ppl again with no insurance. Therefore the uninsured will use the emergency rooms of.hospitals as a doctor’s office. Guess what the government will pay anyway. Think about it.

        • Marc

          Nope, the government doesn’t pay for all those people to go to the ER, YOU do, when they charge everyone with insurance higher rates. This causes the insurance premiums to go up. Plus, the ER has to stabilize you, but they DO still billyou, and if you can’t pay, you’ll be sent to collection, and eventually they get a judgment and you end up filing bankruptcy. And the prices go up again and the cycle starts anew. Yes, let’s make sure 35 million people lose their insurance. And be sure you thank your GOVERNOR for refusing to expand Medicaid in your state when the federal government was offering to pay for it with the ACA money obtained from slightly increasing the taxes on the very few wealthy. The obtuse and stubborn refusal of people to learn the truth is astonishing.

          • D W.

            Social Security was, has been, and is a good plan. It’s just that they, Congress or the powers that be, need to get it back to what it used to be. People who’ve never paid into the system should NOT get a dime. Many people who’ve worked 30, 40, 50, or 60 years paying into the system deserve their proper amount based upon time worked IN THE SYSTEM.
            Additionally, I wonder why or how the Obama Care thing was / has been called a success with around 30 or so million people enrolled and getting services with associated fees they need to pay. Last I read a month or so ago, America’s population is approximately 300 million individuals. I don’t get the math ratio there. Congresswoman Nancy Pelosi still sings its praises. Wonder if she ever read any of the Obama Care documents; “We have to implement it to know what’s inside of it.”

      • Ljoynich

        Just give it time and Trump’s Alonzo Scheme will bankrupt the government and he’ll walk away with all the money. Notes from a mathematician.

        • D W.

          Please Give Our New President Donald Trump a chance to work on it. He’s only been President a few weeks. It’s impossible to do everything at once! He’s already been working day and night on many issues. Appointed Cabinet members and other White House staff are all digging in and working hard for the American people. Please be gracious and kind to them; treat them as you would like to be treated. They do NOT deserve to be bashed verbally or kicked to the curb.

  8. Margaret C.

    I’m sorry to hear that Congress has not allocated enough funds to pay for the extremely important work you are doing for Americans. I hope this issue will come to public attention so that Social Security and its administration will receive better support in 2017. Thanks so much for what you do for all of us.

    • SHERRY K.

      Well said!

      • bettyg

        ditto on margaret’s comments above.

        also, if majority of us would NOT be turned down 1st time applying for SSDI work benefits when we have SUBSTANTIAL MEDICAL RECORDS EVIDENCE, your staff would not have to continuously work on our ssdi claims!

        it took me 5 yrs. and 2 claims to be approved. my medical files were 2.5 inches think!!

        just 1 way of utilizing your staff better.

        i’ll never forget 1 of your employees also calling me at 7 am waking me up out of a sound sleep when i was also having severe sleeping problems too. who can be coherent at 7 am? grrr.

        bettyg, iowa

        • misery c.

          Yup!

        • John

          SS employees do not make or participate in the medical decisions. An agency of the State in which you live makes those decisions. SS employees don’t call people at 7 am, they don’t even get to work at that time.

          • Nathan

            John, I got to work at 7 this morning. Its the earlies start time for many SSA offices. But I make sure not to call people before 8 ?

        • Sampa

          Why did you sleep so late? You should have already been awake and out of bed.

        • Sampa

          Why did you sleep so late? You should have already been awake and out of bed and ran errands too.

    • Keith

      I agree. Well said. Good luck to all of you and thank you for everything you do.

      • R.F.

        We appreciate your feedback, and thank you for your support!

  9. Jeff G.

    Good Luck

  10. Bob B.

    Good luck! Join a Union!

    • John

      They are unionized. Federal Unions are restricted in what they can negotiate and this is one of them. We have had hiring freezes and staff reductions since the mid 90’s, so this is nothing new. 20 years ago we had the same backlogs. Whenever we increase efficiency through automation, such increases are not used to reduce backlogs, what happens is further staff reductions.

      • Dale H.

        What has happened to all of the money that has been put into the social security trust account over the years?

        • J.Y.

          Hi Dale. Social Security is a pay-as-you-go system. Social Security taxes collected from today’s workers pay the benefits of today’s retirees. Any funds in excess of what is needed to pay today’s benefits are invested in special issue, U.S. Government, interest-bearing securities. This investment – the purchase of U.S. Government securities – is what constitutes the “borrowing” that people are sometimes concerned about. Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest. Please check out our Trust Fund Frequently Asked Questions page for more information.

          • D.H. F.

            Thanks. I’ve often wondered about this.

          • Joe W.

            That is not true about borrowed money always being paid back. In fact it hasn’t been and it was a big issue in the 2000 election. This is where Al Gore was proposing a lockbox system to keep excess trust fund money from being borrowed and not repaid.

          • T.C.

            Jenna, in 2011 SSA stopped mailing statement altogether saying the agency lack of funds. Then due to public outcry about the lack of information to the very workers funding SSA. In 2014, SSA began mailing only ever five year to workers at ages 25, 30, 35, 40, 45, 50, 55 and 60 who aren’t receiving retirement benefits and do not yet have a My Social Security account.

            Now again, the SSA is only going to mail paper Social Security Statements to people age 60 and over, who are not getting benefits and don’t have a My Social Security account.

            This is unacceptible. How are those of us paying into Social Security supposed to “Find value” in Social Security when we don’t get a statement of benefits until its too late to matter. SSA biggest expense are wages paid to employees. Instead of eliminating statements to the tax payers, eliminate some or all of the unnecesary bureaucrats. It will save many more dollars. We the people are getting fed up with continuing to get over taxed and under appreciated.

        • William F.

          Check Congressmen & Congresswomen’s pockets and purses. (LOL) The pockets should be empty of SS benefits since they don’t contribute!!

        • Joe W.

          it is not supposed to be a pay-as-you-go system. In fact Congress has borrowed 5.9 trillion dollars from our trust funds over the years. We the People demand Congress repay this debt. We paid into this system on the proposition that we had insurance for disability and old age. You owe us this because we paid for it. Just as any company sewing a product must make it good, so should the government make Social Security good. They can borrow 9 trillion dollars to keep the shareholders of our traffic medical system whole when they take Obamacare apart, they can also issued new debt to pay us back the 5.9 trillion dollars to the trust fund

        • D W.

          Look at the history of Social Security and you will learn that during Lyndon B. Johnson’s term Congress decided to utilize / sidetrack Reserve Social Security Benefits as a “new welfare” benefit. People came into America in droves to get the assistance.

        • Steph

          Congress has “borrowed” from Social Security at least 3 times during my lifetime and never paid it back…although I was told by someone else they actually “borrowed” 5 times.

          So Congress is your culprit. I was in my teens the first time they did that and my grandmother had a hissy fit over it.

          They never should have allowed this to be a part of the “budget” that they can access for other purposes. It should have remained in separate accounts so that nobody could steal it!

          • R.F.

            Steph, Social Security is a pay-as-you-go system. Social Security taxes collected from today’s workers pay the benefits of today’s retirees. Any funds in excess of what is needed to pay today’s benefits are invested in special issue, U.S. Government, interest-bearing securities. This investment – the purchase of U.S. Government securities – is what constitutes the “borrowing” that people are sometimes concerned about. Any funds that have been “borrowed” from the Social Security Trust Funds have always been paid back in full, plus interest. Please check out our Trust Fund Frequently Asked Questions page for more information. Thanks!

    • Tony S.

      If the local offices are losing jobs to my Social Security ego, administrative costs had better go down, we don’t want my Social Security to profit from depriving anyone of their relief benefits (steal), even if administrative law judges and their paralegals of the same moral calibre as the Acting Commissioner of the MJ estate, are really so invasive they are equally useless as a homeless shelter purchasers of today’s snowflake. The only budget cuts Social Security is suffering from is the fact that you are cutting class and not doing my Social Security Amendments of January 1, 2017 http://www.title24uscode.org/ss2017.htm

    • ALjojo

      Publicize the website for anyone to create their account and seek that information whenever they wish. That is how the private sector successfully works. This should have been done years ago; everyone under 60 uses electronic devices.

      • Ann

        They do? They have a huge ad campaign.

      • D.H. F.

        The poor often have no Internet access.

        • DaveH

          The public library is free.

          • Joe W.

            They have old computers that do not have voice access. Times are limited to 30 minutes so people like me only have one usable hand can barely get signed in before time is up. And no the street is not crawling with Good Samaritans who will come to the library with me so I can use it. What about the people who had strokes and lost use of both hands or live in towns without Public Library. Got a snap answer for them

      • Marc

        @ALjojo: I’m, this WAS done years ago. Social Security and in fact every department and agency of the federal government has had incredibly informative websites up and running since he Internet began. I personally setup an account here and with Medicare nearly 10 years ago, and I’ve been using other government websites for far longer. Kind of unfair to blame SS or the “government” when the information has been there but people just don’t bother to look. And it has been publicized as well; all calls to any government agency, including SS, tell callers that in the first minute of their answering recording. Americans have to start stepping up and taking a little responsibility. Everyone screams for “smaller government” and then complains that it’s not doing enough for them or just the opposite. that it’s a “nanny state,” telling them what to do. Just no pleasing people. Complaining and blaming have passed football for the favorite American national pastime.

    • christina

      Please improve the Ticket to Work Program to help the Disabled become more self-sufficient independent.

      • Latoya

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