Taxes

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

January 9, 2017 • By

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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. Cindy G.

    I still don’t understand how you determine the amount a person will receive. I worked for about 15 years total, for the government. I paid into social security. Then I quit the government job and stayed home with my kids for a couple of years. When I tried getting back to the work force, I got hurt on the job and had to file for disability. I never thought I would one day be trying to live on $750 month… Don’t get me wrong. I’m thankful for that but I would rather be earning the money I was living on then, than trying to make it with food stamps, Medicare, the HEAT program, and housing. I have friends who didn’t work half as long as I did and they are getting a lot more from social security. How does that work? Thank you for your hard work and maybe you can find time to explain this subject a little more.

    • AKA

      It is not just how long you worked but how much was paid in.

      • Mandelbrot S.

        And exactly when it was paid in, at least as far as Disability Benefits go. There is a very contrived formula used to determine whether you past payments into the scam will allow you to get any benefit is you are actually disabled.

        I made a very conscious decision a few years ago: I will never expect any payback from any system the government forces me to pay into, allegedly for my own benefit.

        I could do far better by investing the same amount the government extrots from me in an S&P500 Index Fund and drawing upon the proceeds from that fund as I retire.

    • J.Y.

      Hi Cindy. Thank you for your question. If you receive a monthly pension from work where Social Security taxes were not taken out of your pay, or if you previously received it in a lump sum payment, the Windfall Elimination Provision (WEP) can affect how we calculate your benefit amount, resulting in a lower Social Security benefit than you otherwise would receive. A pension based on work that is not covered by Social Security (for example, Federal civil service and some State or local government agencies, such as police officers and some teachers) may cause the amount of your Social Security benefit to be reduced.

  2. JD W.

    I always paid higher taxes then I had to when I was working and plan on doing the same again. I never intended to be out of work this long. Trust me, it’s way more work to not work than it is to just be working. It’s just so hard to get back inside the work fields with so much empty space on resume about what you’ve been doing and my last: job let me go saying I was too slow and had an attitude which is crazy because I was singing Christmas songs to Jesus, I guess singing Amazing Grace in a warehouse near Reno is considered an attitude problem in these last days…
    I plan on paying back all my taxes just having a real hard time getting car situation so I can be reliable to work in freezing weather, rainy weather, snow or hopefully moving closer to where I can be a father again. Thank You, ssdi for all the help and patience, I promise to try and do better in efforts to be self efficient and help others to do the same in near future, just real hard getting started and I really didn’t expect this top be toso hard to go back into work.
    JD Wilcox

  3. John B.

    My $5.00 COLA raise went to pay the $5.00 Medicare payment, so I gained nothing.

  4. Jeannette B.

    I was employed 8 years with SS and am waiting to reup again but hiring hasn’t happened yet. I’m afraid THOSE WHO HONESTLY QUALIFY will probably die waiting for benefits paid in.

  5. VASPURSFAN

    Look, IF Congress were to return the $$ they “borrowed” from SS the trust fund would be solvent beyond the year 2110.
    Think about how our conflicts, wars and social programs have been paid for and it stands to reason that it was paid for by the 6.2% tax on our pay.

  6. Robert Y.

    Regarding Medicaid If we could get Fathers to pay child support regularly that would help the system.

    • AKA

      Medicaid has nothing to do with SS or Medicare.

  7. vern

    And what about the congress voting themselves a pension of $15,000.00 a month after serving only one term in office without public notice!. Most of them are already millionaires…

  8. vern

    Stop paying benefits to people who have not paid in as our potus has done..Must work ten yrs. before receiving benefits. Reinstate the cost of living formula’s of 15 yrs ago.. We paid in all these yrs. not to be denied our money back.THis is a Ponzi scheme wost than Madoff’s…

    • misery c.

      I never looked at it this way, great point!

    • Mandelbrot S.

      Hehehe,

      Do you really think that Trump even noticeed the grand or two he might collect under Social Insecurity? He did the smart thing and built his own retirement plan…a very good pla that lets him become POTUS without even needing the $400K per year that recent Presidents have had as income. (I am not sure if Trump or any previous President was able to refuse any compensation for his work outright, but accepting a token $1 would make most Presidential employment agreements work, so I’ve heard from people who are more expert about that part of the Law than I am.

    • BloggerRadio.com

      Wrong AGAIN genius.

      https://www.ssa.gov/history/InternetMyths.html

    • Ann

      There are no special rules. Everyone, including the POTUS, needs to work and pay FICA taxes to be eligible.

  9. bess y.

    God bless us all with the incoming administration trying to take our benefits away. You work very hard for us and without Social Security I would be homeless. I am not alone.
    Keep up the excellent work.

  10. Norma C.

    I’m trying to get my money back to what it was before S. S. Made a mistake and gave me a L. E. P. Then my ASRS also lowered my income because of the L. E. P. Now how does one get the correction done..
    this is to me fraud. Any help out there??

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