Baucus Calls on Congress to Fund Social Security’s Efforts to Improve Program’s Long-Term Finances

Finance Chairman: Smart Investments to Prevent Overpayments Will Return Money to the Trust Fund

May 22, 2012

At a Senate Finance Committee hearing held today, Chairman Max Baucus (D-Mont.) said the Social Security Administration (SSA) must have the resources it needs to curtail improper payments in order to improve the program’s long-term financial outlook. Baucus noted that every dollar invested in efforts to reduce improper payments results in between six and ten dollars in savings – returning tens of billions of dollars to the Social Security Trust Fund over the next decade. He also said SSA needs to keep working to reduce the backlog of disability hearings.

“No federal program touches more American lives and benefits more American families than Social Security,” Baucus said. “We need to root out improper payments in order to protect Social Security for the long-term. Controlling improper payments saves tens of billions of dollars – that’s money seniors need. Federal budgets are tight across the board, but smart investments to improve Social Security will improve the program’s long-term financial outlook. And the backlog of disability claims is now at a record high, and that means people can be left waiting years for a hearing. That’s unacceptable, and we have to do better.”

In the 2011 Budget Control Act, Congress reinstated the “cap adjustment” that provides funding SSA uses to conduct Continuing Disability Reviews (CDRs) and Supplemental Security Income (SSI) redeterminations, which are reviews that ensure beneficiaries are still eligible for the benefits they receive. The cap adjustment means the funding that goes to these reviews does not count against the caps that would otherwise limit SSA’s budget. The Office of Management and Budget estimates that every $1 spent on CDRs yields $10 in savings and every $1 spent on SSI redeterminations yields $6 in savings.

Fully funding the reviews saves Social Security nearly $50 billion over the next decade, but Congress still needs to appropriate the full amount of those funds. It left $140 million on the table for fiscal year 2012, which would have yielded over $800 million in long-term savings. Baucus urged Congress to grant the President’s request to appropriate that leftover $140 million along with the new cap adjustment for 2013. He said failing to provide the full amount for reviews in the short term winds up costing billions more in the long term, needlessly decreasing Social Security’s solvency.

The witness at today’s hearing, Social Security Administrator Michael Astrue, came before the Committee in 2007 and pledged to Chairman Baucus to tackle the disability backlog problem. SSA’s efforts have shown progress. The average processing time – the period between an individual appealing a decision and receiving a hearing – has decreased. Between 2008 and 2011, the average processing time dropped from 514 to 360 days. Baucus urged Commissioner Astrue to meet SSA’s goal of lowering the time to 270 days by the end of fiscal year 2013.