Please ensure Javascript is enabled for purposes of website accessibility Social Security funding turmoil: A hiring freeze and union push for supplemental funding - Brown & Brown Absence Services Group

Written by Megan Reid, Vice President, Account Management Operations
Few governmental services play a more direct and vital role in the lives of millions than the Social Security Administration. However, as has been the situation for a number of years, funding challenges have cast a shadow over its operations.

The Social Security program and certain aspects of the Medicare program are funded by resources allocated through the Social Security Administration’s administrative budget. The administrative budget provides resources to pay the salaries and benefits for federal Social Security and state Disability Determination Services employees as well as other expenses, such as office rent, support for the national 1-800 number, and IT-related costs. While Congress does not control benefit funding, Congress does allocate funding for the administrative budget through appropriations. On January 18th, Congress passed a third continuing resolution for Fiscal Year 2024, extending funding for Social Security from February 2nd to March 8th. The Social Security Fiscal Year began October 1st, 2023, and since then, has had a hiring and overtime freeze in place until the comprehensive budget is finalized.

The impact of Congressional limitations
Over the past decade, Congress has imposed limitations on Social Security’s expenses, resulting in Social Security failing to meet the growing needs of beneficiaries amidst the loss of 10,000 workers. In 2010, Social Security was ranked the 2nd best place to work amongst large federal agencies, but in the years since, it has fallen to the lowest ranked out of all 17 agencies in the category. Attrition rates continue to rise, and a recent poll of current workers uncovered that over 50% of employees plan to leave the agency within the next year. Last fall, then Acting Commissioner Kilolo Kijakazi was quoted in a Federal News Network article affirming that in Fiscal Year 2023, Social Security hired 7,800 employees but only increased headcount by 3,200 employees after factoring retirements and agency attrition. The impact of these combined factors has been felt at all levels of Social Security and the beneficiaries that rely on these services.

    • Initial disability claims processing time has increased by 99% since 2018, from 111 days to 221 days as of July 2023.
    • Average wait times for calls on the national 1-800 number have increased by 115% since 2019, from 20 minutes in 2019 to 43 minutes as of June 2023.
    • The disability claims pending at the state-run Disability Determination Services now exceed 1 million.
    • Social Security has more than 1 million internet claims pending, with only 900 employees at the workload support units to process these claims.
    • Disability reconsideration processing time has increased by 78% since 2018. It took an average of 102.7 days in 2018, rising to 182.7 days in Fiscal Year 2022.
    • There are now 4.2 million backlogged items pending at the seven Payment Centers.

Once a final budget is passed, the current hiring freeze, impacting all hires and overtime restrictions in Fiscal Year 2024, will be lifted, and Social Security will be positioned to advance hiring initiatives. Regarding Disability Determination Services hiring, the approach varies from state to state. Some states may elect to hire out of their coffers and wait for reimbursement, while others will only hire once there is clarity relative to reimbursement, budget, and timing.

A push for supplemental funding
In an attempt to address these service and workforce challenges, the American Federation of Government Employees (AFGE) is calling on Congress to step up and provide an influx of $20 billion in supplemental funding for the Social Security Administration over the next decade, a number AFGE Council 220 President Jessica LaPointe states that this is the necessary amount to reach the quality of service levels needed. Although this number is substantially more than any amount allocated through regular appropriations channels, this is deemed the amount needed to ensure adequate staffing levels and that Social Security has the funds to provide services such as childcare and student loan assistance, benefits already provided by nearly every other federal agency.

While a large figure, this number is not unheard of when it comes to federal funding and is well below the $80 billion supplemental funding allocated to the IRS through September of 2031. The AFGE suggested that the supplemental funding could be allocated as follows:

    • $2.5 Billion: Replace the 10,000 workers lost since 2010.
    • $3.2 Billion: Alleviate recruitment and retention issues by implementing competitive benefits.
    • $3 Billion: Modernize technology, including phone line interfacing options with other government agencies.
    • $2 Billion: Increase field office security to address the increasing severity and volume of threats employees face from frustrated customers.
    • $9.3 Billion: Increase resources to be able to hire additional staff to mitigate issues such as the $21.6 billion incorrectly issued overpayments and prevent future overpayment issues.

The challenges faced by Social Security underscore the delicate balance between funding constraints and the essential services it provides. The impact on employees and beneficiaries is discernible, with increased processing times and a growing claims backlog. With budget and hiring challenges at the forefront as Commissioner Martin O’Malley takes the helm, we remain hopeful for positive change and a future where Social Security provides prompt, compassionate support.

Brown & Brown Absence Services Group will continue monitoring the status of government funding and any Congressional actions taken in the upcoming weeks; we will report on any significant findings. If you have any questions about the impact the federal may have on Social Security benefits, please reach out to us directly.