Senate appropriators propose $500 million budget increase for Social Security overhead

The Senate Appropriations Committee on Thursday advanced spending legislation that would increase the Social Security Administration’s administrative budget by $500 million, setting up a standoff with the House.

Since the George W. Bush administration made overhead costs for the agency responsible for administering the two largest pieces of non-discretionary federal spending—retirement and disability benefits—part of the discretionary budget, SSA’s annual budget has been contained in the Labor-Health and Human Services, Education and Related Agencies appropriations bill. Although Congress sets the agency’s administrative funding levels each year, the money comes from federal payroll taxes, not the U.S. Treasury.

Senate lawmakers unveiled and voted 25-3 to advance the Labor-HHS spending package Thursday. Although the bill text was not available at press time, a summary provided by the appropriations committee announced that under its provisions, the Social Security Administration would receive a $500 million increase over current funding levels, or $14.7 billion, in fiscal 2025.

That figure would fall short of the $15.4 billion requested by the Biden administration in the president’s fiscal 2025 budget proposal, but it is around $1 billion more than the $13.7 billion slated for the agency under the GOP-controlled House’s version of the legislation.

“This bipartisan bill also delivers funding to help protect workers’ rights and ensure they get the paychecks they are owed, and it will help reduce wait times for Americans simply looking to get the Social Security benefits they have earned," said committee Chairwoman Patty Murray, D-Wash., in a statement.

The three senators to vote against the appropriations bill in committee were Sens. Joe Manchin, D-W.V., Bill Hagerty, R-Tenn., and Deb Fischer, R-Neb.

SSA Commissioner Martin O’Malley went to Capitol Hill last spring to advocate for sustained increased spending on the agency to counteract a decade of stagnant budgets in the face of an ever-mounting workload that has left the ratio of administrative costs to paid benefits  at 0.95%, well short of its 1.2% target, and the lowest staffing levels in nearly 30 years. O’Malley called the Senate’s proposed appropriation for the agency a “rebuke” to the $450 million spending cut proposed by the Republican-controlled House in June.

“There’s a growing awareness among many in Congress that the staff reductions at Social Security is really hurting the level of customer service that people have already spent their whole lifetimes paying for,” O’Malley told Government Executive. “[In] the Senate, that realization is much broader and much deeper. That was a very strong bipartisan rebuke to the Aderholt half-billion dollar cut in the House.”

House Democrats and union officials at the agency have warned the proposal led by House Appropriations Committee’s Labor-HHS Subcommittee Chairman Robert Aderholt, R-Ala., would exacerbate SSA’s existing customer service crisis, leading to field offices closing and shorter hours at locations that remain operational, and longer wait times across all of its services to the public. And the agency’s workforce attrition rate would continue to climb, further compounding the problem.

Although O’Malley said he had a productive conversation with Aderholt Wednesday, he took issue with GOP committee leadership’s claim that the cut would come entirely from the agency’s Baltimore-area headquarters due to “reduced in-person staffing,” noting that under a policy he implemented last February, all headquarters staff are required to be in the office three days per week.

“Maybe he was given bad info by staff, but he claimed [the funding cut] would come entirely out of headquarters staff in Baltimore and Washington, where he said 61% of employees are fully remote,” O’Malley said. “That is false. Our fully remote workforce is 1.3% of our entire agency, and they’re usually fairly specialized people. Federal government-wide, that number is 8%.”