Invisible Social Security Cuts: Now You See Them, Now You Don't

The unseen hand of anti-government ideology can be found everywhere nowadays -- even in your mailbox. The proof is in what you  won't  find there, like your annual statement of earned Social Security benefits.

The government stopped mailing those out in 2011.

It's also getting a lot harder to find Social Security field offices, or even to find someone to pick up the phone, as the Social Security Administration enters into yet more rounds of steep budget cuts.

Social Security customer service: Now you see it, now you don't.

The most efficient benefit program in the country?

The question is, why? Social Security may be the single most efficient benefit program -- public or private -- in the country. Its annual operating expenses are less than 1 percent of overall costs, a figure which private sector programs should envy. In fact, that percentage has plummeted over the last 50 years, from 2.1 percent in 1963 to 0.8 percent today. That figure could be increased significantly without substantially changing the plan's overall fiscal outlook.

(By comparison, 401(k) plan managers charge an average of 2.5 percent, and that's not counting enrollment costs and other expenses which are borne by employers -- and they performed no better than the stock market as a whole on average.)

It's certainly not a "deficit" issue. Social Security is completely self-funded from contributions earned by benefit plan members. It draws no funds from the overall federal budget. That means the only people hurt by these budget cuts are the same people who paid for these benefits -- and the services needed to deliver them -- in the first place.

An ideological crusade

All the evidence points to one conclusion: these cuts are motivated by ideology, not genuine concerns. The SSA's administrative expenses don't affect the Federal debt, and are a small fraction of Social Security's overall costs.  These cuts aren't actuarially warranted, since they only minimally affect the program's long-term fiscal outlook.

Congress has cut 14 out of the last 16 SSA budget requests. There's only one rational explanation for that: a hostility toward government itself, combined with the determination to place more public resources in corporate hands through "privatization."

It's a simple game. Slash funding for well-run government programs, then use the resulting chaos as "evidence" that "government isn't the solution, it's the problem." It's simple -- and relentlessly cynical.

The damage done

In an excellent report for Reuters, Mark Miller surveyed the damage this strategy has caused: "... sharp reductions in SSA staff and field service offices. Nationwide, staff is down to 62,000 from a peak of 70,000 in the 1990s. Since fiscal 2010, the agency has consolidated 92 field offices into 46 offices and has closed 521 contact stations (mobile floating service facilities that set up shop in other government offices)."

Busy signals on the SSA's phone lines doubled last year.