Republican members of the House Appropriations Committee have recently voted to cut $500 million from the Social Security Administration (SSA) budget. It is important to understand that these cuts will not subtract even a penny from the deficit.
Those Republican cuts will, however, undermine SSA Commissioner Martin O’Malley’s tireless and laudable efforts to reduce wait times for disability decisions, retirement claims and waiting for calls to be answered. Those cuts will not reduce the deficit, but they will create obstacles to the American people’s ability to claim their earned benefits.
Social Security, including all of its associated administrative costs, does not add even a penny to the deficit. Those expenses are paid entirely from Social Security’s dedicated revenue, which comes primarily from the paychecks of working Americans.
Currently, Social Security has an accumulated surplus of over $2.7 trillion. It spends less than a penny of every dollar on administrative costs. That is orders of magnitude more efficient than what private-sector retirement plans or insurance companies spend to provide their counterpart retirement annuities, life insurance and disability insurance.
Congress doesn’t appropriate a penny for Social Security’s administration. Rather, it limits how much of Social Security’s reserve SSA can spend on........