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Budget Deal Gives Policymakers Another Chance to Fund Social Security Technology Improvements

Now that Congress has agreed to raise the caps on discretionary spending in 2018 and 2019, policymakers have another chance to adequately fund technology upgrades that would improve the Social Security Administration’s (SSA) payment accuracy and prevent fraud. The 2015 Bipartisan Budget Act (BBA) required SSA to make some of these improvements, but it didn’t provide the agency with all of the necessary funding to make the technology upgrades that would bring about these improvements. In addition, policymakers have cut SSA’s budget in recent years even as demands on the agency have reached record highs (see chart).

Now, with a larger pot of discretionary dollars, lawmakers should reverse SSA’s cuts and invest in the BBA’s common-sense improvements — particularly short-term IT improvements to streamline SSA benefit administration, which would generate long-term savings for taxpayers.

Past budget cuts have forced SSA to freeze hiring, close field offices, shorten field office hours, and reduce the number of Social Security statements it sends out. And as SSA increasingly struggles to provide basic services to the public, it also struggles to assume new work that the BBA requires. Thus, SSA has implemented some of the BBA’s common-sense improvements more slowly and less fully than if the agency had received adequate funding — ultimately generating fewer savings than they could have.

Here are three key BBA provisions that require a short-term IT investment to generate long-term taxpayer savings:

  • Electronic payroll data sharing: Some Social Security beneficiaries — for example, early retirees and Social Security Disability Insurance (SSDI) beneficiaries who work — must report their earnings to SSA. When beneficiaries don’t report their earnings promptly, overpayments occur. In fact, delayed or inaccurate earnings reports are a leading source of overpayments. The BBA authorizes SSA, with beneficiaries’ permission, to gather earnings data directly from payroll providers. This saves time for both beneficiaries and staff and improves the timeliness and accuracy of earnings reports, reducing overpayments and saving money.
  • Electronic wage reporting: The BBA instructs SSA to create a tool for SSDI beneficiaries to report their earnings electronically, both over the phone and on the Internet. This, too, would save time, speed processing, and improve accuracy — ultimately reducing overpayments and saving money.
  • Bank account information sharing: SSA sometimes overpays benefits. If the beneficiary isn’t at fault and can’t repay the funds, he or she may request a waiver. The BBA lets SSA use its Access to Financial Institutions process to automatically verify whether a beneficiary can repay. Using this system, SSA asks banks to verify account balances and detect undisclosed accounts. With more accurate information about beneficiaries’ financial status, SSA can recover more overpayments.

These worthwhile initiatives each require investments of money and staff time to do things like set up data-sharing agreements, arrange and pay contracts with private companies, update SSA software, and train employees to use the new data. While SSA works to implement these initiatives, it also faces other large IT workloads, such as updating its antiquated and inefficient systems. The agency can fund only so many investments at once on a very tight budget. With additional funding, SSA could implement BBA improvements faster and better — ultimately saving taxpayer money.