I have read many articles about Republican plans to cut Social Security, but I thought they would happen down the road, if at all. It turns out that cuts to Social Security are in the works for this year – and they will affect people who are currently on Social Security.
I was reading the Time Goes By blog which is written by a retiree who worked for many years as a journalist. I think she goes by the name “Crabby Old Lady”.
Here is some of the post:
The House budget for fiscal year 2011, passed in the wee hours of Saturday morning, calls for about a $1.7 billion cut to Social Security. But wait.
If you have been following Time Goes By posts about the program over the years, you know that Social Security is self-funded, including administrative costs. So what gives? How come Congress can cut those administrative costs?
Here is how: Social Security and SSI benefits are mandatory spending, meaning they are authorized by permanent law. They can be changed under certain circumstances, but that is not what is at risk right now.
Administrative costs, which have remained at about one percent of revenue for many years while providing excellent service, are discretionary spending. This means they are subject to the annual appropriations process (the budget) and Congress can change the amount every year affecting the number of employees and therefore, level of service.
Right now, because the government has lacked a budget for FY2011, administrative costs are frozen at 2010 levels – $11.5 billion – and the House budget cut of $1.7 billion, passed over the weekend, would leave only $9.8 billion.
The National Committee to Preserve Social Security and Medicare (NCPSSM), in a 18 February letter to Congress, pointed out what this cut means to the program:
“It means having to wait longer to get an appointment to file for benefits. It means not receiving a decision in a timely manner. It means getting a busy signal when you call an office or the Agency’s toll-free 800 number telephone service.
“It means not having your change of address or direct deposit information processed in a timely fashion.
“And finally, it means significant employee furloughs or even office closures, resulting in even greater degradations of service to America’s seniors.”
If the federal government shuts down, non-essential employees cannot go to work. Last week, both the president and House Minority Leader Nancy Pelosi said Social Security checks would be delayed, and that would almost immediately affect those of us (about half of Social Security recipients) who receive our Social Security direct deposits or checks on the second Wednesday of the month (9 March).
If your monthly budget is as tight as mine, that is a disaster. Sure, I can eat, but some people won’t. And depending on how long a shutdown lasted I, like many others, couldn’t pay some bills on time. The 1995 “Newt Gingrich shutdown” lasted five days and Congress is much more polarized this time.
So in preparation, I’m arranging to transfer some money from elsewhere into my checking account. What about you?