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Summary

The Social Security Administration (SSA) administers the Social Security program (Old-Age, Survivors and Disability Insurance, or OASDI) and the Supplemental Security Income (SSI) program, and provides administrative support to Medicare and several other federal programs. Total SSA spending in FY2006 was about $597 billion, 98% of which was mandatory spending on benefit payments. This report focuses on SSA's spending for administrative expenses, which is discretionary and amounts to 2% of SSA's total spending. This funding is provided in the Labor, Health and Human Services, Education, and Related Agencies appropriations bill. In FY2006, SSA's total administrative expenses were about $9.2 billion. Almost half of this funding was for administering Social Security (OASDI) benefits, 30% was for administering SSI benefits, 20% was for providing administrative support for Medicare, and another 1% was for SSA's Office of Inspector General (OIG). (The OIG has its own account; all of the other funding is included in the Limitation on Administrative Expenses (LAE) account.) SSA's administrative budget has increased about 23% from FY2002 to FY2007 (or 7% after adjusting for inflation). As of this writing, SSA's FY2008 appropriation has not been finalized. Over the past several years, SSA's administrative responsibilities have increased, creating pressure on the agency's budget. Two major factors have contributed to SSA's workload: (1) legislative changes related to Medicare and (2) growing benefit rolls, which are expected to increase further as the baby boomers retire. As the SSA workload has increased, so too have backlogs of pending disability claims and hearings. Additionally, the number of SSI redeterminations and Continuing Disability Reviews (CDRs) SSA has completed has declined substantially. These reviews determine whether current Social Security and SSI beneficiaries continue to be eligible for benefits, and save money over the long term. This report will be updated as events warrant.

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