The Veterans Affairs Scandal and Plans for Downsizing the Social Security Administration
by Guest Blogger, 6/3/2014
originally posted by Dean Baker, Center for Economic and Policy Research, on June 2, 2014
The media have been rightly focusing their attention on the long waiting lists for veterans seeking medical care, and even worse, the Department of Veteran's Affairs cover-up. Unlike President Obama's birth certificate and the attack on the consulate at Benghazi, delaying or denying care to veterans is really a scandal.
Naturally the Republicans will try to extract their pound of flesh in publicly embarrassing the Obama administration. That is the nature of politics, but if the investigations are pursued honestly, the result will be increased resources to the VA health care system so that delays can be eliminated and it can provide the high quality care for which it has become known.
Unfortunately the VA system is not the only part of the government where essential services may be threatened by cutbacks. The Social Security Administration (SSA) has recently disclosed plans for a major downsizing that will result in the closing of many more of its field offices. The goal is to handle the bulk of Social Security's requests, questions, and complaints through the Internet.
While it's important and desirable for SSA to have an Internet site that can address most problems, the reality is that there are many people who do not feel comfortable using the web. This is especially true among beneficiaries of Social Security and disability, who almost by definition are older than the population as a whole, and often in poor health.
And the dealings these people have with SSA are important. Social Security provides the majority of income for the overwhelming majority of beneficiaries, and it provides more than 90 percent of the income for 40 percent of beneficiaries.
This isn't an issue like not being credited with frequent flyer miles; if beneficiaries are not getting a check to which they are entitled that means not having the rent money or being able to pay the electric bill. Just as with veterans not getting health care, this is not a case where we can afford mistakes. We have to make sure that the system in place works.
In addition to ensuring that beneficiaries get the benefits to which they are entitled, there is an additional reason for making every effort to minimize the administrative mistakes in the Social Security system. There is considerable hostility to the Social Security program. This hostility doesn't only come from right-wing Fox News types who hate every government social program; it also comes from many centrist organizations like the Peter G. Peterson Foundation and its various offshoots and media outlets like The Washington Post.
These organizations will be happy to seize on bureaucratic mistakes as a way to attack Social Security. Last year, The Washington Post ran a major front-page article over the fact that 0.006 percent of Social Security benefits in the prior three years had been paid out to dead people. Of course the Post never told readers that the amount in question amounted to less than one hundredth of one percent of benefit payments. Instead it highlighted the size of the mistaken benefits, $133 million, as though it had uncovered a momentous sum that the program was paying out in error.
There is no reason to expect the opponents of Social Security to be any more honest in the future. Every mistake that the program makes will be highlighted. For this reason, it is not only essential that we minimize the instances where people don't get the benefits to which they are entitled; we should also be concerned that the SSA has the capacity to keep a lid on improper payments.
SSA is already tremendously efficient compared to its private sector counterparts. Administrative costs for the system as whole are just 0.9 percent of benefits. The administrative costs for just the retirement and survivors' portion of the program are 0.5 percent of benefits. Privatized systems in places like the United Kingdom or Chile have costs that are twenty times as high.
It's great to look for savings that still preserve the quality of the service provided by SSA. But a route that will make it difficult for beneficiaries to talk to a human being doesn't fit the bill. That path virtually ensures some future scandal with large number of seniors losing their housing and being unable to pay for food because the SSA did not properly file their claim.