Social Security braces for budget cuts, frustrated public

Checks will arrive on time, but nearly every other task the Social Security Administration performs — from answering phones to determining eligibility for claims — will be delayed if Congress fails to stop steep federal budget cuts from taking effect this week, officials warned Monday.

The Woodlawn-based agency is bracing for a cut of roughly 8 percent to its $11.5 billion budget if Congress does not avert the government-wide reductions known as sequestration. Officials say the cuts would leave people who call the agency's hotline on hold for 10 minutes and delay some disability decisions by a month.

"We're already getting a lot of reports of increasing anger from the public" since hours at the agency's call centers were shortened to save money, said Witold Skwierczynski, president of the Social Security Council of the American Federation of Government Employees. "People are upset."

With only four days to go before $85 billion in across-the-board spending reductions are set to take effect, the Obama administration continued to paint a dire picture of how the cuts would affect dozens of education, health and safety-net programs and the economy as a whole.

The impact will be felt hardest in states such as Maryland and Virginia that have deep economic ties to the federal government. In Maryland, federal spending on goods and wages makes up nearly 20 percent of the state's economy, according to the nonpartisan Pew Center on the States.

In addition to the possibility of hundreds of thousands of furloughs at the 60 federal agencies with a presence in Maryland, the White House warned the state could lose $14.4 million in education grants, $3.1 million in environmental funding and $114 million for military base operations.

The administration estimates the cuts would put 200 education jobs in Maryland at risk, eliminate early education funding for 800 students, end child care grants for 400 families and leave about 2,050 children unable to get vaccinations.

Despite the warnings, there was little progress Monday on a last-minute agreement to break the political impasse on Capitol Hill. Lawmakers appeared increasingly resigned to the idea that the sequester will take effect and spent much of the day casting blame.

"I know that some people in Congress reflexively oppose any idea that I put forward, even if it's an idea that they once supported," President Barack Obama told the nation's governors, who are in Washington for an annual meeting.

But to reach compromise, the president said, "this town has to get past its obsession with focusing on the next election instead of the next generation."

But Republicans in Congress countered that it was Obama and the Democrats in control of the Senate who have stayed in campaign mode. Republicans have balked at Democratic insistence that additional revenues be included in any deal to end or delay sequestration.

"The president says we have to have another tax increase in order to avoid the sequester. Well, Mr. President, you got your tax increase," said House Speaker John Boehner, referring to last month's "fiscal cliff" deal that raised income tax rates on families earning more than $450,000.

"It's time to cut spending here in Washington," he said.

The rhetoric from both parties has left many employees at the Social Security Administration nervous about the potential for furloughs or layoffs.

Unlike the Department of Defense, the National Institutes of Health and other agencies, Social Security officials have provided little guidance to employees about how sequestration will affect them.

The agency employs more than 11,800 people in Maryland.

"Right now, we don't know what's going on," said Lael Savoy, a 21-year employee who asked about furloughs at a meeting on sequestration with Sen. Ben Cardin at the agency's headquarters on Monday. "I would say the mood is a little gloomy right now."

The Social Security Administration has wrestled for years to clear an extensive backlog of hearings for people who dispute denials for disability insurance and Supplemental Security Income. It has made some progress toward that goal.

At the end of 2010, there were 705,367 hearings pending. The average time to process a hearing had fallen from a peak of 532 days in 2008 to 390 days.

The agency had been on track to reduce the backlog to under 500,000 hearings, but its 2013 budget proposal revised that goal upward, according to the nonpartisan Congressional Research Service

In a recent letter to Sen. Barbara A. Mikulski, a Maryland Democrat, former Social Security commissioner Michael J. Astrue said sequestration could slow the time it takes to reach a decision in a case involving a hearing by a month.

Astrue, who stepped down last month at the end of a six-year term, wrote that customers calling the agency's hotline could be placed on hold for 10 minutes — or wait 30 minutes in an office — before connecting with an agency employee.

He said Social Security would cut roughly 5,000 positions through attrition, terminate more than 1,500 temporary employees and eliminate virtually all overtime under sequestration.

"We would try to prioritize our reductions to avoid furloughs that would further harm services and program integrity efforts; however, the possibility of furloughs remains uncertain at this time," he wrote.

The delivery of Social Security checks is not expected to be affected by the sequester. The agency pays out more than $800 billion in benefits annually — money that was exempted from sequestration. The processing of checks is largely automated.  

Most furloughs or other major cuts at federal agencies would not begin immediately on Friday — Obama acknowledged as much on Monday. If sequestration were replaced in a matter of weeks, most agencies, including Social Security, would be likely to avoid furloughs altogether.

And so while lawmakers are still battling publicly over this week's deadline, the attention has increasingly shifted to March 27, when the current stop-gap budget funding the government runs out of money.

Delaying action on the sequester would allow Democrats and Republicans to gauge the economic and political impact of sequestration and, possibly, replace the cuts along with a broader deal to fund the government for the rest of the year.

"I don't think you'll see the sky fall in on March the first — it's not a cliff," Cardin said. "But it won't take long for people to get pretty angry about it."

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