President Obama recently submitted his 2013 budget proposal to Congress, and his suggestions – or lack thereof – are drawing comments from Republicans and Democrats. His budget for the next year does not address the long-term solvency of Social Security, which is the biggest problem facing Social Security and which the payroll tax cuts we discussed on Monday make worse. Of course, what the lack of a plan means depends on to whom you talk.
Democrats say it would be futile to argue about long-term Social Security plans during an election year, since Republicans would be more focused on winning elections than seriously negotiating. Republican presidential nominee front-runner Mitt Romney, on the other hand, criticized President Obama for not discussing how he would make Social Security solvent.
One budget item that may help Social Security and current and future beneficiaries is that President Obama earmarked $1 billion towards ensuring that Social Security benefits go to the correct person. That might sound like a lot, but this is a huge problem that the Social Security Administration (“SSA”) has – it pays out in the neighborhood of $10 billion in incorrect benefits each year. The money goes to people who were once disabled but no longer are and to people with false names and Social Security numbers. The SSA also incorrectly lists about 14,000 Americans as dead each year even though they are still in fact living. The $1 billion can help clean up waste in the SSA that could free up a lot of money in subsequent years for disabled workers, retirees and their families.
Are you a Social Security beneficiary? Do you have any recommendations as to what part of the application process the Social Security Administration could improve?
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