Budget Overview
The SSA is an independent agency of the U.S. federal government and is mainly responsible for administering social security services. As an independent agency, the funding of the SSA comes from the federal government; part of the federal tax dollar goes to social security, a federal program. The SSA serves millions of beneficiaries every month. The social security program is part of the Federal Government’s mandatory spending because authorizing legislation (“Social Security Act”) requires the SSA to pay the beneficiaries, which are mainly comprised of retirement, disability, and survivor benefits.
The budget appropriation subcommittee that projects SSA’s budget finances is the Congressional Budget Office (CBO). The CBO oversees the funding of the SSA (CBO, 2020). SSA’s operations fall under Function 650 (Social Security) classification of the federal budget. Function. Typically, Function 650 is mainly comprised of the social security program. According to the U.S. House of Representatives (n.d), Function 650 is the largest function in terms of dollars. It is also important to note that social security is entirely mandatory spending. CBO projects SSA’s finances under current law.
Delegate your assignment to our experts and they will do the rest.
With regard to budget authority and budget outlays, the federal government usually commits some money to the SSA. However, only part of this money goes to the agency from the federal treasury. The budget authority proposed for the financial year (FY) 2020 is $39.696 billion, while FY 2019 is $36.326 billion, indicating an increase in budget authority from 2019 to 2020 (SSA, 2020). The proposed outlay for FY 2020 is $39.694 billion, whereas that of FY 2019 is $36.326 billion (SSA, 2020). This indicates that all the money committed to the SSA by the CBO was outlaid.
Budget Assessment
The FY 2012 budget for the SSA was 12.522 billion in authority (SSA, 2011). The FY 2011 budget for the SSA was $12.379 billion (SSA, 2011). This was an increase of $143 million when compared to the FY 2011 figure. The FY 2012 budgetary figure encompasses both mandatory and discretional programs. While requesting the budget, the SSA placed a high priority on building on the tremendous progress it made in 2011. In particular, SSA’s budgetary request prioritized maintaining its FY 2010 staffing, funding its ongoing activities, and covering the agency’s inflationary increases (SSA, 2011). The budget request also placed a high priority on reducing SSA’s hearing and initial disability claims backlogs.
The FY 2012 discretional budget was $$11.4 billion ( Szymendera, 2012) . The budget was for the costs of administering SSA’s social security programs. In addition, this budget was to provide for SSA’s administrative responsibilities. The SSA’s administrative expenses are often referred to as the Limitation on Administrative Expenses (LAE) account. The President’s FY 2012 LAE account is 11.4 billion ( Szymendera, 2012) . This figure takes into account the 0.189 percent across-the-board recession. The SSA works with other agencies. As such, this budgetary allocation provides support to other agencies, which work with the SSA, such as Medicare and Medicaid, to administer their programs or services.
The mandatory budget for FY 2012 was 1.122 billion ( Szymendera, 2012) . This budget was mainly comprised of benefit payments for the SSA’s programs. The SSA administers a wide range of benefits. The mandatory budget for the FY 2012 was to provide funding to administer the Old Age and Survivors Insurance (OASI), Disability Insurance (DI), and Supplementation Security Income (SSI) program.
Politics play a significantly influential role when it comes to the primary accountability of program administrators. Although the SSA is an independent agency, its organizational processes are significantly influenced by politics, particularly the President and the Congress. The President and Congress influence the spending of the SSA. One area in which politics influenced SSA’s spending is in regard to discretional spending. The President and Congress have huge powers when it comes to increasing or decreasing SSA’s discretional spending. Politics influence LAE account appropriation, and political leader oversees how the SSA spends the funds set aside for LAE account.
In the SSA, politics also significantly impact the agency’s mandatory spending. In order to increase mandatory spending, the SSA is often forced to justify why there was a need for the addition of other social security programs. The program administrators ought to justify the need for additional security programs. Similarly, when intending to eliminate certain programs, the administration must give substantive reasons. Overall, politics influence several accountability areas required of SSA’s social security program administrators.
Analysis of Budgeting Plans and Actual Expenditures
The SSA’s budgetary plans are often influenced by a number of intergovernmental agencies. The SSA can make its budgetary appropriation, but the budgetary appropriations are subject to approval by the CBO. For example, in FY 2020, the SSA received a budgetary appropriating of $39.694 billion despite requesting a higher figure. Plans for additional programs and additional funding with the SSA are affected by congressional subcommittees on budgetary appropriations and are subject to approval. In order to receive the appropriation requested, the SSA has to justify and prove its plans and why the agency require the funding.
The sole responsibility of the CBO is to project the SSA’s budget. The CBO is also responsible for evaluation the quality of services provided by the SSA since the agency is federally funded. For this reason, the management of the SSA, align their budgetary decisions with President’s policies. This is because the president can change the agency’s budgetary appropriation. In fact, it is the president who proposes the SSA’s budget. Then, the CBO evaluates and allocates the appropriate fund. Besides, there has to be consultations between the SSA, Medicaid, Medicare and other agencies as these intergovernmental agencies play a significant role when it comes to budgetary decisions for current and future plans. Through consultation, the SSA and these agencies can factor in future plans for additional funding requests.
Implications of Foreign Policy
There are a number of factors that affects the SSA’s current and future budgets. Among them is international policymaking. Foreign policies can have a significant impact on SSA’s current and future budget. The SSA often source for funds from donors, both local and foreign donors. International policies that promote sourcing of foreign funds through donors can significantly boost SSA’s budget. This is because such policies help the SSA broaden its sources of revenue for funding the budget. As stated earlier, the SSA often request certain budget to fund its operations. However, the agency may not receive the amount requested. Donations from foreign countries and other donors help compensate for this budget deficit.
However, it is important to note that there are some foreign policies that hinder organizations from sourcing for revenue from foreign donors. According Brown (2016), some international policies regulate foreign aid. In such a case, the SSA may be forced to cut down its budget. This can have a significant implication to the agency, especially when it comes to service delivery. In particular, it may hinder the agency’s ability to deliver quality services. Policies that hinder an organization from acquiring foreign aid definitely compel the organization to reduce its budget in the future. This, in turn, may cause deterioration in service delivery. Thus, foreign policies can have far reaching implications on the SSA’s current and future budgeting.
Budget Request and Recommendations
Having outlined the implications of international policymaking on the SSA’s current and future budgets, it is vital to discuss the ways in which the agency can improve the budget for the next FY. There are a wide range of robust strategies that the SSA ought to consider to improve its budget. First, the agency should ensure that its budget is actionable. In other words, goals set by the agency ought to be achievable. Budgets are just projects, and thus are rarely accurate. When creating its budget for the next fiscal year, the agency should ensure that there are enough funds to finance it. To achieve, the SSA should source for funds from additional sources. The SSA should seek donations from different donors. According to Brown (2016), charitable donations are considered one of the largest sources of revenue. Thus, the SSA should expand its sources of donations.
Secondly, the SSA should ensure that its budget has well-defined set of activities. Simply put, the SSA should create a budget that clearly outlines the money allocates for each of its social security programs. This way, the agency will not experience cost overruns when administering its social security programs. This will, turn, help the agency deliver quality services.
References
Brown, A. C. The Funding of Independent Regulatory Agencies. [Online]. Retrieved March 14, 2021, from Citeseerx, https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.696.7010&rep=rep1&type=pdf
CBO. (2020). CBO’s 2020 long-term projections for social security: additional information. [Online]. Retrieved March 14, 2021, from CBO, https://www.cbo.gov/publication/56907
SSA. (2011). Social Security Administration fiscal year 2012 budget overview. [Online]. Retrieved March 14, 2021, from the SSA, https://www.ssa.gov/budget/hist/FY2012/2012BudgetOverview.pdf
SSA. (2020). Social Security Administration Budget. [Online]. Retrieved March 14, 2021, from the SSA, https://www.ssa.gov/budget/FY20Files/2020BO_1.pdf
Szymendera, S. (2012). Social Security Administration (SSA): Budget Issues . Congressional Research Service.
Appendix
Appendix A: Interviews
Interview Questions:
What is the SSA’s main source of revenue? How does the agency carry out its budgeting? Does the agency face any challenge in this regard?
The SSA is an independent agency of the U.S. federal government and is mainly responsible for administering social security services. As an independent agency, the funding of the SSA comes from the federal government. The budget appropriation subcommittee that projects SSA’s budget finances is the Congressional Budget Office (CBO). We face numerous challenges when carrying out our budgeting, such as delayed funding and budget cuts.
What are some of the political influences that your program administrators face when it comes to the budget creation process?
The President and Congress influence the spending of the SSA. Political leaders influence both the SSA’s discretional and mandatory spending. The President and Congress have huge powers when it comes to increasing or decreasing SSA’s these funding.
How do intergovernmental agencies contribute and/or influence your agency’s current and future budgetary decisions?
The SSA can make its budgetary appropriation, but the budgetary appropriations are subject to approval by the CBO. Besides, there has to be consultations between the SSA, Medicaid, Medicare and other agencies as these intergovernmental agencies play a significant role when it comes to budgetary decisions for current and future plans
Do you think foreign policies have any effect on your budget process?
Yes. International policies that promote sourcing of foreign funds through donors can significantly boost SSA’s budget. Some international policies regulate foreign aid. In such a case, the SSA may be forced to cut down its budget
What strategies do you think will improve your agency’s budgeting plans?
First, the SSA should ensure that its budget is actionable. Secondly, the agency should ensure that its budget has well-defined set of activities.
