Acting Social Security Chief Calls for Funding Boost

 
 

What You Need to Know

  • President Joe Biden has called for $14.8 billion in Social Security Administration funding in fiscal 2023.

  • Acting Social Security Commissioner Kijakazi says that level of funding would help her agency cut backlogs and continue key IT modernization work.

  • The stakes are high, as Social Security represents a critical source of retirement income for all Americans, especially those in historically marginalized minority groups.

On Wednesday, Acting Social Security Commissioner Kilolo Kijakazi offered the opening remarks at a retirement equity forum held by the Schwartz Center for Economic Policy Analysis and the Economic Policy Institute.

The purpose of the policy event, which was moderated by the New School’s Teresa Ghilarducci, was to spotlight the challenges facing Black and Hispanic workers in preparing for retirement compared to their white counterparts, and to call on lawmakers to take concerted action to address the gap.

According to Kijakazi and the other speakers, the Social Security program plays a major role in providing retirement security to all Americans, but the program is especially critical for African Americans and Hispanic Americans. As such, Kijakazi said, it is of paramount importance for the ongoing pursuit of racial equality in the United States that the Social Security program be put on a healthy financial footing for the long term.

As Kijakazi emphasized, it is important for Congress to take steps to adequately fund both the Social Security program’s benefit funds and also the Social Security Administration itself.

Kijakazi says her focus is now squarely on advocating that Congress pass President Joe Biden’s proposed fiscal 2023 budget, which would direct about $14.8 billion to the Social Security Administration, an increase from the agency’s $13.3 billion budget for fiscal 2022.

According to Kijakazi, the SSA is currently operating with one of its lowest levels of staffing on record, and the SSA’s staff are grappling with significant backlogs and challenges, especially when it comes to the review and approval of Social Security disability claims.

“Social Security is the bedrock of many Americans’ retirement security,” Kijakazi said. “It is one of our country’s most popular and most successful social insurance programs, and it is also one of the most progressive. We must act soon to ensure the program lasts for generations to come.”

During her remarks, Kijakazi emphasized the fact that African Americans and Hispanic Americans continue to face discrimination in hiring and promotions. As such, these demographic groups have lower incomes on average and higher debt burdens, even when accounting for education levels.

“It is a sad fact that this discrimination in hiring and pay practices is one of the core reasons why Social Security is so important to these populations,” Kijakazi explained. “As a progressive benefit program, Social Security replaces more income in retirement for those who are lower on the income scale.”

Kijakazi pointed out that African Americans and Hispanic Americans also are over-represented in industries and sectors that tend to offer less generous private retirement savings opportunities in the form of 401(k)-type defined contribution plans. They also have less access to affordable health care plans and other forms of insurance commonly provided to white Americans in the corporate workplace.

The pending 8.7% 2023 Social Security cost-of-living adjustment is welcome news for all Social Security beneficiaries, Kijakazi said, but the more generous benefits also intensify the outstanding questions about the long-term solvency of the program. If no action is taken, she warned, benefits would need to be cut meaningfully in the 2034 to 2035 timeframe.

Throughout her speech, Kijakazi repeatedly called on lawmakers to take action to improve Social Security’s financial footing and to grant the SSA’s request for additional funds to hire more staff. To back her calls for greater support, she pointed to the agency’s research and outreach work to address race- and gender-based retirement disparities.

According to Kijakazi, a hiring freeze implemented during the COVID-19 pandemic meant the SSA was operating during most of 2021 and 2022 with the lowest staff level seen in more than 20 years. The burden has eased in recent months, however, as the SSA received a special infusion of more than $100 million as part of the federal budget negotiations that put in place a continuing resolution to fund the federal government through the end of this year.

“As the acting head of the SSA, I can assure you that we absolutely want and need the full request of $14.8 billion for FY2023,” Kijakazi said. “That level of funding would allow us to fully restore our staffing to the level needed to start dramatically cutting down our backlogs and to keep our IT modernization work on track. The funding is essential for the essential work we do for the public.”