Social Security Struggles to Improve Customer Service

That pot shrunk by 17 percent from 2010 to 2023, accounting for inflation, while the number of Social Security beneficiaries grew by 22 percent, according to the Center on Budget and Policy Priorities, a nonpartisan Washington, D.C., think tank.

For the 2023 fiscal year, Congress boosted the agency’s budget by about 6 percent, to $14.1 billion, but the SSA said the additional dollars mostly went to fixed increases in costs for wages, office rents and other operational expenses. Still, the agency was able to begin digging out from pandemic-era staffing lows, O’Malley said, adding about 3,000 workers and laying the groundwork to improve services. 

But that modest progress was interrupted as lawmakers struggled this year to reach a budget deal, keeping the government running with a series of last-minute, short-term spending bills but “paralyzing agencies like SSA who need to hire staff and make long-term investments for the future,” AARP’s Sweeney said.

The fiscal uncertainty “set the agency back substantially,” says Jack Smalligan, a senior policy fellow in the Income and Benefits Policy Center at the Urban Institute. “As the hiring freeze continued and turnover occurred and staffing shrunk, performance eroded. We’ve lost an awful lot of the gains that SSA achieved in 2023.”

8.5 percent budget increase proposed

When Congress finally adopted a 2024 budget in late March, it included $14.2 billion for SSA operations, a $100 million (0.7 percent) increase. “It’s a little bit of help, and we need help,” O’Malley told the House panel. “It’s a lot better than a cut, and I know cuts were on the table.”

O’Malley said the SSA would use those funds for “immediate targeted hiring,” focusing on the teleservice centers that handle calls to the agency’s 800 number (and currently have a 24 percent staff attrition rate, he said) and the severely understaffed state-level offices that process applications for disability benefits.

President Joe Biden’s fiscal 2025 budget proposal includes a $15.4 billion operating budget for the SSA, an 8.5 percent increase that O’Malley called critical to helping the agency realize customer service goals, such as reducing phone hold times to 12 minutes on average and processing 185,000 more disability claims than it will process this year.

“We think that would start righting the ship,” says Sherry Jackson, second vice president of the American Federation of Government Employees Council 220, the union representing about 26,500 SSA field offices and teleservice workers.  

“We also feel strongly that those funds need to be earmarked specifically for staffing and training,” and for updating aging information technology, she says. “The employees want to do the work, but we need the tools necessary to do it.”

About $1.7 billion, or 11 percent of the SSA’s 2025 budget request, would go toward IT modernization, O’Malley said, noting that the agency currently spends most of its IT budget on “maintaining old legacy systems.”

Even if approved in full, the proposed spending boost would just be a start, says Smalligan, who worked at the federal Office of Management and Budget for nearly 30 years before joining the Urban Institute.

“If Congress was able to sustain that size of increase over a number of years, that would, over time, enable SSA to work down these backlogs,” he says. “It really only ultimately makes a difference if the support can be sustained.”

Seeking ‘quick wins’

Since taking office at Social Security in December, O’Malley has said his immediate focus would be on customer services issues, particularly the disability delays, the “dysfunctional” phone system and the SSA’s heavy-handed tactics for recouping past overpayments to Social Security recipients.

Last month, the SSA stopped withholding entire Social Security payments from people who do not respond to an overpayment notice and began capping such “clawbacks” at 10 percent of benefits. The agency is also aiming to tackle a major cause of payment errors — inaccurate data on work income for people receiving Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), the two SSA-administered benefits for people with disabilities — by implementing a long-planned electronic information exchange with payroll data providers.

In his House testimony, O’Malley outlined other steps aimed at securing “quick wins” on customer service, including an open call for employee suggestions on improving services that has drawn nearly 3,000 submissions and the increased on-site presence of top agency staff at the SSA’s Baltimore headquarters and major regional offices.

“It could be that if Commissioner O’Malley can deliver some solid improvements over the coming months, appropriators on both sides of the aisle would be more willing to authorize the substantial increase in administrative funding that SSA has already requested for fiscal year 2025,” says Emerson Sprick, associate director of the Bipartisan Policy Center’s Economic Policy Program.

“We are glad to see Commissioner O’Malley prioritizing such improvements in hearings before Congress,” says Chad Mullen, AARP government affairs director for financial security. “Now Congress must act to equip SSA with the resources it needs.”