WASHINGTON -- With the fate of its leader uncertain, the Social Security Administration officially becomes an "independent" agency today, reporting directly to the White House.
The change, to be marked at an afternoon ceremony at the agency's Woodlawn headquarters, removes half its personnel and more than half its budget from the Department of Health and Human Services.
It also fulfills a long-held goal of many members of Congress who maintain that successive administrations have deprived Social Security of money and personnel and believe that the agency should have a higher profile to increase public confidence in the agency. But Social Security recipients are not expected to notice any changes.
Employing 65,000 people, including some 14,000 in the Baltimore area, Social Security touches the lives of most Americans. It issues 50 million retirement and disability checks each month and collects payroll taxes from 135 million workers. Its budget of $371 billion is the largest in the federal government.
A New Deal creation of President Franklin D. Roosevelt, the agency has been part of the Health and Human Services Department and its predecessor agencies since 1939. It began making lump-sum payments to retirees in 1939 and a year later began issuing monthly checks.
The first one went to Ida May Fuller, who had paid about $22 into the system. She collected more than $20,000 in payments over the next 35 years before dying in 1975 at the age of 100.
The degree of independence that the agency will be able to exercise is unclear.
"How it will work out, we will have to see," said Robert M. Ball, who headed the agency from 1962 until 1973.
A level of bureaucratic clearance for important policy and personnel decisions will be removed, he said, and "the commissioner has somewhat more strength."
But he added: "People shouldn't think that this is some kind of agency floating out there by itself. . . . It's not free of control, nor should it be."
Although Donna E. Shalala, the secretary of health and human services, had opposed independence -- at one point testifying that separation would "run counter to the public's demand for a leaner, more efficient and more cost-effective government" -- President Clinton endorsed the idea in April, ensuring enactment.
The president's endorsement came at a time when he needed help from Sen. Daniel Patrick Moynihan, then chairman of the Finance Committee, on his health care legislation. The New York Democrat was the driving force in the Senate for making the agency independent.
Under the law adopted in August, the commissioner will have a fixed six-year term and may be removed only for "neglect of duty or malfeasance in office." Until now, the commissioner could be removed at any time by the president.
The law also requires the president to send two budgets for the agency to Capitol Hill each year -- his budget and the agency's initial spending request -- so that Congress can see what agency officials believe they need to do their job adequately.
Whether Commissioner Shirley S. Chater will keep her job remains in doubt. Nominated to a term that would end Jan. 19, 2001, she angered Senate Finance Committee Chairman Bob Packwood at her confirmation hearing six weeks ago, and he has bottled up the nomination since then.
Ms. Chater turned down the Oregon Republican's request to propose a solution to one of the most difficult political problems facing Congress: how to make the Social Security retirement fund remain solvent well into the next century.
The post-World War II baby boom generation will begin retiring in 2008. The agency is expected to begin taking in less money than it pays out in benefits five years later and to become a heavy drain on the federal budget. A combination of benefit reductions and tax increases, along with an increase in the retirement age from 65, is considered likely at some point.
Harshly criticizing Ms. Chater for failing to offer any solutions, Mr. Packwood said that he would hold up the nomination until he got some answers from her. He followed that up with a letter restating many of his questions.
Ms. Chater responded on Tuesday, again refusing to suggest any remedy.
She argued that specific recommendations should not be made until an advisory commission now considering the problem completes its work and Americans are convinced that change is needed.
Eric Bolton, an aide, said that Mr. Packwood had not completed his review of Ms. Chater's letter and that "it would be premature for him to comment."
Senate Majority Leader Bob Dole of Kansas suggested yesterday that Ms. Chater isn't the one who should prescribe a solution.
"That may be over her pay grade," said Mr. Dole, who supports her nomination.
Ms. Chater "is confident she will be confirmed," said Phil Gambino.
Independence comes at a critical time for Social Security. Beset by a rising tide of disability applications that has reached 3 million a year, the agency is under orders from the Clinton administration to cut its work force by 4,500 by 1999 as part of an effort to cut 272,000 workers from the federal payroll.
Trying to cope with the disability onslaught, which now consumes half its $5 billion administrative budget, Social Security is automating and streamlining the way it handles claims for disability payments.