Social Security reform plans include some privatization, staggered checks

April 10, 1995|By John B. O'Donnell | John B. O'Donnell,Washington Bureau of The Sun

WASHINGTON -- The Clinton administration, trying to shrink the Social Security Administration and improve its service to the public, plans to turn some of the agency's work over to private businesses and to spread the mailing of checks throughout the month rather than delivering all of them on the same day.

In a series of steps to be announced soon, perhaps as early as this week, the administration will also take the first steps toward delivering all Social Security retirement and disability benefits electronically instead of by mailing checks. Currently, 43 million people receive more than $300 billion a year in benefits.

The proposals, finalized last week by the White House, will not affect the 6.3 million people who receive $25 billion annually from the Supplemental Security Income (SSI) program for the blind, aged and disabled, said an agency official who confirmed the outlines of the plan.

The plan also calls for eliminating half the agency's 10 regional headquarters, said the official, who refused to be identified.

The moves would save $500 million to $1 billion over five years and reduce the work force of 65,000 by as much as 1,000 workers, said the official. The agency is under orders from the administration to cut 4,500 workers by 1999, part of the effort to reduce the federal work force by 272,000.

The plan takes the first step toward privatizing some operations of the agency, which has its headquarters in Woodlawn. It calls for large private employers to send the Social Security retirement applications of their workers directly to the agency's computer system.

Currently, retiring workers must visit one of 1,300 field offices to apply for retirement checks.

The plan also takes the first steps toward replacing the mailing of paper checks with electronic transfer of benefits. Initially, current recipients with bank accounts could volunteer for direct deposit of their checks. Eventually, they would have no choice.

Recipients without bank accounts would receive their funds in the same way that welfare and food stamp benefits are delivered electronically in same states, by using cards similar to automatic teller machine cards.

Currently, all 43 million retirement and disability checks are delivered on the third day of each month, creating a huge surge in work as the agency is inundated with complaints and queries about erroneous and missing checks. Spreading the payments throughout the month is expected to smooth out that work.

Initially, the new payment dates would be imposed only on new enrollees, while current recipients could volunteer for the change.

"All these proposals should help us deliver better public service with savings to the taxpayer," said Phil Gambino, the agency's spokesman.

The proposals adopted by the White House are among a series of steps that the agency has been considering for some time as it faces a growing workload and a shrinking work force.

It is struggling to handle some 3 million applications each year for SSI and Social Security disability payments. Half its $5 billion administrative budget is devoted to processing those applications.

The agency is considering a number of steps to turn the filing of disability and retirement applications over to private firms that would send them directly to the agency's computer system.

H&R Block, the tax preparation firm, has expressed interest in handling this work.

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