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The Sequester and Social Security


The Balanced Budget and Emergency Deficit Control Act (BBEDCA), also known popularly as the sequester, will not affect the payment of ongoing Social Security or SSI benefits, or affect Medicare or Medi-Cal. Those programs are specifically exempt from cuts under Section 255 of the Act.


However, there may be substantial administrative funding cuts at SSA that are likely to affect claimants.


In July 2012, Senator Harkin (Senate Appropriations Subcommittee) published a report estimating that the sequester would cause SSA to institute up to 6 weeks of furlough days for its entire workforce (including DDS). It estimated a delay in processing new claims to 180 days on average (as opposed to the current 111 day average claim determination period). It also estimated that the backlog of pending claims would double, to 1.5 million, by the end of FY 2013.


Outgoing SSA Commissioner Astrue sent a letter to Senator Mikulski (Chair, Appropriations Committee) on February 7, 2013, estimating that the sequester would cause delays of two weeks for a decision on initial claims, and an additional month for receiving hearing decisions. (Some informal reports have indicated that SSA may have begun cost-cutting and saving during the past year, so that the sequester wouldn’t hit it so hard.)


And, while payments to current beneficiaries will not be affected by the sequester, many of the plans floating around for a possible resolution of the sequester issue include potential changes in Social Security, Medicare, and other benefits, such as raising the income cap for FICA, means-testing Medicare, raising the eligibility age for Medicare, and the like.


The sequester officially took effect March 1, 2013, although staffing changes (i.e., furloughs) are not likely for at least a month after that, due to advance-notice requirements for members of government employee unions. And, there is the possibility that a political solution will be found that will ease any cuts in services.