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Social Security Cut Of $750 Million Could End Up Costing $6 Billion

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Rep. Denny Rehberg's subcommittee wrote a budget that cuts Social Security integrity operations by $752 million.
Rep. Denny Rehberg's subcommittee wrote a budget that cuts Social Security integrity operations by $752 million.

WASHINGTON -- A Republican push to cut Social Security integrity efforts by $750 million could end up costing $6 billion in increased waste and fraud, according to the independent official who monitors the program.

The House Republican budget appropriation for Social Security proposes to spend $272 million on "program integrity" -- a huge cut from the more than $1.024 billion that Congress agreed last year to spend combating waste in Social Security disability.

That was part of the Budget Control Act, and at the time Republicans touted the $12 billion in savings that the beefed up integrity effort was expected to produce over 10 years.

But the new appropriation guts that initiative.

"With this reduction in funding for 2013 of about $752 million, assuming that the funding levels assumed in all other years in our baseline estimates are unaffected, we would expect program benefit/payments to be between $5 billion and $6 billion more," Social Security Chief Actuary Stephen Goss estimated in a letter to Rep. Xavier Becerra (D-Calif.) Thursday.

The funding goes toward what are called Social Security income redeterminations and continuing disability reviews. Redeterminations ensure no one is overpaid, while the latter makes sure someone is medically eligible for disability payments.

Becerra hammered Republicans for the planned cuts in a statement.

“First they voted to end Medicare. Now they have proposed slashing almost $800 million from Social Security’s operating budget,” said Becerra, the top Democrat on the House Ways and Means Committee's Social Security panel. “What’s worse, the bulk of this reckless cut would shortchange Social Security’s ability to fight waste, fraud and abuse. In the end, as much as $6 billion of the taxpayers’ money could be lost. Social Security’s money should be going towards the benefits of those who have earned it.”

The proposed cut is particularly ironic because a growing chorus of Republicans have alleged that the disability system is increasingly bloated by fraudulent claimants. Disability rolls have indeed swelled with the aging of the Baby Boom and an economy that makes it harder for the disabled to find work.

But the increased integrity efforts were supposed to help trim costs. According to the actuary, each dollar spent on disability reviews saves $6, and each $1 spent on SSI redeterminations saves $9.

“No business in America would cut an investment that produces between $6 and $9 in savings for every one dollar spent, but that’s the very plan Congressional Republicans have put forward,” said Rep. Lloyd Doggett (D-Texas), the top Democrat on the House Ways and Means Committee's human resources panel. “They follow their extreme ideology even when it is clearly contradicted by common sense.”

A spokesman for Rep. Denny Rehberg (R-Mont.), the chairman of the House Appropriations subcommittee that produced the Social Security budget, did not immediately answer a request for comment.

Michael McAuliff covers Congress and politics for The Huffington Post. Talk to him on Facebook.

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