If America’s 76 million baby boomers want a fright, they
should take a look at two reports issued in February by the
nonpartisan Social Security Advisory Board. The board
monitors trends at the Social Security Administration, the
nation’s biggest-spending agency. The reports could give
horror novelist Stephen King a run for his money. Only these
The reports show a near-crumbling agency. The
problem isn’t the Social Security trust fund—it’s
growing every day. It may meet disaster, in 30
years or so, when baby boomers exhaust the
budget surplus. But the Social Security
Administration will meet an earlier doom, aging
much faster than its clientele.
Tracks of the coming crisis are apparent. The
agency has never been under greater pressure to
perform. Beneficiaries grew 10 million in the past
decade—to nearly 52 million—and, according to
agency projections, will grow 10 million more by
2010; by 2005, the toll-free agency number will
get 76 million calls a year, two-thirds needing a
However, much of the Social Security
Administration’s work force is retiring. Like the
rest of the federal government, the agency expects half of its workers to retire
over the next decade. The majority of exiting employees are claims
representatives who process benefits for new retirees. Coupled with an additional
10,000 exits, due to ordinary attrition in high-stress positions, the agency will
need to replace three of every five employees to remain at current strength.
Recent downsizing makes the agency’s job even more difficult.
Between 1985 and 2000, it cut more than 15,000 jobs, even as
it made every effort to meet the lofty service standards. It
mostly succeeded, even setting up one of the nation’s premier toll-free telephone
Unfortunately, the agency cannot maintain this level of
service much longer. Consider these warning signs
highlighted by the Social Security Advisory Board:
Despite the agency’s excellent toll-free phone
services, one-third of callers received a busy signal or
hung up in exasperation after long waits.
Social Security field offices are becoming more
crowded every day, and waiting times appear to be rising.
As workload rises, the quality of claims decisions appears to be declining.
These problems are worsened by the effects of the Clinton administration’s
downsizing. Employment caps prevented the agency from growing. The Social
Security Administration reacted as any caring agency would: It stopped filling
vacancies at the bottom and reclassified supervisors into non-supervisory jobs.
Subsequently, the hierarchy changed shape. The classic bureaucratic pyramid
with more employees at the bottom morphed into a “federal pentagon” with more
If the agency is to go from potential horror story to fairy tale, it must act quickly
on three fronts. First, it must change shape, putting the lion’s share of staffing
resources at the bottom. Instead of filling each new middle- or senior-level
vacancy, the new agency heads should split these jobs into two or more
front-line jobs. The Bush administration could speed this effort by allowing SSA
to manage based on payroll, not head count.
Second, the agency must learn how to compete for talent in the current labor
market. One of the byproducts of the decade-long drought in hiring is that, like
many federal agencies, it has forgotten how to recruit. It won’t attract talent
merely by offering higher entry-level pay. It must make its case for talent based
on its critically important mission honoring the nation’s pact with its people.
Most importantly, the Social Security Administration and other federal agencies
must make Congress and the Bush administration understand the desperate
need for civil service reform. Like the federal government as a whole, the Social
Security Administration is cursed with a civil service system mired in the past—best suited to a work force using Model Ts, not on HTML.
Luckily, the agency has 76 million baby boomers on its side. To paraphrase the
old commercial, Congress can fix its human capital crisis now or pay the price
at the voting booth later. Older Americans vote in big numbers, and they love to
take revenge against any politician who threatens their Social Security, whether
the threat happens to come from financial crisis or just plain bad service.