As states look to close budget deficits, they're furloughing thousands of employees they don't pay for: Social Security Administration employees.
About 14,000 SSA employees working across the country are considered state employees: They are enrolled in state benefits and pension programs, and the Social Security Administration reimburses the states the full cost of the employees' state-level salaries and benefits, usually lower than federal salaries and benefits.
About 2,700 of them are nonetheless being furloughed as seven states try to cut costs.
The state furloughs are "disappointingly cynical," SSA Commissioner Michael Astrue said in an interview with Federal Times. "They understand they're not saving any money and that it's actually anti-stimulus because it's taking money away from state's citizens."
The SSA-funded employees evaluate medical records and disability claims of Americans applying for disability benefits to determine if they qualify. They are known as DDS employees; DDS stands for disability determination services.
The seven states furloughing these employees are California, Connecticut, Maryland, Massachusetts, New Jersey, Ohio and Oregon. Other states have furloughed state employees but exempted DDS employees.
In fiscal 2008, SSA spent $1.8 billion on 14,000 DDS employees in the 50 states, District of Columbia and Puerto Rico. Those employees processed about 3.6 million disability claims, and SSA plans to spend $2 billion on the program this year.
It's illogical for states to furlough employees who ensure citizens get disability checks to spend and stimulate the local economy, said Richard Warsinskey, immediate past president, National Council of Social Security Management Associations.
"This is purely federal money. There's not anything to be gained by the states because they're just going to lose the money," he said.
Some states, such as Massachusetts, are furloughing DDS managers three days through June 2009. Others are more drastic. California is furloughing all DDS staff two days per month from February 2009 through June 2010. All DDS employees who are furloughed by their states will not be paid by SSA.
The Social Security Administration's inspector general said in a new report that the furloughs could have a staggering impact on processing claims.
The furloughs will cost California's DDS offices 10 percent of its processing capacity, delaying about 2,375 disability cases per month. The report says that disability claimants will be delayed in receiving about $648,000 in benefits.
"The outcome varies from state to state, but generally furloughs could reduce the number of disability determinations the state DDS offices will make in fiscal 2009, including the number of claims allowed and benefits paid," said Wade Walters, acting assistant IG for external relations.
In February, SSA had a backlog of more than 765,527 cases with an average wait time of 488 days. The agency is on track to eliminate the backlog by 2013, but if the furloughs persist or spread to other states, that could change.
Astrue said states he's talked to clearly understand the ramifications of furloughing DDS employees, but they decided not to exempt them out of a sense of fairness to other state employees — a "triumph of spin over compassion," Astrue said.
Georgina Huskey, president of the National Association of Disability Examiners, said the furloughs have hurt staff morale. A California DDS employee, she said groups tried to no avail to convince Gov. Arnold Schwarzenegger that DDS employees should be exempt. "Because we're federally funded, we were hoping until the very last minute that the furloughs for DDS employees would not happen," she said.
State legislators have been sympathetic, Huskey said, but she sees no end to the furloughs in California. She said the governor's office made clear during furlough talks there would be no exceptions.
Astrue said he's made progress convincing some states to exempt DDS employees, but it's an issue SSA may be tackling for the rest of the year, comparing it to the arcade game Whac-a-mole.
"We think we have a contained situation and we make progress, and just when you think you're done, two or three more pop up," he said.